Joe, thanks for writing about the issue.
Yes, as a 'sponsor' of the study, we'd gladly harp on the virtues of our solution ad nauseum but this is neither the time nor the place!
I believe the 'meat' of this article is, as you succinctly state, that we've cracked 50% and yet there's still lots to be done (after all, 50% isn't really a huge number...). There's a wealth of information out there regarding 'doing it better' and yet for years we've had this information and still just plodded slowly along 'evolving' to this 50% mark. One of the highlights from the study (from my perspective) is that it prompts a question regarding how we currently resource and fund projects versus where we might better place those resources to achieve greater returns. To quote Chris Dowse, "invest in improving the herd of users as opposed to the laggards and the derived value from the system can be exponentially improved." Have we been mis-placing our 'bets' all along? Maybe this is just the revolution that will help us crack the 60-70% mark?
What do you think?
Steve - datango
A new study by a consortium of IT management vendors finds that companies are finally starting to get more out of the millions of dollars they invest in enterprise software. There’s still a lot of work to be done, though.
The survey of 204 companies was spearheaded by Neochange, an enterprise IT adoption consulting firm, and CIO Insight, along with something called the “IT Adoption Alliance,” comprised of vendors datango, iRise and Knoa Software.
Although its been a challenge to wring benefits out of bottomless pit investments in enterprise software, the study says things are drifting slowly in the right direction. 2010 marked the first year that organizations collectively achieved an average effective usage rate greater than 50%, the survey finds — hitting the 54% mark even. In 2008, the effective usage rate averaged about 43%, and hit 49% in 2009.
So why is this a big deal?
According to Neochange, “effective usage” is the best indicator of ROI because it serves as an “indicator for understanding software value realization and has been defined as high levels of active user engagement with the software and high data quality that enables actionable insights.” The higher the effective usage rate, the higher the ROI. For example, if an application achieved more than 75% effective usage, it has a very good chance of being very successful, the report states.
So why has enterprise software effective usage going up over the past three years? Are enterprises finally getting smarter?
Tight economic conditions probably have something to do with it — the mandate handed down to IT has been do more with less, make the most of what you already have, and make it stick to the business. Nothing clarifies a project more than when it’s on the chopping block. Getting smarter may also have something to do with it. There are methodologies and better tools available to measure adoption and progress of software installations (as I know the study’s sponsors will gladly point out).
Still, putting money into enterprise software projects is an uncharted walk into the wilderness. Fewer than 10% of organizations can measure the impact of IT on business productivity, the study also finds. IT managers need to take leadership roles — and great communicator roles — to promote and sell the benefits of software solutions to their enterprises. They need to be leaders and partners in business development and expansion, not “order takers,” as Neochange’s Chris Dowse puts it.
In fact, in companies where IT plays more of an order-taker role, enterprise effective usage hovers around 49%. In organizations where IT helps lead the business, effective usage rises to 71%.
