It probably comes as no surprise that research shows having your IT house in order is good for business. The Harvard Business Review published a report a few years ago stating as much, but the fact is, this notion is truer today than ever before. Innovation in information technology and management of that investment is directly related to the ability to grow and compete, and ultimately, overall business success.
Beginning in the 1990s, competition between businesses in the U.S. accelerated to unprecedented levels in large part due to mainstream adoption of commercial enterprise software and use of the Internet.
In fact, the Harvard report found that the central catalyst for this massive shift was a measurable increase in the power of IT investments as more organizations moved to upgrade existing operating models or replace their legacy enterprise software. According the U.S. Bureau of Economic Analysis, corporate investments in IT during the twilight of the last century ballooned — from approximately $3,500 per worker in 1994 to about $8,000 in 2005 — as businesses raced to compete.
“The changes in competitive dynamics are most apparent in precisely those sectors that have spent the most on information technology, even when we controlled for other factors,” notes the report.
In this environment, where investing in enterprise software is akin to keeping up, it’s critical to deploy these investments strategically, making Software Asset Management a key component of one’s ability to compete.
The need to have your IT house in order is not limited to technology-focused companies; it is also true for traditional industries. Otis Elevator Company, for example, was able to realize shorter sales-cycle times as well as higher revenues by replacing its outdated software with an enterprise technology platform designed to seamlessly connect sales, factory, and field operations. Similarly, Cisco Systems Inc. managed to untangle its “legacy spaghetti” to the betterment of business.
What’s more, the Harvard report found maintaining a consistent IT infrastructure is critical:
“Even if a company invests heavily in standardized enterprise software for the entire organization, it may not remain standard for long, as the software is deployed in ways other than it was originally intended. … When that happens, it’s almost certain that data, processes, customer interfaces, and operating models will become inconsistent — thus defeating the whole competitive purpose of purchasing the package in the first place.”
Similarly, purchasing and maintaining software that’s not being used to its full capacity can be a drain on business — and dampen the promise of competitive gains resulting from strategic technology investments. This is where software asset management, specifically software usage analysis, can play a critical role.
If software assets are being underutilized, what are the barriers to adoption? Are employees not optimally trained? Are additional systems needed to bridge the gap between legacy and new applications? Does lack of standardization across the enterprise thwart efficiency and therefore stifle the appetite to use new software? The more visibility you have into usage of your software investments, the better you’ll be able to sleuth out and overcome roadblocks that curb the very improvements new technology is intended to spur.
Healthy IT will continue to be a key differentiator between businesses that keep up, and those that fall prey to competition. The Harvard report urges business owners to deploy IT in two distinct roles: “as a catalyst for innovative ideas and as an engine for delivering them.”
On a macro level, it’s about utilizing your organization’s IT and software investments to their fullest potential.
While it’s not always easy for companies to deploy enterprise IT successfully, the outcome is well worth the effort. And those who change employee’s attitudes and behavior toward — and ability to optimally utilize — new technology can expect outsized rewards, “at least until another player comes along and uses IT to propagate a business innovation that’s even better.”