Boardroom IT clinic: Ensure it’s all right on the night

Listen to this article

00:00
00:00

How do I future-proof my major IT investment?

Cast your mind back to the early 1980s, when arcades provided what turned out to be the most successful coin operated game in history: Pac-Man.

Who would have thought that this game would guide the behaviours of many of today’s technology market leaders? But hey, as a technology buyer, you get to participate as well – as Pac-Man feed.

Anybody who has a substantial investment in technology from a single vendor will know the feeling.

The vendors are in a Pac-Man-like rush to consume the market, and, to accelerate the process, consume each other.

Notable moves include PeopleSoft’s acquisition of JD Edwards, Oracle’s acquisition of PeopleSoft and, most recently, Siebel.

These are characteristic of the pubescent IT industry gravitating towards maturity. The acquirer is purely interested in the customer base of the acquired, and will jettison its product portfolio at the first legal opportunity. How many CRM solutions does Oracle need to offer?

Who will be left is the key question? Knowing the answer will minimise the chances of your IT investment being on the road kill side of the scoreboard. But the answer is far from clear.

The examples above relate to Oracle’s endeavours to remain a contender in the enterprise applications market. SAP is the number-one player, and one would think in an unassailable position. However some time back it transpired that Microsoft had its eye on the German software giant. So nothing is certain.

So how do you minimise the impact of investing heavily in technologies that may well become obliterated by the acquisition of your supplier?

The first thing to keep in mind is that being an investor in IT, you are by default in the IT risk management business. So all endeavours to minimise victimhood should be underpinned by a risk mitigation philosophy.

Recommendation 1.

Treat your technology investment like a portfolio. Having all your eggs in one basket is to be avoided. Study your assets in terms of their business impact and vendor control (or “lock-in”). The extent to which the vendor controls the relationship will have a direct impact on your ability to migrate to a rival product if needs be.

Assets that have a high impact on the business, but place you at the mercy of the vendor will require your immediate attention.

In enterprise applications, consider using modules from more than one vendor, rather than being seduced into a tailored end-to-end solution, which sounds good, but is the equivalent of giving someone else control over your central nervous system.

Recommendation 2.

When specifying technology requirements, minimise references to product names, but maximise references to open standards.

If you use providers that base their offerings on standards not under their control,such as Unix or SQL, you have a greater chance of migrating to another vendor, if necessary. Be wary of proprietary standards created by the vendor. Focus on those controlled by independent standard bodies.

Recommendation 3.

Insist your provider “insures” you against the possibility of an aggressive takeover.

Recommendation 4.

Establish whether there is a thriving market for support services relating to the technology in question.

Should the technology be facing a dead end, then these companies, and particularly those that deal solely in the technology facing obsolescence, are in a tricky situation as well. Their offering is in danger of being market-irrelevant.

Such companies are likely to offer migration services, if only to keep their business “above water” until they come up with their own plan B. Steer clear where the product supplier is the only supplier of related services.

Recommendation 5.

Join the user group or form a user group and take an active approach to ensuring that your needs are not overlooked.

Making big ticket technology purchases is a risky business. Portfolio management is a better option.

Portfolio management will require better technology,and vendor and people management within your organization.

But the overhead will more than pay for itself, if it means one less item on the executive committee’s business-critical risk register.

Ade McCormack (ade@auridian.com) is founder of Auridian (www.auridian.com), which focuses on helping business professionals get to grips with IT.

He is author of IT Demystified - The IT handbook for business professionals (www.auridian.com/book).

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.