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					Enterprise
Applications:
Maximizing Their Value, Maintaining
and Measuring Their Worth




Executive Summary

The directive to ‘do more with less’ is certainly not new to IT, yet the pressure to meet that
demand is stronger than ever. As a result, companies are rethinking their application strategies
and renewing their efforts to drive more value from their enterprise applications – including
solutions for eCommerce, enterprise resource planning (ERP), messaging and collaboration.

This paper discusses how the right service provider can help businesses maximize, maintain and
measure application value from the start and over the long term – to increase their worth to the
enterprise while supporting cost-efficient business growth.
Enterprise Applications: Maximizing Their Value, Maintaining and Measuring Their Worth ______________________________________________________ 2




After a time of great economic uncertainty, cautious spending and a        This sophisticated level of expertise is expensive to maintain in-house,
‘wait and see’ philosophy towards starting any new IT project, 2011        yet it is required for getting the most from each application and new
is opening with resurgence in business activity. As companies began        capability. Adopting the new capabilities within these ERP applications,
to focus once again on business growth, IT organizations faced the         and taking full advantage of existing capabilities, can be critical to
year with a long list of pent-up demands and many are still awaiting       supporting business recovery and new growth.
attention.

During the period of economic downturn, many companies put
application upgrades on hold and delayed the adoption of the new
                                                                           As application capabilities expand, application
capabilities offered by new software releases. This created a backlog      complexity grows.
of IT projects, compounded by IT demands related to acquisitions,
divestures, industry regulations and other events.

To handle this backlog, many senior IT executives are reviewing their      eCommerce Applications
overall approach to delivering applications to the enterprise. Having      Since a successful web presence is never static, eCommerce
become very adept at managing tighter budgets during leaner times,         applications are in a constant state of change, especially in the
they’re being tasked with applying the lessons learned to support cost-    business-to-consumer (B2C) and business-to-business (B2B) spaces.
efficient business growth as they move forward.                            The cost overhead involved in keeping up with those changes is hard
                                                                           to bear, and most internal teams are not funded or designed to move
At the same time, line-of-business managers, from finance and HR to        that quickly.
order processing and customer service, are looking to tap into the full
functionality of their applications to speed business process execution,   New capabilities, such as targeted content delivery, cross-channel
fuel revenue gains and create new business efficiencies. Yet, constantly   commerce and ‘freemium’ offers, are vital to attracting customers,
increasing application and infrastructure complexity, coupled with         increasing sales and building profitable relationships with business
limited on-staff resources, make that difficult.                           partners. To use these tools effectively, an organization must have the
                                                                           right applications and the right skill sets.
All these factors have been a tipping point towards establishing or
expanding relationships with IT service providers. As companies survey     ERP Applications
the vendor landscape, the following information can be helpful in          With ERP applications, it’s not just about adding new functionality; it’s
understanding why this can be a wise approach to meeting business          about getting more functionality from the applications running now.
and IT challenges and maximizing the value of enterprise applications      In fact, during conversations with top business executives, AT&T has
for renewed business growth.                                               learned that many believe they are only getting roughly 70 percent of
                                                                           the value they should be getting out of their ERP applications.

                                                                           Considering the millions of dollars already spent on licensing and the
  Current IT Challenges                                                    emphasis on cost efficiency, companies are hesitant to make additional
                                                                           investments in the staff needed to capture the remaining 30 percent of
   • Responding to a new surge in business activity                        benefits. That hesitation is warranted, since one ERP application may
                                                                           include 10-15 modules. Depending upon the scope of the solution,
   • Managing a backlog of upgrades and delayed IT projects
                                                                           separate skills may be required for each module, including both
   • Supporting cost-efficient business growth                             technology and business experts. As a result, companies can be stuck
                                                                           in the status quo, unable to benefit from that elusive 30 percent of
   • Rethinking enterprise application delivery strategies                 functionality or new application capabilities. Unfortunately, much of
                                                                           the higher-end value and efficiencies provided by these applications is
   • Gaining more functionality and ROI from
                                                                           contained in that 30 percent.
     enterprise applications

   • Dealing with increasing application complexity                        Messaging and Collaboration Applications
                                                                           While email alone is essential to running a business, its worth is often
   • Maximizing, maintaining and measuring application value               seen as a given – certainly critical to making the business run, but not
                                                                           critical to making it run better. In response, companies are thinking
                                                                           beyond basic messaging to collaboration technologies, which was at
Reducing Complexity, Expanding Capabilities                                the forefront of new software initiatives in 2010.
Across the board, from eCommerce and ERP applications to messaging         The real value will come by elevating the conversation further, to
and collaboration solutions, enterprise applications are bringing new      unified communications. These solutions can integrate multiple forms
capabilities to businesses faster than they can adopt them. It’s a         of data, voice, and video communications, allowing distributed internal
double-edged sword for IT: As applications become more capable, they       teams and external partners to collaborate from wherever they are,
become more valuable to the business, but they also become more            using any device.
complicated as they demand more time, resources and expertise.
                                                                           The goal is to reduce process time for key business activities, but
Each enterprise application not only includes a complicated mix of         reaching that goal requires further investments in staff time and
specialized tools and technologies, each requires a highly specialized     resources. It also requires expertise that extends beyond stove-piped
skill set to configure, deploy, manage and upgrade the application,        messaging technologies to a comprehensive understanding of how
and there is often only a minimal amount of cross-over skills between      they can work together effectively.
solutions.
Enterprise Applications: Maximizing Their Value, Maintaining and Measuring Their Worth ______________________________________________________ 3




Recommendation                                                                              While these applications can deliver more value to the business than
Service providers can help companies adopt these new capabilities,                          any one application could, the cost of that added value can often be
without having to take on the financial burden of new staff resources.                      extended across the entire application ecosystem.

After implementing, managing, monitoring and supporting hundreds
of enterprise applications for customers, the right service provider
                                                                                            Applications are no longer isolated environments,
will know how to fully utilize and expand application functionality to
deliver the highest service levels and value.                                               they are part of a larger ecosystem of
                                                                                            complementary solutions.
There’s no need to engage multiple vendors for the specific application
expertise needed for different applications. In fact, there is a growing
trend towards consolidating vendor footprints – ‘right-sourcing’ to a
few strategic partners who have broad capabilities..                                        Recommendation
                                                                                            Choosing a service provider with a breadth of capabilities and services
Make certain that the provider’s expertise extends across the complete                      is key here. The more capabilities they can bring to the application
application lifecycle, from assessment, planning and deployment to                          and technology framework, the more holistically they can deal with
maintenance, upgrades and renewals. This capability can free internal                       the system, which can provide more value to end consumers within
staff to focus on more strategic IT projects in the queue. It can also                      the business. While some vendors are excellent at solving very specific
help create IT solutions that differentiate the business.                                   problems, a broader scope is needed today. The conversation shouldn’t
                                                                                            center on just one application, business process or requirement. Capable
Further, by managing the full application lifecycle, service providers                      providers should address the whole application ecosystem and, most
can reduce ramp-up time for projects and spot opportunities for                             importantly, the end business result the ecosystem should achieve.
improvement at any point in the cycle. With a more comprehensive
understanding of the application environment, they can also help                            Managing Complexity in the IT Stack
assess the relevance and potential value of new application functionality                   Like other components of the application ecosystem, the IT
and speed time-to-benefit for new capabilities the company chooses                          infrastructure has become more complex to manage, monitor
to adopt. Since IT solutions are never static and evolve with the needs                     and maintain. That complexity extends across every layer of the IT
of the business, a capable provider should be able and willing to                           stack – from data center servers, operating systems, databases and
facilitate this evolution.                                                                  middleware to the network and end-user device. In today’s IT world,
                                                                                            the technology involved in delivering a business process or experience
                                               Security                                     to an end user has become more capable and, therefore, it is often
                                  nning
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                                Application Lifecycle
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                                                                                            eCommerce and ERP Applications
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                   im                                                       n               Since IT is being viewed as a key enabler to rejuvenating business
                        i za                                       p   li a
                               tio n                          om                            growth, the stakes are high. For ERP applications, even a few seconds
                                       E n h a n ce m e n t C                               of downtime can disrupt critical business processes and productivity.
                                                                                            For eCommerce applications, where availability is so tightly coupled
By managing the complete application lifecycle, service providers                           with revenue, downtime can translate into lost sales and, possibly,
can reduce ramp-up time for new projects and speed the adoption                             lost customers.
of new application functionality.
                                                                                            For both applications, the underlying computing infrastructure must
                                                                                            deliver 24x7 service and respond to end users at the speed of the
Addressing The Application Ecosystem                                                        web. The dynamic nature of ERP and eCommerce applications also
The complexity of an enterprise application solution reaches well                           leaves the IT staff with the complex task of managing computing
beyond the core application itself: It extends into the ecosystem of                        resources that must adapt to fluctuating demands, which can
interrelated solutions that work together to support a business process                     change by the minute.
or deliver a user experience.
                                                                                            Messaging and Collaboration Applications
In today’s business world, application ecosystems can be highly                             As more internal and external teams use unified communications
complicated and integrated across a broad base of systems and                               solutions for collaboration, the demand on computing and networking
technologies. There are composite applications that can combine                             infrastructures will increase significantly. The IT staff must manage a
data from a variety of solutions – order and inventory data from SAP®                       complicated mix of data, voice, and video technologies and deliver the
ERP applications, customer data from Oracle® CRM applications,                              applications to a variety of endpoint devices and platforms. They must
supplier information from Ariba® or many other application across the                       also work to secure the infrastructure against threats that can be a
enterprise – into one solution that provides a net capability to the                        natural outgrowth of expanded collaboration.
business. This has long been the case in the eCommerce world, where
applications often ‘mash up’ content from multiple sources to create
more meaningful, highly interactive experiences for customers.
Enterprise Applications: Maximizing Their Value, Maintaining and Measuring Their Worth ______________________________________________________ 4




Further, they must now deal with the massive amounts of data                 Mapping is especially important for companies with unique business
these new capabilities can generate. As data becomes more highly             processes. Without identifying what those processes are upfront
centralized through the use of these systems, the IT team can face           and incorporating them into the application workflow, their unique
new issues around storage, retention and, most importantly, security.        competitive value may be lost.

The operational and staff requirements to maintain this high level of        Given the backlog of IT projects and the rush to move the application
performance, availability, agility and security are very demanding and       deployment cycle along, companies may sometimes make missteps in
expensive, especially for an IT organization focused on cost efficiency.     this time-consuming, yet crucial mapping process. It’s a fast track to
It can be a daunting task to be an expert at any one of these areas,         decreasing value: When the application fails to meet user requirements
yet the current business climate requires support teams to be experts        and the objectives of the business, it has only minimal worth to
in all of them.                                                              the company.

Recommendation                                                               Recommendations
Since they host and manage enterprise applications every day,                Engaging a service provider in the mapping process is the best way to
service providers know how to optimize every layer of the IT stack for       maximize application value right from the start or when companies are
improved application performance, availability, agility and security. They   re-engineering a business process for more efficiency.
can quickly implement eCommerce applications, run them reliably and
deal with constant, rapid change.                                            This should be a collaborative process, beginning with a full analysis of
                                                                             business requirements to define user needs and business objectives.
Using virtual compute power and storage to dynamically expand the            Functional requirements should be next, documenting and mapping
environment when the need arises, capable providers can manage               the steps involved in the business process – from closing the books
the seasonal spikes many eCommerce sites experience. These periods           to placing an online order – to ensure they align with the final
of peak activity can mean 15-20 times more traffic. In this space,           application workflow.
protecting customer information is paramount to winning trust and
business, so companies also need to make sure the service provider           In this top-down approach, this upfront work is completed by the
complies with the Payment Card Industry Security Standard (PCI/DSS).         service provider and approved by the customer before moving into
                                                                             technical requirements, the mix of foundational technology that will
In taking the service provider approach, organizations can redirect          drive the newly streamlined business process.
energies from managing technology components to strengthening
their brand and market position and creating richer, revenue-generating      Measuring Outcomes With Business-Based Metrics
online experiences for their customers.                                      At one time, the value of IT services were only judged by metrics
                                                                             around availability and performance, such as uptime or transaction
For IT organizations and line-of-business managers looking to unlock         speed. But those metrics provided no indication about whether an
more value from their ERP applications, a service provider can monitor,      actual business outcome was achieved.
manage and adapt the supporting infrastructure resources to remove
performance bottlenecks and enhance business process efficiency.
Service providers who manage hundreds of these applications are              Business-based SLAs clarify goals and hold the
very adept at maximizing their value for customers. They are also at
the forefront of product evolution and often work with ERP software
                                                                             service provider to a higher standard of service.
vendor teams to learn about new application capabilities in the beta
stages of development.
                                                                             Today, IT organizations are being measured by business-oriented
With unified communication applications running in a provider’s highly       metrics: Their ability to meet service level agreements (SLAs) around
secure data center and across a high-bandwidth network, employees,           specific business processes. Those SLAs can apply to a range of
partners and vendors can collaborate in new ways to increase                 business outcomes, from providing the systems to meet manufacturing
opportunities for business growth, without increasing the technology         quotas and get orders shipped, to closing financial statements or
burden on IT staffs.                                                         reducing user abandonment rates on web channels.
Consolidating infrastructure and application services with a single          In turn, companies looking to outsource IT services want to extend
provider can greatly reduce complexity. Economies of scale also apply:       those same metrics to service providers. They want business-based
Accomplishing more with a sole, strategic supplier can decrease              SLAs to incent providers and measure the value of the infrastructure
aggregate costs.                                                             and application services they deliver.

Aligning Applications with Business Goals                                    Recommendation
The goal of enterprise applications is to streamline and optimize            Companies should be aware that this outcome-based approach
business processes to drive revenue. But without documenting and             presents a paradigm shift for many service providers. They are being
mapping those processes into the application workflow, critical              asked to broaden their focus beyond the technology solution they
processes could be missed. Once the application is deployed, that            provide to focus on the business capability it delivers. This brings
could lead to lost orders, inaccurate financial reports or late paychecks.   higher levels of responsibility and accountability into the SLAs service
                                                                             providers typically write.

Map business processes to maximize application                               Yet, there are service providers who welcome business-based
value from the start.                                                        SLAs, because these SLAs crystallize what the customer is trying to
                                                                             accomplish. Armed with that input, the service provider can know the
                                                                             most relevant technology tools to apply. It also brings a deeper level
Enterprise Applications: Maximizing Their Value, Maintaining and Measuring Their Worth ______________________________________________________ 5




of collaboration to the relationship, as well as a higher level of trust as     With global collaboration capabilities, companies may need to tap into
service provider and customer work together towards a common goal.              extra compute capacity for special events, such as a web conference
Business-based SLAs epitomize the business value a service provider             announcing a product, process or capability to employees across the
can bring to a customer and should be a critical decision factor in             world. As teams become more geographically dispersed, these systems
vendor selection.                                                               will become as critical to business operations as traditional phone and
                                                                                mail service.
Upgrading Applications To Maintain Value
Now seen as a way to drive new business growth, the same upgrades               eCommerce Applications
that many companies put on hold during the economic crunch are                  Site traffic can increase by as much as 20 percent between May and
now a top priority. IT executives want to provide the business with the         December. Since online channels can generate well over 50 percent
added functionality of newer versions, but they know the upheaval               of their revenues in that period, even a few seconds of downtime can
upgrades can cause and how time-consuming they can be.                          have a tremendous financial impact. With cloud services, they wouldn’t
                                                                                have to pay for extra capacity during the slow season.
Since software vendors typically begin to phase out support for older
releases as time goes on, further delays may mean losing support                ERP Applications
for the version of software running and expensive time and materials            Cloud services can be used to support activities with heavy processing
charges for uncovered services. As business needs change over time,             loads that fall outside the realm of day-to-day tasks. For example,
older applications can also become out of sync with the business and,           closing the monthly books, processing payroll or supporting employee
therefore, less valuable. Basically, the longer upgrades are delayed, the       open enrolment for annual benefit updates.
more work there is to be done and the more cost prohibitive it can be.
                                                                                The choice of the ‘right’ service delivery option once again ties back
Recommendation                                                                  to the customer’s specific business need, as well as the application
The right service provider can simplify and speed even major application        and business function to be supported and any industry-specific
upgrades by applying best practice approaches, proven methodologies             regulations that need to be considered.
and lessons learned from managing many application upgrade projects.
                                                                                Recommendation. In the enterprise application space, many
                                                                                companies are using a mix of IT service delivery solutions to meet
                                                                                their needs. They may use cloud-based storage for archiving data, but
Blueprint, map and test to avoid the most common                                not for their primary repository. They may use cloud-based servers
upgrade pitfalls.                                                               to run a web and application layer, but not for a database. The point
                                                                                is, companies should think about cloud services as just one of the
                                                                                powerful tools in their IT services tool bag.
They start by creating a blueprint to clearly define and document
the project scope and schedule to keep it on track. That’s followed             However, the difficulty with this approach comes when businesses
by careful requirements gathering to help ensure the upgraded                   engage multiple vendors to deliver the mix of IT services. They become
application functionality maps to the needs of the business, then               a ‘traffic cop’ between service providers, left with the responsibility for
rigorous testing before bringing the application live. This process helps       tying all the outsourced services together into a cohesive solution for
to avoid many of the most common pitfalls of any application upgrade            the enterprise.
project. It also allows IT organizations to provide the business with
upgrades that are fine-tuned to deliver more value to the business.
                                                                                Think about cloud services as another powerful tool
When service providers are engaged for on-going application                     in the IT tool bag.
management, rather than one-off upgrade projects, they will already
have a keen insight into the company’s business strategies, processes
and environment, which can streamline upgrade cycles.
                                                                                A simpler strategy would be to work with a single provider offering a
Assessing the Cloud                                                             range of services, from co-location, hosting and cloud services to full
Today, there is a lot of confusion around various types of cloud                infrastructure and application management. A single-source provider
technologies and how they can be applied effectively to provide the             with a broad range of services is less likely to force fit a solution and
most business value to application environments.                                more able to provide a carefully blended mix of services to suit the
                                                                                business need at hand.
Certainly, the overarching benefit is flexibility, both in capacity and cost.
Cloud-based services offer pay-as-you-go, on-demand access to virtual           Maximizing Application Value with AT&T
servers and storage with elastic capacity that allows companies to              As a single-source provider for comprehensive application
dial the service up or down within minutes. This can be a great option          management, enterprise hosting and cloud services, AT&T can help
for quickly responding to changing business needs, unpredictable                companies reduce the cost and complexity of service delivery and find
demands and seasonal surges where extra server or storage capacity              the right combination of internal and external resources to accomplish
is critical to keeping business flowing and customers happy.                    business goals.

Messaging and Collaboration Applications                                        With more than 12 years of experience managing leading ERP,
While companies may consider cloud-based storage for archiving                  eCommerce, messaging and collaboration applications – and expertise
massive amounts of email files, these applications tend to stay fairly          across every major business function –AT&T knows how to optimize
static as far as the demand for compute capacity. This may change as            applications to maximize and maintain their value. Full application
businesses take advantage of unified communication solutions.                   lifecycle services free internal IT staffs to focus on strategic initiatives
Enterprise Applications: Maximizing Their Value, Maintaining and Measuring Their Worth ______________________________________________________ 6




for supporting new business growth, while easing the adoption of new                                  business processes, deal with rapid change and deliver highly
application capabilities.                                                                             responsive customer service.

The combined security, reliability and scalability of the AT&T global                                 With a strategic approach to solving both business and IT challenges
network and enterprise-class AT&T Internet Data Centers worldwide                                     – backed by business-based SLAs – AT&T can help companies align
provides a solid foundation for enterprise applications to speed                                      applications with business processes, measure their success and drive
                                                                                                      towards better business outcomes for lasting growth.


For more information contact an AT&T Representative or visit www.att.com/business.




01/17/11 AB-2073
© 2011 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.
The information in this document is provided by AT&T for informational purposes only. AT&T does not warrant the accuracy or
completeness of the information or commit to issue updates or corrections to the information. AT&T is not responsible for any
damages resulting from use of or reliance on the information.

				
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