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Organisations Can Maximize Value By Working Under-Utilised Enterprise Applications Harder

London, 14 July, 2009 - When capital is in short supply the pressure to optimize existing resources and assets intensifies. In the IT space, enterprise applications such as enterprise resource planning (ERP) and customer relationship management (CRM) are prime targets. A new report by Europe's leading IT research and advisory organization Butler Group, points to the strategic importance of these applications in terms of running businesses efficiently and effectively, and how changes in the way they are architected, delivered, and used are altering the entire application value proposition and lifecycle. Titled "Evolving Enterprise Applications", the report says there is a tendency to focus on cutting costs. It argues that cost reduction and value generation are two sides of the same bottom line so should be tackled together as part of a unified strategy with savings in one area being used to fund smart investments in another.

"Cost cutting is a natural reaction to a tough economic climate, so is freezing budgets and halting additional expenditure, but these actions can be counterproductive if they are carried out in a siloed fashion with little attention paid to long term and strategic implications," says Angela Eager, Senior Research Analyst at Butler Group and the report's lead author. "Challenging times are times of change, but change also brings opportunity and that means taking a fresh view of what is being done, why, and how, and being prepared to adapt both business operations and applications."

Organizations need to start viewing enterprise applications as enablers of change, not static back-office transaction engines

"Enterprise applications form part of the DNA of an organization and are core to its ability to do business but that integral status means they are often overlooked. They impact so many areas of the business that they become almost invisible. As a result when it comes to developing value-generating initiatives they are back of mind, yet no new initiative can be fully effective if the core it relies on is not tuned," says Eager. "Organizations will benefit from a change in perspective in which enterprise applications are perceived as fundamental enablers of change, with the capacity to adapt to new business demands and add further dimensions to new technologies, rather than as static back office transaction engines."      

Technology changes such as the move to service oriented architecture (SOA) that brings modularity and therefore technical and business agility, increased use of business process management (BPM) capabilities to enable enterprise-wide process standardization, embedded business intelligence (BI) for actionable insight, and participatory Web 2.0-type technologies for collaboration and real time interaction, all play a part in opening enterprise applications up, changing the way they are used, and enabling them to be used for more. Each technology would be so much less without the enterprise application DNA structure. However, for this transformation to be effective, closer alignment between business and IT is a prerequisite.       

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