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Maps for Apps

A new framework helps companies assess the true cost of legacy applications.

Something to Talk About

Other potential benefits of AIM include the ability to spot well-performing applications that can be scaled to other parts of the organization; identify processes that can be outsourced; and give CFOs and CIOs a common platform for discussing IT systems and investments.

That common language may be the biggest benefit of the framework. “The IT department can’t do this alone,” Monteiro says. “They will have to collaborate with the business to understand the linkages between business processes and IT.”

“When things get very technical, it is often hard for financial people to really understand what’s important, what’s nice to have, and — frankly — what we don’t need,” says Bob Jackson, CFO at American Century Investments in Kansas City, Missouri, and a former Sapient customer. The AIM framework enables a company to understand why it is doing certain things and to value those things appropriately, Jackson explains. After all, he says, how can you push to have certain applications dropped when you don’t really know which ones matter most?

There is little doubt that a stronger finance-IT partnership pays off. At Norcross, Georgia-based Rock-Tenn Co., a manufacturer of packaging and merchandising-display products, the accounts-payable department recently asked for a number of changes to a financial system. The company’s IT department priced the work at $250,000. But when finance and IT worked together to more clearly define the costs and benefits of the project, the ultimate solution cost only $50,000. Rock-Tenn CFO Steve Voorhees compares the big-picture view that the AIM framework encourages to the company’s Six Sigma quality initiative, in that both rely on a cross-functional project team to guide the company toward consistent improvement.

The AIM framework is a proprietary approach developed by Sapient. The tools and consulting help offered around it can spare companies much of the grunt work involved in parsing the many costs that go into an application and assessing its ultimate value. Creating the process map or “system context diagram” that links applications to processes, for example, is quite complicated. Companies have used alternative methods to address the same issues — British Telecommunications Plc, for example, had used activity-based costing when it learned about the AIM framework from Jeffery at Northwestern. Martin Bevan, BT’s financial controller for IT, says one lesson his company learned is that it’s very easy for a business case and its associated technology project to become disassociated.

“You may get a five-year business case that budgets $3 million to develop an application, and maybe a fraction of that to maintain it year after year,” he says. “But you will likely have to replace the hardware, upgrade the operating system, or make other changes that increase that maintenance amount substantially.” By that time, he explains, the system is ensconced, but its business value be-comes more dubious day by day.

“People tend to focus on the front end of projects. But even if, over time, you reduce an application’s use by 90 percent, eliminating that last 10 percent is a grind. And you still need 100 percent of a box to run it.” A proper framework can uncover such issues and help companies decide when to put an application out to pasture.

Connie Winkler is a Seattle-based writer who covers technology management.

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