New Approaches To Valuing Applications

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.

Which is where a relatively new company, Memento, Inc. comes in. Like some BPM products, Memento’s new solution enables customers to model and measure application usage against business process goals. Unlike BPM products, the product does not require that organizations build the business process from within the product. Instead, it uses un-intrusive and transparent connections into existing applications (including J2EE, COM, C++, and Microsoft .NET applications) to measure and monitor business processes. In a unique approach, Memento operates by watching low-level application events, transactions, and messaging communications through the debugging interfaces on different systems. Essentially, it’s software instrumentation technology that enables companies to model what they’re looking for (from an application), then monitor it.

The Memento Software Suite specifically focuses on the issue of measuring, monitoring, and reporting on business processes that occur across applications. Much like the real-time business transaction monitoring capabilities we’ve talked about in previous columns, Memento provides a way to define specific usage scenarios for an application or business process, then monitor and measure related events. Unlike BPM products that typically do something similar through a modeling and management interface, Memento accomplishes this by enabling businesses to define the desired business scenario, then transparently watch at the IT transaction level to monitor the process steps that have or haven’t happened.

For example, consider a hospital scenario that involves a person checking in, a patient chart being created, a prescription being filled, and the person being checked out. Using Memento, an organization could monitor the flow of patients through that process, and send alerts when events either don’t happen, or take longer than expected. Not only can Memento monitor the process, but it also enables administrators to measure an application’s performance against expected performance and value. Thus, it can be used to help organizations measure the value of applications in real-world deployment scenarios — even if it wasn’t initially designed to be metered or monitored.

Memento’s solution is yet another example of a different approach to modeling, monitoring, and measuring the performance of business processes across multiple applications in real-time. As I suggested in previous columns, the importance of this real-time business process monitoring will continue to grow, and I believe we’ll continue to see new solutions (like Memento) over the next few years. In the meantime, organizations that are trying to build more efficient IT organizations and closer links between business and IT goals, or who need better ways to monitor business processes across applications (and from a business-level perspective) would do well to investigate Memento and similar real-time process monitoring products.

About the Author

David Kelly - With twenty years at the cutting edge of enterprise infrastructure, David A. Kelly is ebizQ's Community Manager for Optimizing Business/IT Management. This category includes IT governance, SOA governance,and compliance, risk management, ITIL, business service management,registries and more.

As Community Manager, David will blog and podcast to keep the ebizQ community fully informed on all the important news and breakthroughs relevant to enterprise governance. David will also be responsible for publishing press releases, taking briefings, and overseeing vendor submitted feature articles to run on ebizQ. In addition, each week, David will compile the week's most important news and views in a newsletter emailed out to ebizQ's ever-growing Governance community. David Kelly is ideally suited to be ebizQ's Governing the Infrastructure Community Manager as he has been involved with application development, project management, and product development for over twenty years. As a technology and business analyst, David has been researching, writing and speaking on governance-related topics for over a decade.

David is an expert in Web services, application development, and enterprise infrastructures. As the former Senior VP of Analyst Services at Hurwitz Group, he has extensive experience in translating the implications of new application development, deployment, and management technologies into practical recommendations for enterprise customers. He's written articles for Computerworld, Software Magazine, the New York Times, and other publications, and spoken at conferences such as Comdex, Software Development, and Internet World. With expertise ranging from application development to enterprise management to integration/B2B services to IP networking and VPNs, Kelly can help companies profit from the diversity of a changing technology landscape.

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