by Michael Schrage

Realizing the True Value of Your Software Applications

Apr 15, 20066 mins
Enterprise ApplicationsIT Leadership

Success can be a trickster; be wary. While I was moderating a customer advisory board workshop for the software division of a giant technology company, a disturbing observation dawned on everyone in our poorly air-conditioned conference room: The software we were all there to improve could do much more than even its most loyal users dreamed of, yet that extra capability was almost never tapped.

The division’s leadership heard story after story of how their software did a terrific job of solving one problem, yet was never considered as a possible solution for any other business problem. Somehow, the software’s early success had branded it a useful “point solution” rather than an innovative platform for an array of apps. For example, while the software was superb for both mass and custom distribution of e-mails and PDFs, it could also handle global distribution of richer media formats—streaming, for instance. But clients were not even aware of the greater capability. In fact, this server software, with minor modifications, was explicitly designed to deal with the bulk of the business and technical issues its users had deemed critical.

Why did early success blunt enhanced adoption? Communication was part of the problem. People just didn’t see the links between digital formats, and the vendor didn’t know enough about its customers’ specific business needs to point out how the software could address them. While it was true the software would have to be tweaked to custom-support specific needs, the vendor actually had tools that made customization cheap and easy. But again, the customers didn’t understand what was available.

Bottom line? The software was a victim of its early success. The customers clearly liked it—why else join the advisory board?—but the package was woefully undervalued and underutilized. The point solution perception actually undermined its potential as an enterprise business process platform. Oh, the irony! The software had been unfairly “niched.”

At a major software company’s CIO conference barely a month later, it was d¿ vu all over again. Fortune 1000 IT leaders took turns telling their host’s senior management that the vendor’s enterprise software was underutilized. Business process owners and line executives inside their companies kept looking for alternate software solutions to business needs when the vendor’s existing software could accomplish most everything required—and more.

“You need to make it easier for us to utilize all the software we license from you,” one CIO told the vendor hosting the conference. “Otherwise, our people are just going to go out and buy the software they think they need from someone else.”

Indeed, the common theme of these vignettes turns out to be a problem throughout enterprise computing. Organizations in general—and IT in particular—are underachievers in extracting full value from the systems they acquire and deploy. They’re too satisfied with initial success. For confirmation, you have to look only as far as your own desktop. The overwhelming majority of people use a fraction of the power and potential of, say, Microsoft Office or Google. Survey after survey reveals that managers typically use less than 15 percent of the functionality of PowerPoint or Excel. A recent IT survey by a Fortune 50 company showed that not even 10 percent of the employees over the age of 35 used the corporate e-mail filtering function.

How Vendors Discourage Experimentation

Now ask yourself, What portion of our “application backlogs” are a function not of unwritten code but of unused or undeployed software features and functionality that are simply unknown or untaught to users? My bet? At least half, probably more.

Why do I so confidently assert this? Because I’ve seen it with my own eyes. Fifteen years ago, everyone in the industry joked about the unfulfilled promises of overhyped “vaporware.” Today, there is not a major enterprise software package—or a desktop app (Web-based or not)—that doesn’t have far more features and functionality than 75 percent of its users need. Are there vendors who fail to deliver? Of course, and there always will be. But the reality is, for most organizations, a greater variety of “off-the-shelf” choices with more built-in functionality exists than ever before.

Yes, there will always be circumstances that require workarounds and custom-coding and special subroutines and so on. However, too many IT groups (and their internal customers) haven’t thought through how they can tap existing software portfolios to better meet business needs.

Now I’m the first to acknowledge that many vendors—you know who they are, they know who they are—have stupid, counterproductive licensing policies that discourage willing customers from getting greater value. Shame on them! But when you look at the rate of open-source evolution and how once-simple servers that handle transactions are becoming more multidimensional, savvy CIOs have to ask: How well do we really know what our software and systems are capable of doing if we’re really prepared to be clever about them? Are we adequately building on success?

CIOs need to audit the early wins and encourage people to use them as springboards. The implementation challenge shifts when we think less about reaching for something “new” to solve problems than rethinking how we should tap what we possess. Yes, many vendors do a lousy job of documenting or explaining their offerings. And sometimes it’s easier to look for another point solution to solve a new problem.

But if we’ve already learned to run a package that cost-effectively delivers the goods, why not build on it if the price is right? Building on the right experiences is better economics than acquiring novelties that will inevitably pose their own unique challenges anyway.

Sitting in that airless room with a genuinely committed vendor and genuinely committed customers reinforced a simple but hard-won truth: Build on what works, and treat early success as an invitation to innovate—not as a sign that the problem has been solved. Vendors need to push their sales and support people to explain how usage can evolve over time, not just how best to solve the problem du jour. And CIOs need to do a better job of reaching out to their business units and working with them to help identify the features and functionality they need, and then unlock those features from the software they already own or lease.

The true test of our stewardship is not just how well software is used but whether we’re getting the full value that we should. That’s not just a technology leadership test; it’s a business leadership challenge.