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September 07, 2015

Not so long ago, application management was considered a cornerstone of an organization’s IT strategy and a key enabler in driving transformation across different functions. It sought to achieve continuous and consistent growth by enabling not only operational efficiency but also key innovations centered on customer management, brand development, supply chain efficiency and R&D.

But led by continuously changing business environment, new approaches and architectures have come into play to deal with problem management. The consumerization of IT enabled services has raised the expectation levels of all stakeholders.

The question we need ask is “Is traditional business application management still the answer to these new developments?”

The greatest challenge being faced by an organization today is that of dealing with change successfully and coming up with a lifecycle approach that provides immediate and durable benefits. This is especially true for Retail and Consumer packaged industry which faces high uncertainty due to complex consumer habits and cultural influences of global markets.

To tackle this, global organizations in this space are reaching out to a new breed of consumers while wrestling with a landscape of changing brand loyalties, cross-channel conflicts and digital influences. There has been considerable investment from them in new product solutions to drive brand and product management decisions, pricing strategies and optimized operations.

But in spite of all the investments in application management domain, organizations still do not realize value in terms of:

  • Cost reduction
  • Productivity
  • Quality of service and
  • Risk reduction

The main reason for this anomaly is the unidirectional approach which is followed with respect to business application management. Vendors tend to technically monitor IT events without understanding their business impact.

They typically assess the IT resilience of an application by tracking aspects such as availability and uptime of a system but do not link it to business process improvement. The need of the hour is to come up with a business process management approach and measure actual ‘value realization’ through proactive system monitoring of Key Performance Index’s. An automated effort to link technical and business processes would result in:

  • Reduced total cost of operations (TCO)
  • Zero error order processing and
  • Removal of “eye ball” monitoring

The key to mapping business processes with IT events is to understand all the important tools, techniques and technologies and measuring their impact on the business. It demands innovative use of:

  • Applications
  • Industry-specific knowledge
  • Relationship/Vendor management
  • Sourcing model/Location

For instance, in Retail and Consumer packaged industry one would need industry specific insights to understand order to cash process and how qualified resource reduction would lead to cost savings and improvement in productivity for an organization.

But it’s easier said than done. There are some key challenges that organizations need to address in order to realize full value. It starts with collecting right requirements from all stakeholders (i.e. business, IT etc.) and establishing key KPIs to designing an incident management framework.

Last but not the least; organizational inertia is a big hindrance in any such implementation and a transition strategy should be in place to deal with any such resistance.

In the foreseeable future, any initiative around business application management should be transparent, agile and focused on end process outcomes rather than having a singular view of IT related events. A marriage of business process KPIs with technical KPIs, so to speak

For this to happen, organizational strategy should be aligned with technology and people with a view of main cross-functional processes. It would lead to launch of right initiatives, linkage of strategic decisions to operational execution and use of synergies systematically.

End result would be greater engagement of the application with business teams, particularly in driving business cycle improvements and much higher value realization for the organization