How to Evolve IT Systems into Innovation Engines

Eric Helmer
SVP & Chief Technology Officer
3 min read
How to Evolve IT Systems into Innovation Engines

When vendor-driven and customer-driven technology roadmaps are in close alignment, the results can be almost magical. Unfortunately, for most organizations that’s rarely the reality as they’re often left struggling to achieve innovation that their vendors are supposed to enable.

IT leaders are all too familiar with this cycle: Up-and-coming vendors mature or get acquired and their priorities shift from enhancing value to locking in customers to ensure a steady stream of revenue from services, forced upgrades, and worst of all, rip-and-replace reimplementation.

Today’s IT leaders, working closely with business leaders, want to enable business initiatives critical for competitive advantage and growth. They want to extract the maximum value from existing investments while freeing up funds to innovate. They are more than eager to modernize with best-fit cloud solutions that drive innovation and rapid business impact, but they need to do so with ROI-based solutions.

Don’t get handcuffed

This is typically where vendor and customer roadmaps diverge. Rather than fostering customer innovation, vendors often handcuff it with strategies and practices designed mainly to enhance recurring revenue from a captive installed base. Increasingly, by bundling infrastructure, license, and services into a single-subscription contract, they steer their customers into innovating at the speed of a single vendor.

So, how do you move your organization from the vendor-driven roadmap to your needs-based roadmap? Follow this decision tree to determine what works best for you:

Start with business requirements and assess if those can be accomplished in existing systems. If yes, calculate cost and ROI. If it’s cost-effective to configure existing systems, then resist vendor pleadings and incentives to follow their roadmap. If it’s not cost-effective to continue with those existing, reconfigured systems, then look for the best vendor option to pursue—just make sure your chosen vendor supports your modular business approach.

This is how you can focus your strategy to turn your IT department from a cost center into a profit center. For most organizations, today’s ERP sits solidly in that cost center category. Modernizing those complex systems  does not require a rip-and-replace strategy that most vendors seem to encourage with incentives and penalties aimed at guiding you along their roadmap.

Vendor subscription models provoke concerns

In a recent Rimini Street-sponsored survey report by Censuswide Research , a stunning 99% of IT leaders indicated concerns over implementing a vendor subscription-based model, with the top concerns centered around ROI (42%) and vendor lock-in (42%).

The survey found that 74% are laser-focused on optimizing their enterprise software by looking at total cost of ownership and better outcomes. They are looking for best-fit applications and reduced day-to-day IT system maintenance, with a focus on:

  • Maturity of modern security capabilities such as Web Application and API Protection
  • Agility in managing application portfolio
  • Reducing day-to-day maintenance

More than half of IT leaders surveyed believe digital transformation doesn’t require a “rip-and-replace” approach for core ERP applications.

That doesn’t mean they aren’t intensely focused on innovation; on the contrary, they recognize the difference between systems of records, systems of differentiation, and systems of innovation. With the first, many are realizing the best option is to outsource purely cost-driven support to a provider who can do it more cost effectively and deliver on SLA commitments.

By outsourcing support for systems that are well integrated, commoditized, and stable, IT organizations can reallocate resources and upskill staff to focus on innovation and creating intellectual property that delivers value. The bottom line: Don’t feel compelled to follow your vendor’s roadmap until you’ve fully evaluated how it fits with your business goals of evolving IT systems into innovation engines.

Learn more: Want more control over your IT roadmap? For complete data, insights, and analysis to help you chart the right IT roadmap for your business – independent of vendor pressure, download the full Censuswide Research report sponsored by Rimini Street today.