Measuring the Benefits of Enterprise Software: Insights and Strategies

There was an interesting survey published just over a week ago - Axios Systems, an IT services management software vendor, commissioned interviews with 1500 IT executives in North America, Europe and Asia.

The headline was that 57% of interviewees felt their IT systems, processes and services were not delivering the value expected of them by their companies.

I was taken with two other points - 67% said that they still had no way of directly measuring the business value of their IT systems in real time, and 63% said that cost reduction would be their #1 driver over the next 12 months.

"Let's go change what we cannot measure" would seem to be the unfortunate implication.

However, I'm inclined to see this as an insight into the current state of mind of Enterprise IT groups. Many "go achieve more with a reduced budget" memos have been written in 2009, and the effect on morale must be significant. One problem of measuring quantifiable benefits of enterprise software is that there will be dozens (if not hundreds) of individual applications in use by a company at a given time, and knowing where value was added to the mountains of data is never an easy matter. Subjectively, one knows when an IT application has made something faster, better, easier; but it isn't always easy to see it on the top or bottom line. In this climate, it may be a better idea to put the metrics on hold and follow companies that are exploring the cost reduction promise of open source, cloud computing and virtualization technologies.

A good time to consider the cost of switching from an expensive proprietary solution is when the annual support and maintenance invoice falls due. This is often higher than the Year 1 cost of a commercial open source alternative (and support costs in subsequent years for the alternative will be substantially lower).

I read a case study recently about a Legal firm moving from an expensive  traditional client/server document management system to open source - a quote that stood out was that it took the project team months to get management approval for the switch because "it all seemed too good to be true". Certainly good enough to overcome the prohibitive costs often involved in such a change.

But it would be a mistake to focus only on cost - the 'fit' of services offered, published APIs, plug-in modularity, feature extensibility when required, and avoidance of proprietary data format lock-in are equally salient. Open data is just as important as open source if you ever decide to change your mind about an application or vendor.