For years, companies have created and deployed applications because they needed to get something done. Perhaps it was an order-entry system for saving time when taking product orders, or a product return application for tracking products that were sent back. Companies create and deploy applications to do specific tasks—tasks that should, unless there’s a fundamental disconnect, be delivering value to the company.

Such value might be a reduction of costs, if automating the task with an application results in fewer employees being involved, or a reduction of time spent by employees on the task, etc. Or the value might be increased revenue through new cross-selling opportunities, or more finely-tuned pricing structures that enable an organization to maximize product revenues based on customer interest. Regardless of what tangible value the application delivers, the measure of that value is based on how well the application does what it was intended to do.

Unfortunately, few companies have spent the time or energy needed to try to measure whether their applications are doing what they were intended to do. Are orders flowing through the system as expected? Are the levels of returns appropriate for the current business objectives? Are there bottlenecks in parts of an application or business process that are impacting profitability? Up to now, it’s simply been too difficult or complex to try to create a mechanism for measuring how well the application is performing against a pre-defined value metric. Instead, most companies have been content with the traditional process of creating applications, deploying them, and living with the results.

In many cases, enterprise application value is defined in terms of the expected financial ROI — how quickly an organization will generate a return on the value invested in the application. Yet, in the real world, things rarely work out as expected or painted in an initial ROI calculation, since there are many factors that can impact the ongoing “value” of an application to an organization.

To overcome this, some organizations have taken the approach of using system-management type tools, and some business process management tools, to define metrics for a business process, then measure them over time. While this can work for monitoring a business process, it doesn’t necessarily get to the heart of the problem — determining how an application is performing against expectations.

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