The Holy Grail of IT: generating return on sunk investment

The needs of businesses across the globe have resulted in a much greater focus on return on investment (ROI) and the benefits that technology can deliver. The disillusionment with IT for IT`s sake was most significantly marked by the publication of "Does IT Matter?" by Nicholas Carr, author of the infamous Harvard Business Review article of 2003 which examined the evolution of IT.

An even more onerous task, that of deriving ROSI or return on sunk investment from assets, is now being put upon those involved in IT too. Businesses want to use existing information and applications to build and develop new systems that will address new business initiatives and enable the organisation to grow, without ripping out the technology already in place.

So, despite the new rise in IT spending, ROI and ROSI, whether through cost savings or productivity increases, will continue to be the benchmark that sets technology vendors apart. This means that organisations need to ensure the systems they implement can demonstrate and provide clear business advantages that take into consideration previous investments.

It sounds obvious, but one of the key ways for organisations to achieve ROSI is to work with companies and technologies that focus on maximising the technology that exists in the business: technology that has already been implemented and is running at the heart of the organisation.

Typically, a business will already have a number of disparate and incumbent databases and information sources in place - for example an ERP system, a CRM solution, and an HR and payroll function. However, the problem is that they are disparate - the data and information contained within them is not integrated and can`t be used to generate knowledge about the organisation as a whole.

This is where integration technologies fit in. They can help businesses unify and integrate back-end data stores to turn disparate data into knowledge. They enable businesses to synch up and harmonise their sunk investments in IT systems to make the information on all of them more accessible and meaningful to the relevant people, without the need for "rip and replace", which can be very costly and risky, and unpopular with shareholders and the board.

The integration approach also has some serious risk management advantages that should be taken into consideration when thinking about how it can provide ROSI. The incumbent databases will generally be in place for good reason - they will have been an integral part of the enterprise for a number of years, and developers will be well versed on how they function and the benefits they can bring. The databases, having been tested over a number of years, will be reliable. This means that by integrating rather than removing them, customer data will be retained in the organisation and customer satisfaction levels maintained at all times. In the worst case scenario, when something goes wrong, the teams would at least be able to address the issue in a timely and effective manner thanks to their long-standing experience of working with the existing systems - something they would not immediately be able to do with a new implementation.

In short, implementing overlaying integration technologies means that businesses can be in line with the reality of the IT systems and strategies that are already in place. Providing a virtual view over all databases and enabling decision-makers to access the information they need without having to rip out their previous IT investments clearly represents a compelling argument for anyone looking at maximising and improving their business processes and generating a return on their existing investments.

From an organisational perspective, implementing integration technology makes information available in a way it wasn`t before, and to a greater number of people. In addition, greater automation can take place with regard to more efficient workflow between the disparate systems. Clearly, the benefits are huge - it can bring operational efficiency and economies of scale, render the entire business process more transparent, and issues can be addressed in near-time by the incorporation of business activity monitoring.

However, such developments do engender cultural change, as different departments and business silos are brought together to work in different and more integrated ways. Having a change management programme in place can help ensure that transition is smooth and that the business benefits and returns are derived from day one.

This softer issue also entails one other business-critical area that must not be omitted when implementing integration technologies - access and security. It is imperative to ensure that the overlying software pulling the data together has the capability to dictate who can do what with it, where and when. When implementing a portal-type application that makes information available, clearly the business needs to ensure, for example, that the HR and finance director can access information on salaries, and that sales teams can`t - but that everyone can access members of the sales team`s biographies. A highly resilient, in-built security component needs to be factored into the solution.

Which brings us to the question of which integration technology to implement and who to work with when doing this. There are some key points to bear in mind. Very simply put, the purpose of integration technologies is to reduce business complexity. However, in the process of doing this, some solutions can in fact add their own layers of complexity, so selecting solutions from the myriad options available can be difficult.

It is therefore important to study the benefits and complexities of rival solutions versus what the organisation wants and needs, rather than being won over by the lure of certain brands or technologies, in order to ensure success and ultimately provide both return on investment and return on existing assets.

Whatever the technology route taken or partner chosen, it is imperative that both parties understand the company`s strategic goals and the business processes that the integration effort is trying to get to grips with in order to achieve the returns that the project is hoping to generate.