January 16, 2013
One of our recent surveys on business applications shows that more than 60% of business and business technology (BT) decision-makers consider consolidating, rationalizing, and transforming their business applications a high or critical priority — business applications drive three of the top four software initiative priorities (see the figure below). If we include closely related analytics, business intelligence (BI), and decision support tools, we cover all four top priorities.
At the same time, business and BT execs responsible for a variety of different business and IT domains across multiple industries typically explain that customer experience has moved to center stage; digital value has increasing importance in an information society and an information economy; and better use of things like real estate, intellectual property, available inventory, skilled personnel, and digital assets has become mandatory to manage costs and create new revenue streams. Managing and reducing costs in a continuously changing business and IT environment remains a key driver for functional departments in many firms.
The same business executives see a need to deliver necessary high-quality business functionality faster in order to remain competitive and increase market share (or at least mindshare). They do not necessarily care about whether this functionality comes “out of the cloud,” off the shelf from an on-premises business application vendor, or from internal development resources. And more often than not, rapidly changing business cycles do not allow for any longer-term planning that would ease rapid delivery. Traditional incremental approaches to business applications won’t get the job done anymore. Business application packages like banking platforms, HR, and retail packages often have a useful life of more than a decade but are subject to obsolescence risks — especially if the applications become highly customized and are not upgraded regularly. Forrester regularly encounters firms that are finding that their traditional strategies for managing their portfolios of business applications no longer work due to pressure from accelerating business and technology change.
The key questions are how do you deliver business applications more successfully and how do you manage substantial investments in business applications while fostering business innovation in an increasingly complex world? Forrester has designed the Business Applications Playbook to help answer these key questions. Application Development and Delivery Professionals will find the playbook to be a practical guide to our research findings, forecasts, and recommendations, structured in modules around the various business application delivery phases. The business applications playbook starts with an executive overview. As with all Forrester playbooks, our practical business application analysis and guidance is broken down into four categories:
- Discover. This is where you can learn about how future business applications will help increase business flexibility and value by embracing future trends such as cloud, mobile, social collaboration, and elastic computing/big data. You can also see how following the “buy plus build” paradigm helps you move away from the rigid and deterministic “buy or build” pattern. Selected perspectives — such as the future of business applications in verticals like banking and retail and horizontal capabilities like human resources — provide additional insight. If you have determined where you want to go, you should measure the business impact of an improved application strategy. The playbook will also help you do things like assess your readiness to transform your application strategy and gain insight into business drivers and the future shape of selected industries.
- Plan. Here you will learn how advanced companies assess and envision their application portfolio. The plan phase of our framework starts by helping you identify or develop the key business drivers for your application strategy and investments, including a framework for measuring the ROI of these app initiatives. You should first ground your application strategy in your key business imperatives to continue with optimizing long-term application effectiveness and value. After you have done this, you’re in a good position to define the road map for transforming your application landscape. This is also where Forrester highlights important case studies for successful application deployments as well as examples of where such initiatives fall short — and why.
- Act. To put your plans and strategies to work, you must employ the right people in the right organization, work to optimize your business processes, and select the right technology. You should start by organizing to deliver and manage application transformation. Then you are in a good position to work on optimizing business process, if and when necessary, and governing transformation. The phase also provides a framework for selecting and acquiring business applications software and related services. If you need to select a packaged or off-the-shelf solution, we provide a methodology built from our hands-on engagement in dozens of application vendor selection projects. In addition, clients leverage our Forrester Wave™ research, which provides a detailed evaluation process to rank software solutions or service providers within a peer group.
- Optimize. The final piece of the puzzle is ensuring successful outcomes by managing and measuring the effectiveness of the applications, from adoption levels to value realization. Managing the performance of your business application transformation, business results, and application value are key ingredients of ensuring a successful transformation. However, the transformation journey should not come to a sudden halt: Continuous improvement is crucial to protect the transformation value and investment, so you will also need to manage business change to maximize adoption and success.
Beneath these core reports you will find a wealth of additional toolkit research, including Forrester Waves, case studies, vendor landscapes, vendor and market analyses, trends reports, and focused surveys that will help you plan business application change and guide your investment decisions. This research comes from the analysts of the application development & delivery team, as well as other role teams — and we are all here to ensure that your strategy is the best it can be.
Where should you start? I recommend looking at the future of business applications first. If you feel that your application landscape needs transformation, you should assess your transformation maturity using a soon-to-be-published report. Then choose the reports and other tools and materials from the four categories that best meet your needs. For a more hands-on approach to transformation success — with topics from preparing and planning transformation to vendor selection — use Forrester Consulting’s full-day and two-day workshops aligned with each phase of business application investment.
Independent of how you leverage the business applications playbook, just remember: Technology provides the seeds of innovation and even disruption, but the drive to innovate or to disrupt must come from what the business needs to accomplish to compete and win in a complex and changing environment.
As always, let me know what you think: JHoppermann@Forrester.com