Striking the Right Application Portfolio Balance

Depending on the state of the economy, IT organizations usually find themselves vacillating between two extremes when it comes to applications.

When times get tough, there is usually a clarion call to reduce technology-related costs by rationalizing the number of applications supported by IT. That rationalization process tends to favor larger vendors with huge portfolios of applications, because IT leaders usually want to reduce the number of vendors they do business with in order to save money on administrative overhead.

While the economic pendulum in recent years has swung towards application rationalization, the improving economy has led many organizations to rediscover the value of smaller application software vendors that give them access to innovative applications. Larger vendors often can’t compete with those smaller firms in a timely manner.

In addition, IT organizations are now discovering that cloud computing not only reduces the amount of time it takes to deploy an application, it can give them more control over the application environment.

Case in point is Plymouth Rock Energy, a provider of electricity and natural gas services, which worked with Bluewolf Consulting to build a custom ERP application environment on top of the Force.com cloud computing platform created by Salesforce.com.

According to Plymouth Rock Energy CIO Jonathan Adlerstein, combining the company’s own applications with third-party applications such as accounting software from FinancialForce.com (delivered via the cloud) allows the company to create an application environment that is specifically tuned to its requirements.

After evaluating various options over eight months, it became apparent to Adlerstein that Plymouth Rock Energy could really accomplish all its goals working off a single cloud-computing platform. “We now have something in place that is specifically tuned for our industry,“ he said. “This way we get control over the design of the user interfaces in a way that we can customize.”

For a similar set of reasons, Varsity Publications, a publisher of program guides for events, opted to go with SugarCRM for its Customer Relationship Management (CRM) application. According to Varsity Publications CEO James Porter, the customization capabilities of SugarCRM allowed his organization to build a unique workflow that ultimately makes it a more cost-efficient competitor.

“Canned solutions don’t let you do what you have in mind,” Porter said. “In this day and age, you need to have autonomy over the way you do things in order to compete.”

In addition to being attracted to the cost-savings associated with an open-source application, another major factor in Porter’s decision was the ease of finding a PHP developer to customize the environment—a far easier process than if he’d had to hire a developer who was familiar with a rival CRM application.

Beyond giving organizations more control over the application environment, smaller application vendors tend to deliver innovative new approaches faster than larger rivals.

Amdocs, a provider of network control technologies, recently opted to deploy a new Perforce Commons document management system from Perforce Software which is not only significantly less expensive than traditional desktop management system, it’s a lot easier to use.

“We don’t really consider vendor size when it comes to product selection,” said Bruce Painter, a software engineering manager at Amdocs. “It’s a lot more about finding the application that best fits the needs of our users.”

Functionality was also one of the main reasons that Southern States Cooperative, an agricultural cooperative, decided to go with analytic applications from Alteryx: it gave them access to advanced predictive analytics capabilities in a way that was much more accessible to their end users.

“What we really liked about Alteryx was the learning curve wasn’t all that steep,” said Greg Bucko, manager of customer insights at Southern States Cooperative. “We could bring in a creative thinker and get them up to speed much faster.”

In addition to breaking the company’s addiction to spreadsheets that are difficult to collectively analyze, Alteryx eliminated the need to find data analysts who were specifically trained to use a predictive analytics application.

Bucko added that smaller vendors such as Alteryx generally provide superior levels of customer service.

“We’ve had some dealing with larger vendors that definitely left a bad taste in our mouths,” he said.

It was for similar reasons that Smart Media Group, which buys advertising time on television networks on behalf of political candidates, decided to go with Tableau Software, a provider of visualization and analytics application software delivered as a service, to clean up its reporting processes.

“We had a lot of data that was stored on a lot different hard drives and we’re struggling to collect all that data in one place,” said Sarah Stone, a research analyst with Smart Media Group. “Now we can interact with that data at any time.”

Larger vendors would not only have needed longer to deploy a similar solution, she added, but the process of acquiring software from one would have been intimidating.

Whether through the use of open-source or free trial versions, the accessibility of application software over the Internet is leveling the playing field between application vendors—regardless of their respective size. Not only is it easier for customers to discover new applications, but they appreciate the frictionless nature of downloading and testing applications without necessarily having to engage a salesperson.

Even so, while it may be easier than ever to acquire application software, that shouldn’t prevent organizations from getting rid of applications they no longer use.

“Best practice when it comes to managing applications is to consistently apply rationalization versus trying to do it once every seven years,” said Stefan Deutscher, a principal at The Boston Consulting Group. “You need to have a formal approach to managing the zoo you have in a way that allows you to cull out the more exotic animals.”

But Deutscher adds that organizations should still embrace new applications that add value to the business: “Application rationalization is a challenging topic… From an innovation and flexibility perspective you always need to keep in mind the perceived needs of the business side of the organization.”

 

Image: Kumer Oksana/Shutterstock.com

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