Yet More Deadly Sins of the DIY Cloud

Transcription

1 Yet More Deadly Sins of the DIY Cloud Demystifying the Build vs. Buy vs. Outsource Decision for Enterprise Apps The Lure of Internal and Outsourced DIY Development The larger an enterprise gets, the more alluring and riskier the idea of building a Do-It-Yourself (DIY) application internally becomes. With more programming talent in IT eager to learn cloud application development and prove themselves, larger budgets to support outside consultants, and technology partners from literally around the world knocking on their door, it s even more tempting. Sooner or later reality hits: building enterprise applications internally is much more costly, challenging from a scale and skill standpoint, and is just the beginning, not the end, of supporting changing business models. There s the option of also going with system integrators and partners. The best system integrators and partners specialize in solving business challenges that often require re-engineering existing business processes. They also recommend off-the-shelf applications that can improve business performance, as opposed to letting clients build or outsource their own custom applications. Their focus is on orchestrating application software, processes, and workflows into a unified long-term strategy for their clients not continuous custom development. Acting as trusted advisors, the best partners select the optimal mix of enterprise apps for their clients needs and combine them together to create long-term scalable strategies. The decision of whether to partner with a system integrator or outsourcer, purchase an enterprise application or attempt to build the application internally is complex. But there is a framework for realistically evaluating each alternative. Too often enterprises that need to streamline their most important customer, sales and service processes choose to develop their own applications. Sold on the idea that when the app is done their problems are solved, many of these enterprises don t realize that their journey is just beginning. APTTUS Corporation apttus.com US: (650) EMEA: +44 (0)

2 The Long and Winding Road of DIY Apps Companies need to get beyond the mindset that building or outsourcing an application internally created can support a business strategy. The most effective software applications accelerate business strategies and are agile enough to support changes in business models over the long-term. Taking a long-term perspective to the business challenges faced is essential to keep future needs in context. It is rare to find an internal IT department or outsourced development firm that is capable of this type of scale when there is more than enough work to do on projects to maintain business operations today. Enterprise apps are just more complex than what IT organizations initially estimate. Many enterprise apps have consolidated technical knowledge, domain expertise and years of live customer usage to fine tune their app. For example, even with 5 full-time FTEs, it can take over 5 years or more to develop a basic DIY quoting solution that s similar to most enterprise apps. Another common belief for some IT organizations is that developing a limited set of functionality can save time and money. What often happens is that thanks to scope creep, development challenges and IT bandwidth, they end up taking much longer to gather and finalize requirements than originally planned. And even under the most optimal circumstances, within just a few months of going live, most IT organizations end up facing new business requirements that can t be easily updated in their DIY app. The truth is that the catalyst that makes the applications deliver value is how well they are adopted, used, improved and over time engrained into how a business operates. To get to that level of performance with any app, its first release truly must be seen as the beginning, not the end. Yet many enterprises choose to build or outsource their own cloud-based enterprise applications in so doing get more challenges than they bargained for. The 7 Original Deadly Sins of DIY App Development 1. Wasted Time and Money Cost of delay is biggest issue with DIY apps. It takes time to define, design, develop, test and deploy app. 2. Development Support How will IT team handle user questions, quality issues and SLAs for yet another app? 3. Developer Churn With high IT turnover, who will resolve issues 2 to 3 years later? 4. Stuck in the Present Custom apps are focused on current requirements only. 5. Technical Limits Does IT team know the best way to optimize code for cloud platforms and integrations? 6. Poor Governance Need for documentation, standards and audits 7. Technology Isn t Everything What are best practices in the industry? How should processes be structured? There are many reasons to avoid custom DIY development, including wasted time and money, no plans for support or worse using developers as support staff, dealing with developer churn, applications that stay stuck in the present, technical limits, poor governance and the lack of recognition that technology isn t everything. In short, enterprise IT departments are ill-equipped to take on the journey of an app from launch to long-term value. Keeping an application current technologically is even more important than the initial release, because that s when value starts to accumulate from using it. Add to this the need to support a 2014 APTTUS 2

3 proliferating base of mobile devices, and the value of selecting an app over attempting to build one internally becomes clear. The Salesforce1 platform s support for mobile devices of all types changes the context of development away from a never-ending cycle of improvements to freeing up enterprises to focus on how to grow their businesses. In addition, the Salesforce1 mobile first design paradigm includes support for touch-enabled mobile applications, visual design tools, and built-in integration with salesforce applications. Accomplishing just one of these using internal development would be prohibitively expensive. The value of enterprise software built on a platform by a vendor who has deep expertise using its APIs, tools and development environment saves tens of thousands of dollars and hours. Building an app or having an outsourced company create one is just part of the journey. For any app to deliver lasting business value, it has to attain a level of adoption quickly that surpasses other less successful IT projects, while at the same time staying current with platform and application development technologies. Enterprise software companies who have standardized on the Salesforce1 platform are delivering applications that redefine ease of use and excellent user experiences. One of the key design goals of the Salesforce1 platform is to provide a user experience comparable to popular social networks including Facebook, LinkedIn, Twitter and many others. The Salesforce1 platform supports greater agility and flexibility for customizing the user experience, which is nearly impossible for custom-built internal applications to do. Staying current with platform and application development technologies while continually improving the user experience needs to stay tightly aligned with business objectives and needs. Meanwhile, the business, competitive and economic conditions continue to change, all influencing the company s business model. By seeing how all these moving parts are constantly changing, it s clear why choosing an enterprise software provider makes so much more sense. Extraneous factors and variables are taken out of the equation of making an enterprise app work and deliver value. There is greater clarity of the business objective and what contributions apps can and will make to their accomplishment. It can take 5 FTEs 5 years or more to build a robust enterprise app DIY Apps Can Impact Customer Trust By their very nature, enterprise applications are essential for building and strengthening trust with customers. If these applications falter or worse, fail to work accurately, customer trust is lost. Building 2014 APTTUS 3

4 enterprise apps internally puts greater limits on business strategies. Outsourced applications created to support new business models often have a high number of integration points with legacy systems, which often leads to high maintenance and upgrade costs. That s because many outsourced development partners specialize in rearchitecting and re-engineering end-to-end business processes that span an entire organization. Like many of the internally built applications, outsourced apps are expensive to update with the latest features necessary to stay competitive. Worse yet, they must be redone when there are changes in underlying technologies. All these constraints slow down sales. When an enterprise chooses to buy an enterprise application, especially to support its sales and service, the tables are reversed. Now the business strategies come first, business results matter and the cloud becomes an accelerator not a constraint. And best of all, trust flourishes. The greater the trust, the greater the sales, repurchases, successful upsell and cross-sells, and higher customer lifetime value. 13 Considerations for Building, Outsourcing or Buying With so much experience and customer trust dependent on the quality of your enterprise applications, it s far more prudent to seek out experienced enterprise software vendors whose primary business it is to keep these applications current. Building or outsourcing your own enterprise cloud apps is extremely difficult and costly to do well especially when you consider any timeframe beyond a few months. Here are 13 reasons to consider for custom-built enterprise apps: 1. Demand for internal resources and their continued collaboration and communication is much more than many companies estimate. From business managers to IT staff and project management, the time drain is significant and takes away from the core business goals getting done. Considerations for Building, Buying or Outsourcing Internally-built applications lack the ability to immediately scale to new future business models. Off-the-shelf apps are more complex than they look, and trying to replicate them often fails to save time or money. Application value relies on how well apps are adopted, used, improved and over time. Internally-built applications are plagued by analysis paralysis and can create political infighting. Apps need to stay current with platform and application development technologies. Organizations need to consider broader view of an app from launch to long-term value. Enterprise applications are essential for building and strengthening trust with customers. Many outsourcing firms make their most fees from engagements where clients need to have one of their associates on staff constantly. 2. It is often difficult for internal IT teams to stay current on integration APIs and platforms that will support the business. 3. Projects often become more about technology and less about the line of business objectives. This leads to internal app development focusing on keeping the project moving often at the expense of the initial goals being accomplished APTTUS 4

5 4. Hidden and unforeseen maintenance costs are commonplace. 5. Internally-driven or outsourced projects for new apps often never end well or at all. 6. Long term code stability is non-existent as mergers, acquisitions and re-orgs, along with mediocre governance leads to source code often becoming displaced or lost. Consider the impact of changing business models, technologies and IT priorities 7. No real mobility support apart from one-off projects. 8. Ongoing training and support is rarely planned for internally built apps, or at best, it s an afterthought. Too often internal development schedules and resources don t allow for the level of training and support necessary to make an app succeed. 9. Lack of in-depth software quality and QA expertise. 10. Significantly higher risk of project failing due to lack of internal coordination and cooperation. 11. Inability to quickly scale and support future business models. 12. Nearly impossible for internal IT teams and programmers to stay current with platform requirements 13. Longer time to implement given resistance to change and relative lack of application agility. When evaluating internally developed, outsourced or off-the-shelf applications, use the framework below to evaluate your options. Internal Build Buy Outsourced Build Demands on Internal Resources Extremely High Low - High Ease or Difficulty of Integration Very Difficult Every adapter and connector must be hand-coded and there is often no platform to build on to streamline system and process integrations. Integration is never easy, yet with a platform that has proven APIs that support mobile devices, it can be made more efficient. Hard Often partners have expertise at the platform level; yet with each modification to APIs and coding standards, there needs to be a change to the application as well. Flexibility at the Feature Level High High 2014 APTTUS 5

6 Is the Project a Business Strategy or Technical Development? Majority of time and dollars invested in technical development. Technical development teams and business strategists need to work closely to build and launch the application. Burns valuable time in both the business and IT organizations. Majority of time and dollars invested in business strategy. Project team manages customization, integration and legacy system support. Majority of time and dollars spent on project management. Internal project teams coordinate with partner coding teams to create app; attempts to sync up app development with current business strategy. Is There an End Date to the Technical Development? No Development often continues well beyond the initial release driven by scope creep; Add-on projects commonplace to fix integration problem areas with legacy systems. Yes Initially After the initial release is complete, companies often realize they have missed significant features or need to update the app because of business changes Long-term Code Stability Low Nonexistent High Low And Costly Mobility Support in Applications Very Difficult Easy to Moderate Platform API support Moderate, Yet Costly Custom development of mobile apps is very expensive; costly to maintain; requires new development contracts and services Ongoing Training and Support Extensive and Never- Ending Delivered within the App; Standardized Training Increases Adoption Extensive with Customized Documentation and Training Ownership of Source Code Yes No Partially Maintenance Costs High Very high costs for using internal IT staff to custom build an application; high costs to keep it maintained; opportunity costs of business managers and project management staff; high opportunity costs. Low - Managed Services Packages for post-delivery can get expensive quickly; often application provider follows platform guidelines to save customers costs. Software Quality and QA Expertise Low High Risk of Project Failure High Platform technologies change rapidly while business needs also shift fast. Low Capable of being more agile than internal development. High Cross-functional team coordination often delays progress and increases costs APTTUS 6

7 Scale to New Future Business Models Little to No Scalability Each new iteration of the app needs to be custom coded internally, often at significant costs. - High Scalability Cloud-based apps have the potential to scale with business models as they change; nearly always more agile than internally built apps. Little to No Scalability Each app update requires careful coordination with external firms, including extensive requirements gathering, design and testing. Staying Current with Platform Requirements Very Expensive Takes valuable engineering time and a continual focus on new platform releases. No Extra Charge Platform functionality is included in baseline application. Critical to a software vendor s ability to stay in business and no to minimal cost to customers using the system Unforeseen Costs Completes initial app design & development then upsells services or advises on hiring experts internally. Partners often advise customers on how to recruit platform talent; largest partners have platform expertise on staff and the cost for upgrades is often in tens of thousands of dollars to keep a custom-built application current. Time to Implement Slow Scope creep is pervasive and change management a major challenge; majority of build projects fail to deliver all functionality defined. Fast Defining contract terms that motivate vendors to deliver on or ahead of schedule, indexed to quality, leads to faster time-to-implement. Faster for smaller releases, yet can take over 9 months if partner technical support and program management get bogged down in scope creep. Financial Viability Risk of the Project Long-Term High Risk Internal projects often have their budgets reduced or cut completely once an application has been built; little budgeting is typically done for follow-up or long-term improvements. Low Financial viability of a software vendor is often easily determined from their financial reports if they are publically-traded; if they are private, D&B Credit Reports can be run. Software vendors viability varies, which is why SLAs and contracts need to reflect contingencies. Outsourced firms financial viability varies significantly. The firms who sold initial app development on price alone are struggling today as the sales technique of getting an app done extremely fast has not turned into long-term gains for clients. Those firms who chose instead to focus on being trusted advisors and are taking active ownership of their customers problems are flourishing today APTTUS 7