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Application Updates
Application Updates
Expert's Opinion
Keith Manning
CEO
Following 18 years with IBM UK and five with IBM in Atlanta, Keith and his partner Meryl McKenna formed KMA One, of which he is the CEO. KMA One is a 60-person firm which helps high-tech companies with a wide spectrum of challenges in marketing, sales, channels and product management – from strategic planning to outsourcing telemarketing. Their clients include some of the biggest names in IT and many small IT suppliers. Keith’s current personal focus is designing processes and interactive tools for his clients which focus on the business value of processes, products and services; for example, ROI estimators, lead management dashboards and strategic portfolio management tools.
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Jim Malone
January 19, 2010
Operating on Obsolete Applications?
Here is a dirty little secret. Most, organizations run on 8-year old applications.
How do I know? From working with many software vendors who struggle to move customers to new versions – even when the upgrades are “free.”
For productivity and collaboration applications (like Office) obsolete software is bad; but when it comes to the brains of corporate operations (like ERP) this is potential disaster!
Think how rapidly software applications have developed; think how many innovations there have been in the last eight years. Then you get some idea of the huge impact of using ancient ERP/SCM/CRM software – both on the individual organization and at the macroeconomic level.
Who is to blame?
- IT management has allowed creeping complexity so that updating, say ERP software, seems like climbing Everest.
- Executive management does not understand the ROI of modernizing core applications (like ERP) and the fundamental contribution to their competitive edge.
- The software suppliers hide behind “we’ve made the upgrade free” while failing to position true costs and benefits in a comprehensive, credible application update ROI.
Why does it happen?
Studies in which I have been involved reveal two common factors:
- When software becomes mature the business case for upgrading is no longer obvious – often hidden in the sum of hundreds of small benefits. Only a structured ROI evaluation exposes the enormous total value.
- Too many pragmatically acquired “extensions” hobble progress – like accretions of barnacles slowing down a ship.
Want to fix your organization?
- Find out the versions and age of the core software running your organization; ERP, SCM, CRM and productivity apps.
- If they are 4 or more years old, this five-minute video gives insight into why this happens.
- Insist that your organization deserves and needs modern applications. Demand an ROI estimate. Be stubborn and insistent and do not fall for any excuses.
Of course, this plan is oversimplified; it is not this easy. Or is it?
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Utente IT
Grazie per il bell'articolo! Lavoro come specialista IT nella mia azienda e ho cercato di tenermi al corrente dell'argomento trattato. Il suo articolo è sia informativo che suggestivo, e finalmente mi sento motivato ad andare oltre la ricerca e passare a realizzare soluzioni.
:-)#$//**\\$#
Interested IT consumer and decision maker.
Great article!
Following 18 years with IBM UK and five with IBM in Atlanta, Keith and his partner Meryl McKenna formed KMA One, of which he is the CEO. KMA One is a 60-person firm which helps high-tech companies with a wide spectrum of challenges in marketing, sales, channels and product management – from strategic planning to outsourcing telemarketing. Their clients include some of the biggest names in IT and many small IT suppliers. Keith’s current personal focus is designing processes and interactive tools for his clients which focus on the business value of processes, products and services; for example, ROI estimators, lead management dashboards and strategic portfolio management tools.
Skip Stein says a mouthful in this subject over on Linked In (http://tinyurl.com/yjca4gw). Skip raises several different issues and it is easy to agree with all of them.
But I would like to add one more. The key to smooth maintenance is architecture. Not a fashionable subject anymore - but no less powerful for not being in vogue. If you want to build a shanty town, put a set of uncoordinated builders to work; if you want to build a beautiful huge house over many years, start with an architect.
Many IT shops have been working very hard on many separate projects over the years. The result is an IT shanty town where modernizing it into an elegant building seem impossible.
OTOH, think of the triumphs of architecture we have seen in (say) hardware and OS design. Think of how AS/iSeries went from 32 to 64 bit overnight and compare that to how the PC world is still struggling to 64-bit a decade later.
Following 18 years with IBM UK and five with IBM in Atlanta, Keith and his partner Meryl McKenna formed KMA One, of which he is the CEO. KMA One is a 60-person firm which helps high-tech companies with a wide spectrum of challenges in marketing, sales, channels and product management – from strategic planning to outsourcing telemarketing. Their clients include some of the biggest names in IT and many small IT suppliers. Keith’s current personal focus is designing processes and interactive tools for his clients which focus on the business value of processes, products and services; for example, ROI estimators, lead management dashboards and strategic portfolio management tools.
Giovanni
You will be interested to know that I got a response from a very large global organization saying that they were finally replacing their creaking, 10-year old ERP with your company's flagship solution. The question is, why did they get so out of date? My guess is, that if they had done the sort of ROI assessment with which you and I have worked they would have had a good business case for modernizing many years ago. And, as you know, with the right tools, one can get a preliminary ROI in minutes. We (and also probably they) will never know how much efficiency and effectiveness they have eschewed by putting off the project for so long.
But, as they demonstrate, it isn't a question of "whether" to update one's ERP - rather it is a question of "when".
Thank you Keith for sharing your observations through the 5 minute video which I can recommend people to watch over a cup of coffee. Time well spend in mind setting; identify the mission before setting goals is indeed a good starting point.
Following 18 years with IBM UK and five with IBM in Atlanta, Keith and his partner Meryl McKenna formed KMA One, of which he is the CEO. KMA One is a 60-person firm which helps high-tech companies with a wide spectrum of challenges in marketing, sales, channels and product management – from strategic planning to outsourcing telemarketing. Their clients include some of the biggest names in IT and many small IT suppliers. Keith’s current personal focus is designing processes and interactive tools for his clients which focus on the business value of processes, products and services; for example, ROI estimators, lead management dashboards and strategic portfolio management tools.
BadgerGrad
With major apps (like ERP) accumulated "customization" often becomes the biggest barrier (cost) to upgrading to newer releases.
If the real cost of upgrading the "customized" part of the application has grown to be very big, there is no alternative than to just face it. The only "recommendations" I can make based on examples I have seen are:
1. Be sure the integration costs are not exaggerated. Get a services quote from the app vendor to do the integration for you as part of the upgrade. This, at least, gives you a firm cost to discuss with the other decision makers.
2. Get a thorough benefit evaluation. Even if the integration costs are huge, if the benefits are 300% of huge and the payback is less than two years then the project should still fly. (My experience is that most people have a much clearer picture of costs than they do of benefits; if you haven't already, click the link in the main article to watch the video for details)
3. Ensure the organization learns from this experience. If earlier "customization" is inhibiting progress now, was that customization such a good idea? And was it done the right way? How should "customization" or extension projects be evaluated in future to ensure that they don't have hidden costs in future flexibility?
This reply is already far longer than you probably wanted. But in the unlikely event that you want even more, let me know as I have seen some disturbing examples of customization and third-party add ons biting the hands that fed them.
What do you recommend when a lot of customization has taken place with the ERP software? Customization adds another level of complexity to the upgrade decision-making.
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