Auerbach Publications © 2009
Chapter 4 - Acquisition and Measurement
Many Happy Returns
It is essential for organizations to assess the financial impact of the investment in a new form of technology. This can be best achieved through evaluation of the total cost of ownership (TCO) and the returns on investment (ROI). This can be achieved through simple calculations, payback data and economic value analysis. The lack of a proper quantification method can lead to tremendous losses.
Concepts to Clusters: The Real Technology Chasm
Investment in appropriate forms of technology can yield tremendous success for any company. Since constant evolution of technology enhances its quality and overall service delivery, it is imperative for organizations to invest in the final version of a product. There is a huge performance difference between a prototype and a cluster. Organizations should make occasional considerations on prototypes but should invest in the final product to avoid losses due to poor service delivery.
Vendors, Vendors Everywhere Who’s the Fairest of Them All?
The impact of vendors in the success of any corporate establishment that relies on the effectiveness of technology is essential. Instead of perceiving vendors as necessary evils or adversaries, it is imperative to regard them as allies since their partnerships are invaluable. The long term impact of software and hardware investments via vendors is proficient since the constantly evolving technology makes the acquisition of software inevitable.
Three Reasons More Outsourcing Is Inevitable
Software and service outsourcing will most likely rise over the years due to multiple reasons. For starters, the number of software development and computer engineering organizations has fallen over the years. Additionally, commoditization and standardization of software makes it easier to work through these alternatives. Finally, the end of corporate computing makes it more feasible to invest in a third party software rather than engaging in the software development life cycle. As such, outsourcing will not come to an end any time soon.
Squeezing Willing—and Not-So-Willing—Vendors
Over reliance of software vendors lead organizations into spending a lot of money on sub-standard services. If organizations are willing to spend millions in contract with software distributors, the quality of service should encompass shared risks with the vendors, subsidized pilots, R&D partnerships and greater prioritizations. As such, the need for enterprise software has led to the exploitation of enterprises by vendors since the services offered do not reflect the amount of investment made.
Guerilla Budgeting
Conservative budgeting is essential in the prevention of impulsive investments. Organization utilizing technology can make the most out of their money through concealment of their investments from the CFOs and engaging in productive ventures with the vendors. Additionally, the creation of incentives for employees and making the most out of the acquired pieces of technology can make organizations utilize their finances proficiently thus preventing non-anticipated losses.
Dissenting Opinions about Outsourcing
Outsourcing is an influential alternative in the maintenance of lower investment costs and higher returns. It is the most prudent investment initiative in the concurrent corporate society as opposed to hardware purchase and software development. It enables an organization to specialize in specific activities without needing to make large investments on the acquisition of new technology. Finally, it is a proper financial management tool due to the growth of outsourcing service agencies.
Selling Tough Projects
Engaging in productive projects with the involvement of technology is very technical. Individuals need to assess the nature of the corporate activity, the values upheld through the indulgence in the venture and the how good their technology can handle the requirements of the project. When these measures are considered, final cost evaluations should be done to ascertain the feasibility of the venture. It is imperative for the organizers to assess the risks and account for the performance of their initiative to avoid unnecessary flaws in the overall returns.
What’s Your Core IT Competency? Really?
Outsourcing has become a common alternative for most organizations over the years. It is commonly perceived as a means of saving costs and avoiding risks. However, there are more multiple advantages associated with the acquisition of goods and hiring of staff members. However, it is essential to assess an organization’s core competencies and realistic sourcing options before engaging in any decision involving the purchase of technology equipment or hiring of large staff.
Who Pays for All This Stuff?
Who’s Measuring All This Stuff?
Organization need to inventory their technology assets to aid in the tracking of financial expenditures. Aside from the costs incurred through the purchase and maintenance of hardware, it is essential to assess the expenses incurred in software and personnel management. In this practice, benchmarking of the findings of your organization with other similar positioned firms can aid in establishing the credibility of the conclusions made. Quantification of organizational expenditure is essential as it aids in the development of an organization.
Security Solutions Outsourcing: It’s Time
The development of eBusinesses augments the need to employ proper security measures in the maintenance of databases and authentication methods. The costs of incorporating these practices is undoubtedly costly. As such, organizations need to make use of the most convenient practice, outsourcing. Instead of worrying about the development of software, it is more advisable to find a competent vendor and engage in a productive outsourcing venture.
Project Management—Yes, Again
The possibilities of companies breaking even through the utilization of technology is heightened by the qualifications of the project manager. Influential project managers should have the ability to spot, enact, and withdraw from non-productive ventures. It is imperative for any organization’s management to review the requirements of a project before indulging in it since setting unattainable goals could demoralize the stability of the organization.
What to Do? Triangulating on Requirements
Organizations fail by utilizing a common methodology to assess their business and technology needs. However, for optimal success, it is imperative to dedicate a proper management methodology in the evaluation of technology needs. Conducting a requirements management case study is a rational approach in the maintenance of the company’s success rate. As such, it is important to define the company’s requirements and to specify a management strategy to oversee the process.
Sourcing the Sources: Who Does What Today? Who Wins Tomorrow?
The current technology trends have eliminated the need to own particular staff members or commodities. Essential skills such as programming and communication are constantly being outsourced. The future of the technological departments will see a decline in the number of personnel employed in an organization. The war over the control of technology equipment has become more severe and the outcome is somewhat clear. The future of ownership of equipment and staff members will be overridden by the emerging outsourcing trends.
Strategy, Applications, and Architecture Sourcing: Where There Are Still Competitive Advantages
Companies need to maintain the pace of the trends in the market to sustain themselves. As such, they should be vigilant of the acquisition strategies, the outsourcing trends, and the education training gaps. The exploitation of these fields give companies a competitive advantage over organizations that do not make the most out of these provisions. Consequently, companies should have dynamic management strategies.
Advanced Vendor Management: A Graduate Course in the Optimization of Vendor Relationships
Company partnerships with vendors have a large impact on performance. Consequently, organizations should evaluate the short and long term impacts of a common venture with specific vendors. If the returns yielded from the investments do not reflect the goals of the organization. The company should consider disassociating itself from the partnership before irreparable harm is done.
Project Management Rigor (or Rigor Mortis)
Indulgence in non-productive projects has negative effects on the productivity of a company. As a result, it is imperative for organizations to master project disciplines before getting involved in any investment. Specific procedures should be utilized in the management of a project aside from the conventional approaches taken. Lack thereof jeopardizes a company’s success possibilities.
What are your biggest takeaways from this chapter?
I have appreciated the role of proper planning in technological investments. Precisely, it is essential for the management of an organization to assess the effectiveness of investing in a finished product rather than a prototype. Similarly, consideration of outsourcing services should be factored in an investment before considering to purchase a software or hardware and hiring staff members. Finally, the essence of influential project management has been a key lesson from this chapter. Overall, I have internalized a lot of content from this reading.
