Getting The Most From Technology
In a Down Economy
An Executive Briefing
Mark Dallmeier, Co-Founder
net Fusion Services
net Fusion Services, Inc.
7810 S Hardy Dr Ste 109
Tempe, AZ. 85284
Over the last 10 years technology and applications have continued to advance, addressing the constantly evolvingrequirements of businesses and users. New technologies and markets for those technologies have increased. ERP(Enterprise Resource Planning) systems, CRM (Customer Resource Management) systems, and Financial Management systems are more commonly known and understood. Newer technologies and markets such as EAI (EnterpriseApplication Integration), SCM (Supply Chain Management), BPA (Business Process Automation) BI (BusinessIntelligence), KM (Knowledge Management), have emerged. While some of these technologies are dynamic and powerful, they are very young in their lifecycle. The long term valueand impact to organizations is difficult to quantify or has not been broadly validated and accepted. Many organizationscontinue to struggle with knowing what technologies, applications and systems they should continue to invest in and implement during a down economy. The list of acronyms and technologies continues to grow at a frantic pace.
The vendors within the more established markets are increasing the capabilities of their applications to address growing market demand and reduce the risk oflosing market share or revenues. As this cyclical process continues, it increases the complexity of the decision process, creating confusion, and ultimately increases the decision cycle time. Increasing Vendors, Capabilities = Confusion & ConsolidationThe “New Economy”, and the influx of Venture Capital investments between 1998 and 2001 acted as the catalyst that supported thelaunch of hundreds of technology companies. Within the last 18 months, over 1000 Venture Capitalists invested money in over 900Software companies. As the vendors within the market increased, so did the number of new technologies. The increase of vendors thathave created new, niche technologies and applications has created a glut of technology providers.
Even though established Technology vendors are addressing demands from the market and preserving their market share, they are actually feeding the cycle. As vendors within one market adopt capabilities from applications within anothermarket segments, confusion and consolidation follows.This is currently being experienced within the EAI (Enterprise Application Integration), WorkFlow/Middleware andPortal markets. Enterprise Application Integration Platforms are designed to integrate applications and the data that isrequired to be moved from application to application. The value is a more automated, efficient process, resulting indecreased costs. This level of integration has typically been costly and as very lengthy implementation cycles.EAI vendors have been increasing their workflow and core integration capabilities to address the market demand forgreater business logic capabilities and reduced implementation time.
They are also beginning to web enable portions oftheir architecture. Middleware technologies have helped reduce the time for integrating systems, but typically lack thebusiness logic and flexibility that WorkFlow technologies offer.Portal platforms are designed to deliver relevant business information and applications to employees via a centralizedlocation (web browser) to increase corporate collaboration and decrease manual processes. Portal vendors are addressingthe requirements of the market to offer increased application integration and workflow capabilities within theirframework. The vendors in both spaces have experienced market consolidation for about 14 months. Expect othermarkets such as ERP, CRM, and SCM to follow.Betsy Burton, vice president and research area director at Gartner said: “By 2004 half of the vendors that were inbusiness in 2000 will not be anymore,” she warned. Gartner sees little innovation to offset future falls in licensingrevenues as the emphasis shifts to services.
How Does This Impact You?
If you continue to buy applications and systems to automate processes and solve business issues from second and thirdtier software companies be prepared to invest money, resources and time; most likely more resource and time thanexpected. Don’t be surprised if your software or technology vendors begin to disappear or get acquired. Be prepared tospend countless hours evaluating, reviewing, and witnessing demos of capabilities from multiple vendors. As thisprocess takes place, the line between vendors, and what differentiates their offerings will continue to blur.Sounds like fun doesn’t it? Yeah, we don’t think so either.The effort of quantifying ROI and the impact these technologies will have on your organization is increasing incomplexity. Because of unclear differentiation, and constantly evolving capabilities being announced from majorapplication and platform vendors such as PeopleSoft, SAP, Siebel, IBM, Oracle, Sun and Microsoft, a decision to delaythe acquisition and implementation of third party applications is sometimes the easiest and most sound decision to make.After all, if you wait another 14 – 24 months, your largest vendors (IBM, Oracle, Sun, Microsoft) may just buy the thirdparty companies – or add their capabilities to their existing suite applications or into the Platform or Infrastructure layer.
Father Time Is Against You
Analysts are projecting vendor consolidation but it may take years to happen. Your existing vendor’s product road mapmight change and they may never deliver the capabilities you need. The soft economy has increased critical issues thatfinancially impact you, and the rest of the organization. Your organization cannot wait; the issues need to be addressed,
Your existing systems and applications are maxed, or were simply not built with enough flexibility to address the currentbusiness climate. Employees, executives, and clients are demanding near real time collaboration and responses. Theyrequire correct information, the most competitive pricing, summarized reports with heavy analytics beneath; the marketexpects a vendor or partner to be extremely efficient, responsive, and profitable. All of these demands were madeyesterday, and your company is expected to deliver. How do you respond when you cannot leverage your existingtechnology to address these requirements? What can you do when the vendors in today’s technology market areconsolidating, going out of business, confusing, or are hard to work with?The SolutionBUILD IT. Reinvest in the closest business relationship you have; your own business. You have invested heavily insystems and applications over the years that hold critical information from clients, vendors, and partners.
There arecertain technologies within your business that are not broke, and are very efficient in delivering what they were designedto deliver. Most packages applications will address 70% – 80% of the business requirements, but most often, theapplications capabilities are never fully leveraged. There are a few reasons for this, but the primary reasons are becausethe market at one time requested certain capabilities, and those capabilities were added to a product road map. The factis, technology needs to be as agile as the company running it. If the company’s strategy and objectives change to addressthe market, it impacts the tools the organization is leveraging at the time.Why replace applications and systems that you have already invested money in, and are not broke?
Do not replace them- EXTEND THEM. Build upon your existing application and system capabilities; leverage your existing technology,increasing its value and usability.Recent studies show that companies are beginning to implement “Quick Hits”. These “Quick Hits” enable organizationsto rapidly implement solutions that reduce costs, immediately impacting P&L, producing rapid ROI. A recent articlefrom CIO Magazine said, “Simple products and services costing between $50,000 and $200,000 will return in a matterof months many times more in savings in such categories as infrastructure management, bandwidth optimization, Webservices-based integration, and voice and data transmission. ”Development technologies released over the last few years, have revitalized the development industry. Technologiessuch as Microsoft .NET and Web Services are being adopted and implemented by some of the world’s largestorganizations to increase efficiency, reduce development time, increasing system and application performance and lowerthe total cost of ownership for technology.
Getting Started – Identify The Need & Create An Action Plan Even if the senior levels of management within your company are not communicating frustrations with existing systems,applications, or processes, chances are, these issues are impacting decision cycles at all levels of the organization. Inorder to extend the technology that supports your staff, clients, and partners, and evolve them into more strategicbusiness tools, an evaluation of existing technologies and business processes / activities needs to take place. Once thisevaluation is complete, an action plan can be created to address the issue. The recommended approach is to begin thistask one department at a time. By following the steps below, a clear understanding of the usability of your technologiescan be assessed.! Document the existing technology being used within the department! Document the current capabilities being leveraged within the business!
Document the current business processes and daily activities of personnel within the department! Document the time and costs associated with your personnel’s existing daily activity! Begin to identify any personnel or system dependencies the existing process and applications have! Identify areas within the existing process that can be streamlined or automated – “If this step was automated…”! Create a wish list of capabilities for the existing business applications – “If it could only do this…”With net Fusion Services, your organization will be prepared to leverage Microsoft .NET, Web Services and otherleading technologies to extend the lifecycle and capabilities of legacy systems, or implement “Quick Hit” solutionsaddressing the needs of your business and the constantly changing market. When a new business application is desired,your organization can leverage our years of experience in creating and implementing business applications for Fortune500 and Mid Size organizations.net Fusion Services, Aligning technology to business objectives – FAST.To discover more about net Fusion Services, please visit www.netfusionservices.com