Tuesday's Tip: How To Evaluate Tech Projects For Business Value

May 24, 2010


Today's Evaluation Frameworks Miss The Point

Business leaders seek clarity in understanding which technology solutions drive the most business value.  Today's frameworks often focus on a combination of:

  • Features - ability to execute, current offering, product depth, etc
  • Direction - vision, strategy, corporate leadership, etc.

Unfortunately, the intersection of features and direction only addresses potential.  Clients continue to express how potential alone no longer provides enough justification in vendor selection or understanding the overall adoption strategy.
Next Gen Evaluation Frameworks Must Start With Business Value
Business leaders seek returns on investment.  IT leaders strive to reduce cost of delivery.  ROI alone may not answer the question as business value needs to be expressed and compared.  Business impact remains the goal in building out new frameworks.  In addition, the cost of technologies must be factored.   As a result, key questions in vendor selection often include:

  • Will this product provide an ROI?
  • Where will the organization realize a business impact?
  • How do various solutions compare in delivering business value?

Organizations Must Balance Business Impact And Cost Of Technology Delivery
Based on conversations with 113 end user clients and vendors, there appears to be a market demand in building out a new framework that compares how (see Figure 1):

  • Business impact extends across the value chain. Business impact extends into 3 levels of maturity from internal to external (i.e. department, cross enterprise, and business value chain).  The greater the penetration of the solution, the greater the business value.
  • Cost of technology delivery measures against percentage of revenue. Both scaling and return on investment reduce the cost of delivery.  Reference data provided via customer references and case studies will provide key data points by industry, size, and geo.

Figure 1. Extent Of Business Impact And Cost Of Technology Delivery Drive Business Value

The Bottom Line - It's Time To Apply The New Model
Evaluation frameworks of the future must begin the process of identifying the key criteria required for end users to be successful with both their business and IT stakeholders.  A confluence of disruptive business models, rapid adoption and obsolescence of technologies, and demand for business value data drive the need for this new model.   Expect next gen business and technology leaders, research firms, and technology consultants to start today.

Pilot's Log (Behind The Scenes)

On the buy side, I've spoken with over 100 end user customers who remain frustrated with the existing evaluation models.  They are ready to embrace models that measure business value.  On the sell side, I was meeting with SAP a few weeks back to discuss their new industry strategy, which they launched at SAPPHIRE.  When talking about what customers really need, we rekindled this concept of business value and IT value.  In fact SAP is aiming their new industry strategy at providing a healthy balance between the two.  Conversations with other vendors, hint that this concept will soon catch on.   Look for some new evaluation frameworks to emerge from Altimeter this year as we build against these core principles.

Your POV.
Ready to put this model to work in evaluations?  Do you think analyst firms should conduct research using this framework?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.
Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

  • Evaluating tech projects for business value
  • Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
  • Designing end to end processes and systems
  • Comparing SaaS/Cloud integration strategies
  • Assisting with legacy ERP migration
  • Planning upgrades and migration
  • Performing vendor selection
  • Providing contract negotiations and software licensing support

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved

Cupertino Ray Wang Ray R Wang Business Objects England Ireland Manchester Manchester Central (GMEX/MICC) R "Ray" Wang; SAP UK and Ireland Users Group user event user group events user groups Apps Strategy Cambridge Enterprise apps strategy Hyatt Regency Cambridge Massachusetts Sapience speaking engagement ADP Advanced Systems Integration AFS Technologies AMR Research BAE Systems Bersin & Associates Blue Martini Borland Software Business 2.0 Callidus Software Capgemini Catapult Thinking Cognizant Cognizant Technology Solutions Collins Computing Deloitte Dianomi Edutrek International Emedia Epicor Epicor Software Eurofighter Greylock Partners GXS hcl HCL America HCL Axon HP Enterprise Services i2 i2 Technologies IFS Informa Telecoms and Media Infoseek.com Infosys Infosys Technologies Ltd. InnoVentry JD Edwards JDA Software Jefferson Wells International Jim Bozzini Leighanne Levensaler Mahindra Satyam Microsoft Dynamics Mike Stankey OptionEase Oracle Patni Patni Computer Systems People Whispers Peoplebase PeopleSoft Phil Fehrst PolyServe Remedy Software rimini street Sage Group sage software Siebel SmartForce SumTotal Systems Synaptris SystemLink Enterprise Solutions The Funding Partnership Tim Fortier Time Inc. Interactive Tony Kender Ultimate Software Vigor Wednesday's Whispers WorkDay 3rd party maintenance best practices bill of rights Contract Negotiations contract strategy enterprise applications enterprise apps Enterprise Business Apps Enterprise Business Apps Vendors Enterprise Software Enterprise Software Licensee Bill of Rights ERP IT Strategy license credits to new products license fees license policy license returns maintenance fees software contract reviews software licensing software licesing and pricing software ownership costs software pricing sourcing Third Party Maintenance total account value Tuesday's Tip vendor management Vendor Selection business requirements business solutions CDC Software channel programs channels cloud computing Exact Software financing options Infor Lawson market strategy Microsoft Microsoft Business Solutions Microsoft Office NetSuite QAD SaaS smb SME social enterprise apps Software Ecosystems software trends software vendors Syspro vendor financing vendor strategy VM Ware Web 2.0 CUE Herbert B. Gonzalez Convention Center Lawson Global Users Group Lawson Software San Antonio Texas user conference vendor events Gaylord Texan Hotel & Convention Center sterling commerce Sterling Commerce Customer Connection Atlanta Georgia Georgia World Congress Microsoft Dynamics Convergence las vegas Nevada The Palazzo Tibco Tucon AX Decisions 2009 Industry Event Microsoft Dynamics AX virtual event bill of collaborative research customer bill of rights license parking procurement Software as a Service software ownership lifecycle Thursday Thursday's Thanks data import eBau Friday's Feature information quality master data management MDM Pursima SaaS offensive #oow09 California Charles Phillips event report Exadata Moscone Center Oracle mix Oracle Open World Oracle Partner Network partner ecosystems partnerships san francisco Trip Report Oracle Fusion Apps Oracle Fusion Middleware People Sun Microsystems Altimeter Group crm; Enterprise 2.0 Research Report (Source: D&B ) customer relationship management (CRM) deployment options future of business IBM Launch News Analysis order to cash Uncategorized usability user experience users Ariba boomi business process business process management business process optimization canonical data models cast iron systems CIO commoditized business process Concur data governance data integration design phase hybrid deployments informatica Jive Jive Software line of business long term apps strategy middleware platforms Open Air peanut butter and jelly Pervasive Software saas integration SalesForce.com SnapLogic SOA SocialText Talend Xactly BAM BPM business activity monitoring Epicor 9 Epicor Everywhere HR human capital management Microsoft.NET Product Review Progress Software role-based design Search ue ui user interaction ux business process transformation cdi customer data integration Customer Hubs data stewardship Trends eCommerce product road maps Blackboard Deltek Manhattan Associates Quarterly Financial Tracker revenues RightNow SII Software Insider Software Insider Index Taleo business execs Business Suite 7 customer advisory boards enhancement requests role of user groups SAP Business Suite 7 SAP Enterprise Support SAP User Group UK & Ireland 2009 Accenture Alphablox and Garrison Andersen Consulting Apple AT Kearney Aurigin Systems Bates Advertising Booz Allen & Hamilton CA Cadbury Schweppes CCL Group Charlie Isaacs Chuck Gillespie Clear Stake Computer Associates David Stanley DEC Digital Equipment Corporation DNA Stream Dr Pepper Eric Christiansen eWeek Forrester Research Gartner GE Healthcare Graybow Communication Group Hewitt Associates IBM Global Services IDG Enterprise Infor Global Solutions GmbH Initiate initiate systems Intuit Intuit Quick Books Invest.change ITT Gilfillan Jeff Comport John Tae Park Joseph Loveless Justin Floyd Marcel LeBrun McAfee Michael Hickins Michelle Blackmer Mongoose Cricket netbooks Orange Business Services Paul Primus Knowledge Solutions Radian6 Ridgely Evers Rifkind Robert Humphrey Robert Schriesheim Rockwell International Saba Sanjay Poonen SCORE Siemens Snapple Sriram Venkat Stefan Schulz Stephen Harvey Symantec Thomas Wailgum Thomson Legal & Regulatory Toshiba America Medical Systems TRW Unimax Vecta VERITAS Weiss WGSN Wharton Wipro Ziff Davis Enterprise innovation Speaker Notes benchmark performance customer service DSAG It's the relationship It's the relationship stupid! lessons learned Maintenance Hike spend management SUGEN 2010 archiving best of breed CastIron disruptive disruptive technologies EMC enterprise architecture EscrowTech Google Google Apps Engine hybrid IBM Blue Cloud IBM Optim InnovaSafe integration Iron Mountain market trends Microsoft Azure NCC Group OpSource PaaS pervasive platform as a service RainStor SaaS Bill of Rights SaaS escrow SaaS strategies software bill of rights software escrow storage Zoho business drivers business value entry points kpis outcome focused Boston Boston Park Plaza compliance software cost reduction CTO custom development Delivered Innovation economic recession ecosystems Jim Hagemann Snabe John Wookey Microsoft Sharepoint Microsoft Silverlight Peter Graf SAP Business By Design SAP Influencer Summit SAP OnDemand Large Enterprise Acresso Software Alexis Karlin Alterian Anders Trolle-Schultz Andrew Kisslo Application Partners Arrowsight Axentis Basware Berling Capital Bill Geist Bob Suh Bruce Richardson Cambridge Technology Partners CCL Group PLC cognos Crayon CSC Index Denmark Endeavor Information Systems Eurocloud Eventbrite Experian Feisnstein Kean Healthcare Flexera Fornebu Consulting A/S General Electric Glenn Gruber Gloucester County Chamber of Commerce GV Rao Headstrong Hotelzon Technologies and Development iGate Global Solutions Illinois Department of Veteran's Affairs Inc. International Aid Jari Tavi Jessie Paul Joanne McCool John Taschek Joseph Stanhope Kyocera Electronics LLC Lonely Planet Loyalty Agent Ltd. Marina Kosmatos MarketerNet Michael Corkery Michael O'Kelly Mitch Wagner Neolane Ness Technologies Norsoft Norwest Venture Partners Offbeat Guides Ogilvy & Mather Oracle Applied WebCenter Solutions Pansophic Systems Parlex Corporation Pascal Sero PaulWriter Perot Systems Power Paper Primavera Systems PS Village Red Cloud Bank Reichhold Roger Bottum Scientific Atlanta Sony Pictures Entertainment SSA Global Stephen DePooter Sutter Hill Ventures Symphony Services System Software Associates Tagged Tamara Mendelsohn Ternary Software Whitman-Hart Whittman-Hart World Bank Zia Yusuf application development architecture Business Models change enteprise architecture information management infrastructure macro conditions next gen cio pace of technology adoption project management security skill shifts user strategy workplace dynamics business impact business process improvement business strategy collaboration iterative management strategy organizational strategy organizational trends pace of change static success technology adoption viability 3PM Adobe ALM application extension and usability application life cycle management customer experience management disaster recovery DR ERP-Link GuiXT HA Hayes Technology high availability Hyperformix IntelliCorp license management Microsoft integration optimization rwang0 SAP Duet secondary market shelfware SusenSoftware Synactive The SAP Optimization List Tidal Software upgrades used software UsedSoft virtualization VMWare West Trax Winshuttle Cerner Cloverleaf Epic Software Epic Systems HCIT health information exchanges healthcare Healthvision HIE MEDITECH mergers and acquisitions Siemens Healthcare collaboration software content management IBM Lotus IBS Software orlando Adobe Air benchmarking HTML 5 implementation information broker Information On Demand Information Week Monday's Musings prediction rapid implementation scalability strategy subscription pricing trending upgrade Alan Webber analyst relations analyst strategy choose define design thinking enterprise strategy government government innovation growth ideate implement industry analyst influencer relations learn Lora Cecere Personal Log prototype public sector research supply chain acquisitions BlueStack database mergers middleware Oracle-Sun partners RedStack servers sun virtual machines AddressDoctor Applimation Cloud data quality DI DQ hp Identity Systems Itemfield Ivan Chong Similarity Systems Siperian Social CRM Ascential Systems Bill Conroy CrossAccess Datactics dbMotion DWL EII ibm software group Kalido LAS Lombardi PIM product information management Raytheon SoftwareInsider SRD Trigo Unicorn Venetica Visionware bill mcdermott CEO Co-CEO Hasso Plattner Léo Apotheker Software vishal sika Gerhard Owald John Schwarz Peter Lorenz agresso analytics AspenTech baan BPCs Cincom enteprise apps geographic requirements IBS industry requirements Intentia IQMS Lawson M3 Lawson S3 Maconomy MAPICS Meridian Systems Microsoft Dynamics GP Microsoft Dynamics NAV Microsoft Dynamics SL Mincom modernization next gen IT leaders OpenAir Planview Plex purpose built regulatory compliance reporting ROI SAP B1 SAP Business All-In-One single instance erp SyteLine tax requirements Tenrox two-tier ERP Unit4 AppExchange beta Chatter Facebook Google Wave Linked In Marc Benioff Microsoft Outlook Social Connector office productivity Project Vulcan Amdahl anti-trust Christine A. Varney Geac Grace Consulting industry trade groups Infor Flex intellectual property IP Joaquín Almunia netCustomer OAUG Quest Quest User Group Seth Ravin Spinnaker support Alex Kao Alp Hug Anil Patrick R Anshu Sharma Apex Charter Management Bank of America Brian Swift Check Solutions Comsys Credit Agricole Securities (USA) Inc. David Anthony Wilkins Dawn Habgood Donna Goodwin DuPont Ed Maguire Enterprise Irregulars FrontStep Hewlett Packard ICI Indian Express Jeff Onesto Jeff Ralyea Jim Kaskade Jozsef Terenyi Karla Rose Hanson Katharyn White Koshy ALEX Kraft Foods Lowe's Companies Mike Gunter Nenshad Bardoliwalla NetGravity NuStar Energy Oliver Claude OpenText Option Ease Paul Alessi Primo Water Corporation Proferi Roebuck and Co Saffron Media Pvt Ltd's Sears Siebel Systems SIOS Technology Stratvantage LLC TechTarget The Frayman Group Universal Orlando Valero Unit 4 3VR Active Endpoints Andy Warzecha Ashesh Badani AT&T Wireless Azul Partners BG+H Capital One Chomp Cisco Systems ClearCross Click Commerce Consult HR Solutions Enterprise Irregular Felton E. Lewis Gladson Greenwood Publishing Group Horses For Sources InformationWeek Intel Corporation Jason Busch Jeff Prillaman Kara Wilson Kinemo Krishnan Parasuraman Kulesa Faul Lafe Low Laura Fitton Lauren McKay Lisa Whelan Mary Hayes Weier Netezza Network General Nitin S oneforty inc Open Mobile Solutions Palisade Systems Palo Alto Networks Paul Papdimitriou Phil Fersht Pistachio Consulting Rajesh Nair Red Hat René Bonvanie Ronda Pitts Krier Sacnchit Vir Gogia ScanControl Social Media Club Somotsoft Spend Matters Group Springboard Research SPSS Steve Cole Swissgrid Tami Casey TEDxTokyo Todd Craig Tri Phan United Business Media Brent Leary collaboration insights crowdsourced R&D Dion Hincliffe early adoptions early movers enterprise collaboration Erin Kinikin Esteban Kolsky evangelizables extended collaboration groundswell hollistic approach innovation insights John Lovett John Ragsdale Josh Weinberger marketing Marshall Lager near tipping points Oliver Marks Paul Greenberg peer-to-peer unpaid armies proacitve social lead generation rapid social marketing response rapid social sales response sales seamless customer experience service social business software social campaign tracking social customer insights social event management social marketing insights social sales insights social service social support social support insights social technologies Susan Scrupski VIP experience choice Maintenance MIcrosoft Dynamics CRM MIcrosoft Dynamics ERP predictability software maintenance technical support value advertising agencies change management eCommer SCRM Activant Systems Amdocs Aspen Tech Featured Kronos Red Prairie Right Now SAS Institute Success Factors Sungard Cloud options code modification configuration consumption creation customization DaaS development as a service hosting IaaS Infrastructure as a Service James Governor Michael Cote NextGen orchestration Phil Wainewright product lifecycle server virtualized software appliances software ownership software version tenancy True SaaS vendor costs APAC Australia Australian SAP User Group Darling Harbour North South Wales SAUG SAUG Summit Sydney Sydney Convention and Exhibition Centre user group event Aneel Bhusri Chiquita Dave Duffield Flextronics HCM payroll strategic HCM succession planning Workday Rising lawsuit back maintenance fees bug fix revenue recognition SCM self support software revenue recognition rules vendor threats adverse event reporting system AERS Bioclinica CDMS clinical data management system clinical trial management software ClinPLus CTMS DZS Software Solutions EDC electronic data capture eResearch Technology health sciences IBM Cognos industry vertical life sciences Lifetree Research Medidata Solutions Medidata Solutions Worldwide Mednet Healthcare Technologies Merge Healthcare OmniComm Perceptive Informatics pharma Phoenix Data Systems SAS softwarein Study Manager TranSenda TrialWorks Amazon EC2 enterprise performance management Lawson CUE Lawson Talent Management Lawson Test Drive Mid market Oracle Enterprise Manager saas bigots ADP Employease Box.net cloud integration disruptive technology Intacct QuickBooks Snaps SugarCRM the "I" word Thursday's Tech Showcase Andrew Cotton AT&T Capital Corporation BP British Petroleum Bryan Vanderkruk CentrePath COLLABORATE Frank Auger HubSpot IXIS Asset Management JF Davidson John Refford Marc Conway Marnie Breton Metallect milestones moves New South Wales promotions Thomson Financial University of Sydney Westfield Group Yankee Group Actuate approaches and styles apps strate Aster Data BI BIRST business intelligence Capscan data warehouse DataFlux DataFlux (A SaaS Company) Datanomic DW Experian QAS Greenplum HP Neoview IBM (including Initiate) Informatica (previously Siperian) Information Builders information management matrix Inquera Melissa Data Microsoft (DATAllegr0) MIcroStrategy myDials Next Gen Apps next gen enterprise Next generation apps Omikron ParAccel Pitney Bowes PivotLink QlikTech reporting paradigms SAP BusinessObjects (FirstLogic) SAP Sybase IQ Satori semi-structured data structured data Terradata Trillium Uniserv unstructured data Vertica visualization Academic Volume Licensing Program BPOS Business Productivity Online Suite CASA Electronic Software Distribution ESD Forefront Online Protection for Exchange GeoSynth Microsoft Corporation Microsoft Licensing Microsoft Worldwide Licensing and Pricing Office Professional Plus 2010 Office System Software Assurance Renewal Open Value Subscription PhotoSynth Rental Rights software licensing and pricing Windows 7 Professional Upgrade Windows HPC Server 2008 alliances Azure BEA WebLogic Gigaspaces Gridgain IBM WebSphere Imaginea Java Java PaaS LongJump Microsoft .NET Rackspace Cloud Tools SAP NetWeaver Spring Source vmforce VMW Box Diigo Mario R. Cavagnari PowerSchool Rodney Goodger Safari Webclip Sazell SimplyBox softwwareinsider start up Yahoo! 5M’s Attensity Biz360 Brad Brodigan community platforms customer relationship management Empolis GmbH eService Living-e AG management mapping measurement Michelle DeHaaf monitoring SCRM use cases smm social media monitoring use cases adoption custom apps on-premise packaged apps renewal selection single instance two tier BuzzGain Clarabridge Cymfony Jennifer Zesut Lithium Lithium Technologies Lyle Fong Scout Labs Viralheat Visible Technologies China finanical services IMDB in-memory databases mobile mobile platforms softwareinisider Sybase Sybase Uwired Business by Design ByD ecosystem certification In memory in memory database Polls SAP Innovation SAPPHIRE BBD Cisco Clear Standars EhP intel iPad On Demand On Device real time RIM SapphireNow sustainable Syclo unwired Vishal Sikka acquisition AT&T B2B Integration B2B Managed Services Collaboration Network Comergent Dublin eInvoicing GenTran Integrator managed file transfer Mobile Solutions Nistevo Ohio order management The VAN yantra cost of technology delivery evaluation framework next gen next generation