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3 Costly IT Mistakes That Undermine Business Value

You are most likely making 3 big mistakes that are costing your company a lot of money and undermining IT's value to the organization. I can make that claim because several of my colleagues have been conducting Business Value Assessments (BVAs) in very large multi-national companies and have been finding that all the companies they've assessed are making the same types of mistakes. By looking at your IT infrastructure as a platform of interconnected and interdependent services, you can identify and correct these problems and avoid them when you deploy technology in the future.

In this blog and the accompanying podcast interview with Eric Zinn (an enterprise solutions strategist at Advaiya, Inc.), I'll discuss 3 of the most common mistakes: failing to get full value out of support agreements with vendors (including Microsoft), failing to realize that the company is using multiple redundant solutions for the same problem, and failing to motivate users to actually adopt the solutions that IT deploys.

  1. Leveraging Enterprise Agreements (EAs): In our podcast interview, Eric discusses an example of a company that was wasting a huge amount of time rebuilding desktops because IT didn't realize that the company's EA would allow them to take advantage of free consulting time and imaging. In another example, Advaiya BVA consultant Skip Purdy tells of a company that had been buying software piecemeal. By doing so, this company had built up enough individual pieces of software that they could have received a considerable discount if they had used their EA for the purchases. Skip concludes that the fault often lies with Microsoft for having a hard time expressing the financial value of the EA in terms of cost and investment. Many companies don't consider that in the first 3-year cycle of their EA, they are paying for the license plus their Service Agreement (SA). However, in the second 3-year cycle, companies are paying just for the SA cost (maintenance). The result of not considering these cycles is that companies don't amortize their EA over 6 years.
  2. Redundant Solutions: The example of using redundant solutions that Eric points out in the podcast is that business units often purchase their own business intelligence (BI) solutions without going through IT. But the issue of redundancy is a major theme that runs through all of our BVA engagements. Redundancy makes it nearly impossible to track IT costs throughout an organization because IT is often unaware of all the solutions implemented in business units. Among the other redundant solutions, the BVAs found numerous web conferencing solutions and IM solutions. But most significantly in my opinion, these engagements found huge redundancy in directories. Kris Honkola (a senior enterprise solutions strategist with Advaiya) noted that among the companies participating in BVAs, no company had fewer than 18 different directories! Imagine the cost of supporting all those directories!
  3. Adoption versus Deployment: "If you build it, they will come" might work for a baseball diamond in a cornfield, but it certainly doesn't apply to applications in business organizations. As Eric and I discuss in the podcast, deploying an application that users won't use can be very expensive. In his blog ("Platform Perspective: Adoption vs. Deployment"), Rich Gleeson (director of Advaiya's IT and TDM strategy) tells the story of a company that deployed InfoPath only to find that nobody was using it. Only by integrating InfoPath with the workflow for expense reporting did the company finally drive adoption of InfoPath and ensure that their investment was bringing value to the business.

These are just a few examples of the recurring themes that are coming out of the BVAs. These points probably don’t surprise you, and I’ll bet most people reading this blog know that these issues exist in their IT organizations. But the impact of these issues can be huge. By addressing these themes, the companies that were evaluated are saving millions of dollars.

Am I wrong with my bet? Has your organization found a way to overcome problems with leveraging EAs, redundant solutions, and deployment versus adoption? If you have, please let me know. If you haven’t, please let me know. Email me at [email protected].

Podcast: 3 Costly IT Mistakes That Undermine Business Value

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