Particularly as companies grow, they implement point solutions to satisfy the needs of individual departments. This often includes one-off tools and systems from different vendors, which are cobbled together point solutions. There are often interfaces between the systems that shuttle information back and forth. As any CIO knows, what often results is a fragile spiderweb of systems where a change in one part of the system results in a breakage in another. One company referred to this as a hairball, which is an accurate description. With data duplicated and stored in multiple systems, there is no single version of the truth as reports from departments and systems have slightly different data.
When looking at the overall costs of maintaining duplicate or overlapping systems, as well as the overhead of maintaining duplicate data, the total cost of ownership of a hairball application portfolio is high. Although it is a high entry cost scenario to design systems for the whole enterprise, over the long run it saves money for an organization because you are able to reuse data and logic.
It is important for a company to practice integration management to engineer the applications as a whole. When designing applications, reduce the number of interfaces between applications. Typically, interfaces take the most resources and costs to support over the long run.
Changing the applications portfolio to take an enterprise view is not just an IT issue but also a business issue. The individual business departments are typically accustomed to getting a solution when they want it and they do not have to coordinate or involve other departments. Changing to an enterprise view requires support from the top of the organization as you need to override the needs of one department for the benefit of the entire organization. One way to make the transition from a point-solution approach to an enterprise view is to be part of an overall assessment and strategic planning process that looks at the business needs and applications in total.

Structured Selection Process | APPLICATION PORTFOLIO

When evaluating software packages, you can save a considerable amount of money by doing it correctly and selecting the right tools. It saves you from re-implementing a different tool a few years down the road, which can be a tremendous expense. It is often helpful to engage the assistance of a consultant who uses a structured selection methodology and is experienced in selections and in the particular application area. They are able to save you significantly more than their cost by helping you select the right tool, engaging support throughout the organization, and facilitating negotiation strategies throughout the selection process. However, be cautious about hiring service providers who have implementation resources in one of the reviewed packages as they may bias your selection. Remember, implementing and supporting new software is an expensive proposition, so it is well worth the time and money to make sure it is the right direction before beginning implementation.
The following are tips to include in your selection methodology to reduce overall costs:
  • Make sure you cast the net broad enough. Do not just evaluate the packages that you have heard about or read about in magazines. Seek the help of experts and open your evaluation to additional options such as software-as-a-service (SaaS) and other options covered at the end of this chapter. It is much easier and cheaper to cast the initial net broadly through a long list, and then narrow your search in order to consider all possible candidates and a reason for eliminating each one. The mistake many organizations make is that they start with a relatively short list and end up adding candidates late in the process because vendors pop up with no compelling reason for elimination. Be a thorough and educated buyer.
  • Your first contact with a vendor is not too early to start planting the seeds for the negotiation process. Have a plan and strategy for negotiating the best price. That said, licensing software is nothing like buying a used car. View your vendor as a partner, not a car dealer.
  • Carefully identify your requirements and prioritize the needs from the wants. Educate the users about the possibilities before participating in demos so that users do not discount the software because it does not do it the way they do it today.
  • Clearly identify the business goals and objectives you hope to achieve with the new software in order to align expectations.