The Benefits of Focusing on Technology ROI (Return on Incrementalism)

Bombarded by rapidly changing business requirements and frustrated by the constraints of legacy management and control systems, the natural reaction of technology decision makers may be to rip out the big, old platform and replace it with a big, new one. But that isn’t always the best answer.

As Sanjay Srivastava and Gianni Giacomelli write in IndustryWeek (Separating Impact from Hype: How CFOs Achieve Technology ROI), ” A huge, multi-year implementation is no longer the only option available to leverage better technology. In fact, massive implementations can sometimes undermine actual business goals.”

Benefits of an incremental approach to technologyThe two authors ask why “so many companies reach the end of a multi-year deployment only to discover they are not materially better off than before, and that the world has moved on to the next big thing,” and contend this is because, in many instances, enterprises “implement a vast array of process and technology improvements rather than surgically target the actual drivers of desired business outcomes.” In other words, firms take a revolutionary “rip and replace” approach to large systems rather than implementing flexible, incremental answers to specific business needs.

Though the article focuses on ERP, the same principles apply to any large enterprise system, including IT service management (ITSM) suites. With that in mind, here are five ways Srivastava and Giacomelli explain how organizations can avoid technology overkill and profit from an incremental approach.

Achieve speed through agility

As the authors point out, “too often, a carefully planned deployment meant to address particular problems is implemented so slowly that by the end, business needs have radically changed and the solution is no longer adequate.” Furthermore, comprehensive enterprise software suites are “prone to expensive customizations, are non-intuitive to business users,” and can be risky to change; a modification to core code in one place can easily “break” a function somewhere else.

With an agile approach, enterprises can solve specific problems quickly, at a layer separated from core enterprise suite code,  and then build on those developments over time. These new capabilities can be tested, tweaked, and optimized without touching core code. The direction of development can change as business needs change. Business users are freed from the need to specify all of their requirements (not to mention unknowable future needs) up front.

“Targeted interventions will solve their problems, at far less cost and with significantly shorter timelines than an enterprise-wide upgrade,” the authors conclude.

Empower users with technology

The IndustryWeek article notes that “An effective framework for driving improvement would measure and benchmark the performance” of key business metrics,” then develop effective processes that drive movement in those metrics. The underlying technology should support those processes rather than try to force-fit human behavior to accommodate the technology—a common issue in IT-driven projects.”

This objective is too often pursued through “shadow IT” projects. IT teams can’t develop everything, and business users don’t want to wait for new functionality, so they work around IT. While this approach can solve specific business needs more quickly, it’s also potentially wasteful, redundant, and raises compliance and security concerns.

A better approach is to provide business process owners with IT-approved tools like graphical workflow mapping software and request-oriented low-code tools enabling them to build their own automated processes, with minimal IT assistance.

Invest in tools that will last, even as business needs change

Replacing a legacy ERP, ITSM or other core management system with a newer cloud-based platform may not be the right decision today—but that could change tomorrow. Most legacy systems will be replaced eventually, but if today’s agile business processes are developed with the right tools, they can be re-used with only minor adjustments.

As Srivastava and Giacomelli write, “Business stakeholders…should collaborate thoroughly with IT…to focus efforts and guarantee future flexibility. A robust solution might not last more than a few years because of the likely business changes that will soon intervene.”

By investing in tools that support common communication protocols (API’s, Web Services, SOAP, REST, etc.), enterprises can enable users to build business process flows that can easily be adapted to changing needs, and will work not only with the core management systems in place today, but with whatever replaces them tomorrow.

Extend the life (and capabilities) of core platforms using systems of engagement

Legacy application suites are generally very powerful, though not always user-friendly. Building modern, web-and-mobile enabled systems of engagement on top of core systems of record enables new applications to be developed that are simple, easy to use, and provide the information and capabilities business users need (and nothing more) without modifying core legacy code.

As the authors write, “Once a more targeted scope has been defined, organizations are better able to leverage advancing technologies: new point solutions, workflows, wrappers and other tools (including those leveraging cloud-based delivery and mobile solutions)… Cloud-based solutions, mobile extensions and ‘systems of engagement’ can sit on top of traditional ‘systems of records’…increasing efficiency and effectiveness while keeping the effort finite.”

Incremental evolution beats disruptive revolution

Large-scale projects—such as replacing a core ERP or ITSM system—not only entail large costs, significant disruption, and long timeframes, but also greater organizational friction because of the magnitude of behavioral change required. That’s not to say such projects are never worthwhile, but only that faster, smaller-scale, agile, and more flexible alternatives should be considered, particularly if those alternatives are “future-proofed” to some degree.

As an example, replacing a core ITSM system can take two years or longer, while upgrading one specific area–such as replacing a cumbersome and inflexible IT service catalog with a simpler, customizable portal than can be used for enterprise-wide service requests–can be accomplished in two to three months.

It’s hard to disagree with the conclusion of the authors: “thoughtful, process-based design and transformation can harness the newest technology for what matters, thoroughly utilizing process analytics and focusing on how business process (and the related human factor) drives the desired business outcomes, while retaining the flexibility to adapt to future needs.”

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