We’ve coined a new measurement of IT value. While ROI continues to be an important way to measure value from products and services, whether through cost savings or productivity increases – we’re telling companies that they can get even more from their products and services, which isn’t captured by the term ROI. So we’ve coined a term we’re calling Return on Sunk Investment (ROSI).
By this we are referring to the increased value which can be derived from existing or legacy systems by implementing a new system. Companies should now ask of any new technology and system vendor whether the systems they implement will deliver not only ROI, but also whether it will contribute to the ROI of existing systems, and previous investments. This can be a tough ask in many cases.
So to clarify, ROSI begs the question – will the new product or service help deliver returns on sunk investments – those systems purchased and implemented years ago? Can this new system help our old systems to address new business initiatives, and help our organisation to grow?
Integration is a key way to deliver returns on sunk investments
Integration can help businesses unify and integrate back-end data stores to turn them into knowledge. They enable businesses to synch up and harmonise their sunk investments to make the information more accessible and meaningful without the need to replace old technology.
Integration also helps mitigates risk. Ripping out old technology to replace it with new can be costly and risky, and therefore unpopular with shareholders, the Board and staff. It will provide a virtual view over all databases, old as well as new – a compelling argument for anyone looking at maximising and improving business processes and generating ROSI.
Implementing integration technology makes information available in a way it wasn’t before, and to a greater number of people. In addition, better automation can take place because of more efficient workflow between systems. The benefits of this are huge – operational efficiency and economies of scale, more transparent business processes, and real-time business intelligence.
Be aware that IT integration can also pose some risks
Companies often don’t consider that IT integration can drive a culture change in the organisation. As departments and business silos are brought together to work in more integrated ways, it may be important to have a change management programme in place. At the very least there needs to be some preparation made for the softer issues involved.
Access and security can also become an issue. It is imperative to ensure that software pulling the data together has the capability to limit and direct access – who, when and where.
A typical example is an HR database – the business needs to ensure that the HR and finance director can access information on salaries, but not the sales team – but that everyone can access sales teams’ biographies. A resilient, built-in security component should be factored into the solution.
4 ways IT integration can help deliver ROSI
1. You’ll know what your sunk investments are
Typically, a business will already have a number of disparate databases and information sources in place – for example an ERP system, a CRM solution, and a HR and payroll function. Some of these may depend on others. However they are disparate – the data and information contained within may not be integrated and can’t be used to generate holistic knowledge on the organisation or its clients.
Some systems may even be forgotten – maybe if another system supersedes or replaces it. New systems may depend on old databases. It is very important to uncover all the systems in use, as well as identify any dependencies between them.
2. You’ll develop an understanding of what every system is for
This may sound really obvious – but IT departments sometimes miss the nuances of the value a system brings to an organisation. Some systems may be dormant, bringing no obvious value, or require input and maintenance but have outlived their usefulness – and if removed could cause chaos in other essential systems. By integrating rather than removing them, data will be retained within the organisation, and there will be no impact on key metrics such as customer satisfaction.
3. You could remove the need for new systems and databases
When going through this exercise, it is important to find out about any new systems which may have been requested, or are being investigated. Integration could give an old system or set of systems new functionality which is required within the company.
4. Working with an integration partner can bring unexpected added benefits
The purpose of integration is to reduce business complexity. However in the process of integrating, some solutions can add their own complexity. It is therefore important to study the benefits and complexities of all the solutions rather than being won over by the lure of the brands or technologies which have the slickest marketing campaigns.
Whether looking at migrating or implementing an Enterprise Service Bus for the first time, or squeezing more value from an existing ESB – both routes will require advice and best practice from experienced professionals to get maximum ROSI.
Start the journey to deliver ROSI
At Integrella we work with our clients to get a deep understanding of their existing systems and databases, and then propose the best options to them. We partner with some of the key players in the integration market, and are in a position to recommend the best solutions to suit customer requirements.
We believe in working with our customer as trusted partners. We develop proof of concepts and demonstrate the approaches available before helping them build their business case. We help identify areas where it is most likely they can deliver returns on their sunk investments – a skill we have developed over many years in the integration business. We focus on providing continuous improvements in performance, productivity and operational efficiency, in line with company strategic goals and business processes.
Working with Integrella to help you deliver maximum returns on sunk investments should set you up to surf the Brexit Tsunami.
If you’re in the process of selecting an ESB for your company – do you think you have what it takes to go it alone? Check out our whitepaper on the topic.