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 EduInfo - News Letter
  Does IT investment matter, what’s the complication?
The selection of a core enterprise application is a challenge faced by large multinational corporate to dominant players in educational domain alike. Due to nature of the investment involved, the implications to the core business operation, change required to the human resource element to adopt are serious strategic consideration of the organizations. The changing rules of the game and the basis for competitive advantage are compelling reasons as to why an organization needs to revisit their information technology strategies. The impact of this strategy would not only be within the organization but also would extend to impact the other stakeholder groups such as a clients, partner network; ultimately resulting in realignment of the competitive equilibrium with the competitors. Organization have succeeded and failed, in this venture. The stunning statistic of over 48% of the enterprise level project failing and 26% of the project being challenged make such decisions in the area of high risk. Many organizations go through a painstaking process of planning such decision but do miss out some critical components in this process, due to time pressure, budget pressure and change resistance pressure. We have made an attempt to aid you with some key decision point in the selection process of enterprise level application; and by no means claim to be complete.
 
  Do we require a best of breed application or an enterprise application?
What business are we in and what is our competitive strategies would direct an organization to choose a direction. The system and structure should follow the organizations overall strategy, understanding of this strategic direction would provide the organization with the answers as to the extent to which the organization is willing to change its business process to comply with an enterprise level application which will require standardization. The fundamental mistake an organization may make is to change its business process that would contradict with the organizations overall strategic direction. If the organization is pursuing a differentiation strategy selecting an enterprise application may not be the most appropriate decision as this strategic posture may require a higher degree of customization in maintaining this position.
 
  What exactly do we need?

This needs to be specifically identified from a business perspective, the means to achieve and the ultimate business benefit should be put forward by the management team. A bottom up approach is the most appropriate in identifying the said requirement. Most organizations make the lethal mistake of considering this to be the IT team’s responsibility. The expected benefits need to be detailed sufficiently and measurable KPI’s should be assigned.

Product technology should be evaluated in consultation with the CIO, or a technology consultant. The continuity of the technology availability of resource personnel are not to be ignored. The following key points should be looked into.

  • Architecture & technological environment
  • Usability and administration
  • Platform and database support
  • Application standards support
  • Communications and protocol support
  • Integration capability

Under the financial feasibility the product cost should be evaluated in detail. If the organisation is expected to achieve an ROI within a certain period then the cost of ownership until such time should be considered in the evaluation process. This commitment could then be incorporated in the contract with the supplier. A guild line of the possible cost brake down is listed below.

  • Software cost
  • Implementation cost
  • Training cost
  • Maintenance fees
  • Upgrade fees
  • Service and support
  • Hidden costs if any

Having a cost commitment for the period within which the organisation intend to have its ROI achieved would immensely assist the organisation from the vendor surprising the organisation with hidden cost items, scalability limitation etc. We will cover the aspects of recommended selection process of a suitable vendor, and the related areas in our next issue.

 
 
“The stunning statistic of over 48% of the enterprise level project failing and 26% of the project being challenged make such decisions in the area of high risk.”