To maximize benefits, business and IT should collaborate on upgrade decisions.
by Dr. Madhavan Veeravalli
At several points in their businesses’ lifecycles, executives will face the decision of whether or not to upgrade their technology systems—be it software, hardware, or the overall IT infrastructure. This decision is often cast in a technical context, making it seem like a consideration that lies only within the boundaries of the IT organization. The presumed expectation is that, whatever the decision, the IT organization will continue to serve the business with minimal to no interruption or exposure to continuity risks. As a result, IT decision-makers often find it easier to postpone or avoid an upgrade decision as long as possible, to minimize cost outlays and potential business discontinuities.
While “if it ain’t broke, don’t fix it” may be a common adage, IT managers are only too aware that delaying timely investments can result in technology-capability divergences that can deprive the business of newer functionalities and potentially erode competitive edge. This may have the perverse effect of exposing the business to greater costs and untimely service interruptions.
One of the many limitations of making the decision to upgrade an IT-specific consideration is that it casts the players—IT and business—in a vendor-consumer role, as opposed to that of joint stakeholders in a decision that can define continued business success. Framing it more comprehensively in terms of business value, with joint IT-business ownership, can help define the priority of complex upgrade decisions.
In order to achieve the best possible outcomes in the upgrade decision-making process, organizations should adopt a comprehensive approach that determines the value of the upgrade in terms of three factors: total benefits, total costs, and flexibility.
Credible benefits analysis starts with relevant strategic imperatives and business objectives. These serve as anchor and reference points in ensuring that benefits are relevant to the business. It is important to collaboratively articulate the benefits a systems upgrade can deliver in light of these guiding business performance targets—including savings from process enhancements, improved regulatory compliance, better performance through the retirement of brittle IT customizations, and better business intelligence for improved decision-making.
Complexity drives cost considerations. A number of factors need to be considered in determining cost, such as cost of implementation, extent of configurations, internal resource costs, level of integration, organizational costs, and cost of skipped upgrades. Newer technology options such as software as a service (SaaS) or infrastructure as a service (IaaS) have simplified both upgrade costs and processes. Software and technology upgrades are delivered more frequently and less disruptively as part of the service.
Flexibility is the ability for IT solutions to evolve as business needs change. Technology that nimbly adapts to business changes is more valuable over the long term. Processes can be enabled more quickly and at lower cost, compared to older, more complex systems. By embracing a flexible IT solution, management can put their systems on an intelligent upgrade path and further minimize the effort it takes to adopt future releases. This prevents cost spikes and business disruptions.
As management develops a collaborative approach to upgrade decisions involving business and IT, leaders can gain a comprehensive view of business value, in effect demystifying upgrade decisions. This allows them to focus on their core competencies and truly treat technology as an enabler.
Dr. Madhavan Veeravalli is vice president of Oracle’s Industry Strategy and Insight team, focused on the manufacturing, retail, and distribution industries.