Business managers who endured the widespread technology upgrades in the late 1990s and early 2000s are once again examining the cost versus return ratio as their cornerstone technologies and applications reach the end of their productive and maintenance lifecycles.
Marlon Reddy, managing executive of Business Connexion`s SAP Competency, which specialises in the design, implementation and support of the SAP enterprise resource planning (ERP) system, notes that with appropriate commitment from senior management and an investment over a five-year roadmap, businesses are in a position to access real returns on investment within a considerably shorter time frame.
"The explosion of purchases around Y2K was seen by many business managers as forced investments that provided very little in the way of return to the company. This subsequently contributed to a significant slowing of IT spend. Although many businesses are feeling mounting pressure to upgrade their core technologies in the next few years, few will commit without a clear business case demonstrating measurable returns within acceptable time frames," he says.
In order to ensure that maximum returns are realised from technology and application investments, Reddy contends that a long-term roadmap should be developed. He explains that the purpose of this roadmap is to plan investments to meet the immediate requirements of the business, while also providing a view forward to address likely future needs.
"Such a strategy should also deliver a perceptible improvement in the short-term by being geared to solve immediate problems," he says - adding that any core technology investments must have longevity, scalability and the ability to integrate effectively with the wide range of applications typically applied within an enterprise.
"Advances in technology and best practices such as enterprise service-oriented architecture (ESOA) have paved the way for companies to gain long-term value from their technology investments instead of simple process enablement. In the past, companies were often obliged to use a single vendor for optimal cross-application integration. However, organisations have access to a range of platforms which support applications from a broad spectrum of vendors to suit the specific needs of their environment," he says.
Despite the long-term focus of the roadmap, Reddy explains that, with commitment from senior management, appropriate planning can deliver quick returns and increased business flexibility as enhanced integration and business process improvement is achieved.
He stresses that integration plays a key role in value creation - but notes that this has historically been one of the most complex challenges for both IT and business management. "For the IT department, managing and maintaining the integration process is time- and resource-intensive. Meanwhile, business managers are demanding closer interaction among different divisions or departments to improve productivity, efficiency, decision-making ability and business flexibility," he explains.
With the availability of technologies such as SAP`s NetWeaver and ESOA, the potential for integrating data across multiple applications has advanced considerably. Reddy believes that achieving this integration is a key factor in helping companies to achieve short-term successes within their long-term plans.
"Using Netweaver and ESOA, companies can obtain full integration of data and applications, allowing for a holistic or specified view of the organisation without intensive management and maintenance. Secondly, it enables companies to truly leverage technology investments by optimising the computing power requirements of end-user interfaces and devices, thereby extending the lifecycle of such devices and ultimately extending the end-user base. This opens the way for quicker and more cost-effective technology utilisation and deployments in pain areas, with considerably faster return on investment," Reddy concludes.
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