Maximizing the value of your IT dollar Featured

5:53am EDT June 30, 2004
It's not the late '90s. Companies are no longer shelling out division-sized budgets for IT initiatives, but the need for software development persists. In most cases, it's actually growing.

CIOs looking at developing new applications are faced with the daunting challenge of meeting ever-changing business demands within a shrinking budget. The normal course of action is to either develop an application from scratch with the help of an outside contractor or purchase an out-of-the-box solution.

Working with an outside contractor has obvious benefits. Without adding headcount, you can assemble a team with the skills you need to meet your demand. You can also create a dream application to capture or process information specific to your industry.

No out-of-the-box solution is going to give you that functionality, no matter how good it is. But no out-of-the-box solution will cost you as much as it will to hire a contract team of programmers, either.

Out-of-the-box software can offer a short-term solution if you don't have a big development budget. Most will handle your basic needs. Some providers can provide further customization on a contract basis to help meet specific business objectives. Of course, if you can find an out-of-the-box solution specifically designed for your industry, it will make customization that much easier.


Partnering -- a new option

An emerging trend is for companies to form a partnership with the companies developing their applications. This usually entails an agreement that, for a reduced rate, the contractor will develop an application and retain rights to the source code.

The contractor is then free to develop and market the application as an out-of-the-box solution for other clients.

This arrangement probably wouldn't work for companies that hope to gain a proprietary advantage from the software they are developing, but for most others, it's an ideal arrangement. After all, once an application is developed, most companies have little or no use for source code rights.


Case study -- LAMPS

My company, BravePoint, has been a pioneer in this approach. Recently, we were contacted by the Georgia Association of REALTORS to develop an application capable of keeping track of membership and other data for all of the real estate agents in Georgia.

There were already several packages on the market specifically designed for this task, but the Georgia Association felt they were too expensive, too cumbersome or not customized enough to do what it needed them to do.

BravePoint looked at existing applications to see what has worked and what hasn't. We were able to take advantage of technology that wasn't available when many of the competing applications were first written. The result was LAMPS -- BravePoint's Lightweight Association Management Processing System.

Since we retained the rights to the application, we were able to offer it as a custom solution to the Georgia Association at a dramatically reduced price. We knew we would be selling the product in this market, so we became experts in its technology and its business, as well as its specific needs.

The Georgia Association was left with a custom solution, as an out-of-the-box package called LAMPS -- a software product with all the maintenance and support that go along with it. Also, any future upgrades are easy to accomplish because of our partnership


Partnering for a win-win

Costs for producing major IT initiatives haven't gone up, but budgets have gone down. If you are about to start a major IT initiative, consider forming a partnership with your provider.

Relinquishing ownership rights of the source code for a new application can help you do a major installation at a tremendous discount. The result is cheaper, better and more versatile software for everyone. John Harlow is president of BravePoint, a supplier of e-business and enterprise IT solutions to mid-market companies. Reach him at (770) 449-9696, ext. 3012.