Insurance litigation in the economic downturn

I heard a report on the news this morning that in a recent survey, lawyers have indicated that they expect a dramatic decrease in business in 2009 and do not anticipate earning income at the same levels they earned in 2008.  Really?

That may be true for mergers & acquisitions, and other similar purchase related transactions, but I do not believe the current economic downturn will have a similar affect on the insurance industry.  In fact, I believe it will have the opposite affect.

I think the upsurge in litigation stemming from the collapse of the credit markets and the mortgage industry could surpass levels ever seen before.  Litigation during these times could include some of the highest settlement amounts, parties sued, and parties suing.  Insurers are bound to get caught up, due not only to defending their interests, but also mainly due to their policy responsibility of defending insureds for litigation brought against them.

Some insurance carriers are gearing up for that increase in defense costs.  The Hartford is already battening down the hatches in preparation for a litigation hurricane.  As the insurer for The Peanut Company of America, they have gone to Federal court for clarification on the liability coverage in their policy, in preparation for the litigation defense costs and settlement payments for the over 1800 product recalls and related illnesses.

People are losing their jobs and can’t make their payments on their Lexus because they over extended in the boom of ‘07.  So those vehicles end up on eBay, on fire, or in a chop shop.  Insurance SIU departments see a swell in claim counts.  The number of injuries in car accidents goes up.  These are times when an insurer’s Corporate Performance Management (CPM) and the ability to analyze their own data against their goals, along with incorporating automated processes can really pay off and keep expenses down.  The identification of fraud also becomes key to insurer’s weathering the storm.  Lawyers send people to the same doctors and vice versa.  I remember a case of fraud where a doctor was reported to be treating 1600 people in one day.  So, who gets involved in all these areas – lawyers.  Both on the claimant and on the carrier side.

Traditionally economic downturns are the biggest catalyst for increases in insurance claims and insurance fraud – people need money.  The decrease in policies written, coupled with the increase in policies cancelled for non-payment of premium, is not as dramatic a cost change as the increase in claims.  People still recognize the need for insurance and recognize the importance of maintaining that policy.  However, insureds, and claimants, feel they’ve been paying the premiums on their policies and now they need to get some money back.

I can’t see insurance lawyers experience that much, if any, drop in revenue during this recession.

Globalization and Localization of web sites

Many companies that sell products or services internationally are finding themselves in a familiar dilemma, should their web presence be global or local?

While a global site is easy to control and maintain and can ensure consistency in branding and content quality, it can not address local culture, interests and variation.

I’ve come across an interesting view on the site of the Localization Industry Standards Association www.lisa.org

They see Globalization as a process with 2 parts

• Internationalization which is the process for defining applications and sites to work in every market
• Localization which is the adaptation of the International framework to local needs and

And the process as:

I agree that the best approach in most cases is to plan for the site and application to work anywhere and then build in enough flexibility for local control and adjustments.

The challenge in this approach is that defining international requirements and anticipating all local variations is very expensive and time consuming. So what should a company that is expanding internationally do? Here are a few questions and guidelines to consider:

• Scope of localization: how are you products or services different around the world? Is it exactly the same product (jewelry tableware for example) or does a local audience may have preferences that will impact selection and availability of products (fashion and cosmetics). If the products need to meet local regulations, standards or laws (220V or 110V for consumer electronics, Material Safety or FDA approvals for Chemicals and Drugs) or if products include attributes like language that will make them market specific (Books and CD’s). In each case, a single catalog for all products will provide the easiest way to maintain master product data but sites level of granularity may be determined by the variance in offering. It may be truly global, regional, country or language specific.
• Centralized or Distributed management. Who will maintain content, details, specs etc. in local languages? Do you assume that a product is not released until all languages have been updated? Do you allow a default language to remain until a local language become available? Is this the responsibility of a central translation group of does it goes downstream to the local group to translate? (If you are thinking about machine translation, don’t. This technology is still not ready for prime time and will drive off disappointed customers)
• How local should you go? to create a true sense of local site and service, certain adjustments may be needed to the site so it does not look like the translated version of the global template. Does the site has local news and events? Is there editorial content from local sources? Are reviews and communities local? Does the interface adapt to local language without cutting words or providing headers in English? Are local conventions like time format, date format, calendar, currency, address, name formats etc. are specific or generic?
• Build from scratch or retrofit? While substantial amounts have been invested in current web and e-commerce infrastructure, allowing for globalization and localization is not an easy retrofit and in many cases it will be faster and cheaper in the long term to build a technology foundation that is designed to support these issues. Technology issues to consider:
  • Separation of content from the display. There should be no text or images in pages and no parameters in queries. Many CMS systems support localization and handle pages this way by default but custom build CMS systems rarely do.
  • Support for UTF-8: databases and management tools as well as search engines must support UTF-8
  • Caching and Performance: a system must be designed with advanced caching to avoid extensive load on the database for rendering local editions
  • Support for variable length and right to left interfaces. Different languages have very different word length and even orientation. How will interfaces that were designed for exact size look?

While these are not simple questions to answer and resolve, creating a global experience with local flavors and details can substantially impact the ability of a company to succeed internationally.

Online Social Networking Revenue: Part II

submitted by Ken Allard

In the first post in this series, I wrote about companies that have new online revenue potential by virtue of being brokers of goods or services or by owning a significant share of market.  In this entry, I will explore the revenue opportunities for more traditional content owners who answer yes to question number 3:

1. Do you act as a broker of goods or services?
2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?
3. Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?
4. Do you have data or knowledge within your organization that is obscure to your clients?
5. Do you serve an audience that is highly fragmented?

Most traditional media companies have faced dramatic profit losses as their audiences have flocked from physical products to online alternatives.  It is ironic that their proprietary content gained intrinsic value online while simultaneously losing its ability to generate income.  Music labels have watched in dismay as their content is shared, and worse yet distributed to thousands, without resulting in direct sales.  Publishers have seen the value of their vast collection of high-priced text-books diminished as students rely on digital sources of  content and publish notes and answers to study questions on their own personal sites.  Even super-star authors like J.K. Rowling, find themselves battling superfans who create valuable media properties by adding meta-content (e.g. character lists, family trees, etc.) around their published works.  (She won that court case, but who wants to start suing fans?)

It is an unfortunate paradox, that while the Internet has dramatically increased the popularity, utility, and accessibility of all kinds of proprietary content, it has simultaneously and systematically erased the revenue models that most traditional companies have relied upon.  Nearly every consumer content company has decided that both paid subscription and fee per article/data slice business models are dead online.  (Consumer Reports is one of the last notable hold-outs.)  Proprietary business to business content services have not been as severely impacted, but they too are not recognizing opportunities to increase profits.  I believe that these organizations are failing to monetize their content because they are failing to take advantage of the fact that it is more popular, useful, accessible and social once it is available in online media.  The key to new revenue is to exploit these inherent benefits:

1. 1. Popular – Content should be marketed to , optimized for, and appreciated by the broadest possible relevant audience
   2. Useful – Content should be helpful, active, purpose driven and immersive
   3. Accessible – Content should be open, pervasive across devices, and present in the right context
   4. Social – Content should be viewed as the basis for an interaction between people, author-consumer, consumer-consumer, consumer-group, author-group

The most successful online initiatives exploit these online advantages.  Let’s look at a few different examples of companies who have already taken the right steps or who may be missing new revenue opportunities:

Universal Music (various artist Web sites) - Universal Music, like most other major music labels, is failing to monetize its content online, abdicating the revenue to various unrelated 3^rdparty entertainment sites, direct to consumer commerce sites, and fan sites.  Music labels have always treated their artist Web sites as marketing brochures for new album releases.  Rather than taking advantage of a direct to consumer connection that could deliver revenue from direct sales of music content, advertising, sponsorship, auctions of unique memorabilia, ongoing engagement with fans, and countless other revenue opportunities, they have simply failed to connect with their audience online. Despite the fact that the “official artist Web site” typically appears first in organic search results, fans spend very little time on most artist Web sites.  Instead they are shuttled off to other media properties, e.g. MySpace,YouTube, or fan run sites, where they have richer opportunities to interact with each other and the music content.  While the music labels do in fact face numerous obstacles in securing all of the rights (because of complicated artist royalty contracts) to generate revenue by using the content online, they often fail to make even a modest attempt to take advantage of the enormous online social energy that propels popular artists.

Nelly is a multi-grammy winning hip-hop artist on a Universal music label.  His official Web site is www.nelly.net.  It is a good example of the typical artist Web site.  It scores moderate to very low on the four measures outlined above:

 

Popular – While the site is optimized to be the top returned site for organic search for the word “nelly”, many other sites (e.g. YouTube, MySpace, nellyhq, and lastfm) appear just below the top result and offer better content.  Also, other entertainment sites like AOL and Yahoo have bought paid search results that draw fans away from the official site.  Lastly, the site content is not really targeted to the fans that would likely be searching for it.

Useful – If you are a Nelly fan, it is unlikely that you would find any content on this site that would make you want to come back.  It is generic, “official,” promotional content with no special features (behind the scenes, personal interactions with the artist, “bootleg” versions of the songs) that real fans would likely be looking for. 

Accessible – The site does allow users to buy ringtones for mobile devices and subscribe to a basic RSS feed. 

Social – In terms of generating revenue from an online fan base, this site is a total failure.  Fans who click on community are shuttled off to myspace.  There is no opportunity for fans to upload photos or videos from concerts.  There isn’t even an opportunity for basic fan interaction.  While the site apparently is generating some add revenue, it does little to engage fans to stay on the site or to ever come back.  Conversely, the two sites below are both aggregating an audience based on nelly’s content and monetizing the audience much more aggressively with direct commerce opportunities, numerous advertisements, and offers to join communities of users with like interests.

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Universal Music has abdicated the energized network of online fans to a multitude of unaffiliated sites.  While music labels have historically generated revenue by earning royalties on the sales of recorded music, they certainly have the opportunity to gain more rights from artists by creating immersive music experiences for their fans.  Instead of taking advantage of their relationship with and unique access to their artists to create a deluge of fresh, “meta” content online, music labels have resorted to keeping their official sites as anemic online marketing brochures.

MLB Advanced Media (www.mlb.com) - While there are thousands of fan sites and sports sites, MLB.com is undisputed premier site for baseball.  It is the opposite of the official artist Web sites most music labels develop.  Major League Baseball has been extremely aggressive in monetizing its content online, transforming what was once printed pages of scores and sports stories controlled by hundreds of physical media newspapers into a bonanza of advertising, auction, gaming, merchandise, and subscription revenue.  It gets high scores in all respects:

Popular - The site is optimized to be the top returned site for organic search for the word “baseball” or any professional baseball team on major search engines.  It almost always is one of the top 3 choices for player names as well.  It either advertises on or has affiliate relationships with other top baseball or related content sites like baseball.com.  Registration for any feature is easy.  All that is required is an e-mail address and a password. Yet, the site is establishing opportunities to learn more and more about its users over time as people flesh out their profiles as they participate in games, contests, and sign up for additional services.

Useful - If you are a baseball fan, this site has everything baseball related that you could possibly want to consume.  It is completely immersive.  Team sites, player sites, online games, auctions, subscriptions to streaming video, tickets, history, stats, blogs, forums, etc; It is hard to imagine what other kind of content they could add.  The content is active.  Users of the site have a plethora of opportunities to interact with the content.  They can play any number of fantasy sports games, some of which offer opportunities to stay engaged for a whole season, others which offer faster gratification, asking users to compete on the basis of their ability to pick streaks (e.g. winning, hitting, stealing, etc.) 

Accessible – The site allows users to deliver the content to any device.  It has numerous mobile offerings.  Users can also subscribe to RSS feeds by team or for the whole league.

Social – MLB.com has truly exploited the social nature of its entertainment content.  The fantasy sports games are an excellent example of an online social networking revenue opportunity.  Commodity data is used as the basis to bring fans together to compete in fantasy leagues.  These games increase engagement, impressions, repeat visits, duration of visit, and switching costs to competitive sites.  While fantasy sports is perhaps the best example of a social application based on content, the site also seeks to build community through more common approaches such as blogsmessage boards, and forums.

$$$
MLB.com uses its content to aggregate an audience and generate revenue through many mechanisms: direct sales of merchandise, auctions, advertising, sponsorships, subscriptions, and ticket sales.  While not all of these opportunities are directly related to online social networks, the users of the site and their ability to interact with each other and the content are what make it successful and differentiate it from static print-based publications and many online versions of traditional media.  Also, instead of giving its content away and allowing a plethora of 3^rd party sites and superfans to monetize its assets, MLB.com has taken an aggressive approach to be the best place to immerse oneself in baseball and get the most unique, exclusive access to players and memorabilia.

BusinessWeek(www.businessweek.com) - BusinessWeek is a traditional print publication that targets a general business audience and has developed an effective online version of its publication.  It is filled with breaking AP stories, proprietary news stories and commentary and is suffering from the same decline in revenue that most traditional publishers are facing.  In 2008, BusinessWeek launched Business Exchange, pithily marketed with the tag line, “Track and share business stories across the Web.”  The Web site allows users to “create business topics, collaboratively aggregate content from the entire Web and connect with other business focused users around these topics.”  It is a great tool for business users to research and/or stay current on business trends that are important to them.  The tool is easy to use and seamlessly integrated with LinkedIn.  While the service is still new, I think that it has the potential to truly differentiate and potentially transform BusinessWeek.

Popular – Business Exchange is presented to users as a tab off the home page.  It is unlikely that non-BusinessWeek users will find it because it has not really established itself as a “destination site” yet and it is unlikely that users will start searching for it.  The popularity of the site could be significantly enhanced with some marketing and PR.   Still, activity on the site is certainly respectable, and any curious business person could easily lose themselves browsing through the many user-generated blogs and stories that are posted there.

Useful – The site offers a lot of utility.  In fact, in my opinion, it notably beats search engines for getting up to speed about new issues or tracking new stories about chosen topics.  It is also provides integrated, contextually relevant opportunities to network with other users and find potential thought partners, new employees, or prospects in a targeted way.  The site has the opportunity to add twitter like capabilities in the future that might add to its overall utility.

Accessible – User profiles are seamlessly integrated with LinkedIn.  This makes it easier to sign up and start with a well-populated profile.  The LinkedIn integration also sets the right context for users. 

Social – In terms of generating revenue from an online user base, this new service has the potential to really impact BusinessWeek’s success.  The magazine has truly embraced the open, collaborative nature of the Web.  Rather than trying to cling to a strategy of differentiation by content, the site is transforming itself into a useful business tool.  While the BusinessWeek brand and content are still important, Business Exchange recognizes that the vast network of readers may have as much or more content to offer than its own staff of writers and editors.  Also, the service has an opportunity to segment and even publicly “tag” users by their reading behavior in addition to users’ explicit self-ascribed tags and interests.  I hope that this service gets some more press and attention as it is an ambitious step forward for a traditional print publication.

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At the most basic level Business Exchange will help increase revenue by helping the magazine to grow its user base and dramatically increase user engagement and thereby advertising revenue.  As the service evolves and learns more about its users, it will have opportunities to offer additional business service products such as recruiting and marketing services.

Social Networking Revenue Strategies
There are three basic approaches that these companies have pursued or should pursue to generate new revenue.

1. Transform traditional content sites into tools by embracing the open, collaborative nature of the Web. (http://bx.businessweek.com/)
2. Aggressively exploit all aspects of your content and your community, paying special attention to meta content opportunities (e.g. baseball stats, behind the scenes artist information), user-generated content (e.g. bootlegs and concert videos), and other forms of user interaction (e.g. games, lists, contests) (www.mlb.com)
3. Treat highly fragmented media properties (e.g artist Web sites) as a network.  By aggregating the audiences of smaller sites, companies have an opportunity to increase potential advertising and commerce revenue.

The Benefits to Insurance Carriers of Automated Workflow Processing

Do you still distribute paper files and mail the old fashioned way?  I see this all the time.  Even Underwriting departments have people that distribute paper policy files to Underwriters for review of applications, renewals, MVR and CLUE reports.

Why do so many insurance organizations still use a manual distribution method for workflow - especially in the Claims arena which has transactions that are so heavily paper based? There are so many problems created by paper files and mail being stacked on adjusters’ desks for handling without regard to priority.  An insurance organization takes on too much risk:

• Increased Error Rates
• Increased Operation Costs
• Reduced Service Response Time
• Extending the Lifecycle
• Raising Adjuster “Burn Out” Rate and Increasing Employee Turnover and Training 

When I was a claims adjuster, every day was the same – about 10:30, after the morning mail was opened (which I had to go to the post office and retrieve because I was a “field adjuster”), a stack about 3 inches tall, wrapped in a rubber band, would be dropped on my desk like a ton of bricks.  At least the claim file numbers were written on them which the administrative staff would spend about 90 minutes researching.  Then I would have to take that stack of mail, and start retrieving all the paper files from cabinets associated with that mail – PIP applications, damage appraisals, attorney correspondence, medical bills, etc.  How was I supposed to go out in the field when I had all those paper files back in the office?  You couldn’t take them with you because they weren’t allowed to leave the office IN CASE THEY GOT LOST.

Granted, this was a long time ago, and I had to consider myself lucky that at least I had a mainframe system into which I could enter my reserves, payments, notes and confirm coverage.  But these days, not storing files electronically and making them accessible remotely is almost inexcusable.  All that wasted time and productivity.  I probably could’ve handled twice the case load and closed files twice as fast if I could have been out in the field all the time.

Like so many of their policy brethren, many modern claim systems include automated workflow and straight-through processing features that insurance organizations with legacy systems can not, or do not, utilize.  But these legacy systems don’t necessarily have to be replaced in order to implement these types of functions.  Many independent automated workflow systems can work right along side existing legacy systems and push work forward.  I know carriers that implement a simple document management system with high speed scanners that scan and distribute 10,000 – yes, ten thousand – pieces of mail every day.

There are those claim managers that are considering making a change to their claim administration system, and may want to increase the priority of the automated workflow function in their search criteria.  By introducing an automated workflow, many insurance organizations have improved productivity by as much as 100%, recognizing savings to the hundreds of thousands of dollars, and supported a 20% increase in business with existing staffing levels.  The additional benefits to an Insurance organization of a workflow utility are that it can:

• Implement continuity in processing,
• Decrease processing costs, and
• Increase efficiencies to improve Service-level Agreements (SLAs) with customers, agents, and company departments. 

Insurance organizations can also benefit by increasing the collaboration of resources using a document repository. A single repository would enable organizations to reduce resource costs associated with searching for non-existent data or recreating data that is unable to be found, such as loss control guidelines, rating specifications, or even just the office fire procedures.  Call center and other service-related expenses can also be reduced by providing customers with access to their documents via the Web for policy documentation and/or claims forms.  In addition, field workers would be more efficient by being able to review and transfer documents remotely, reducing claim processing times and expenses, and allowing for claim payments to be issued more promptly to customers; spending more face time with insureds, claimants, and agents.  Face time is always good for business.

One final note, Enterprise Content Management (ECM) and Workflow can also be utilized as a knowledge broker between the many systems and departments within an Insurance company, and can become an important source for Business Intelligence (BI). It can provide consistent searchable metadata for proper document retrieval that can be used to support Dashboards and other BI reporting tools for executive management, resulting in improved productivity even at those levels. 

But that’s all right.  You keep paying rent on that office space for file cabinets and maintaining resources to pass paper around.  I’m sure you’re not losing market share or unnecessarily increasing your expense ratios.

Collaboration Style Revisited

When looking at the results of our last poll on collaboration styles, several things jumped out at us.

1. Nearly a third of the respondents are either still relying on email collaboration or under-utilizing basic portal functionality (document checkout/checkin for version control).

2. Among users of collaboration portals, there was an even split between Sharepoint and other tools.

This led us to wonder how broad corporate adoption of collaboration tools might be. And it leads us, of course, to another poll.

Comments always welcome, and in case you missed the first post in this series, it’s still open and you can vote here.

Cutting costs should not mean cutting revenue.

Image courtesy of BusinessWeek 9/25/08: "AmerisourceBergen's Scrimp-and-Save Dave"

The financial panic of late has caused a lot of attention on cutting costs – from frivolities like pens at customer service counters to headcount – organizations are slowing spending. Bad times force management to review every expense, and in these times obsess with them. Financial peace however has two sides – expense and revenue.

A side effect of cost cutting can be stunted revenue, over both the short and long terms. It is easier to evaluate costs than to uncover revenue opportunities, such as determining  truly profitable offerings and adapting your strategies to maximize sales. Also as difficult to quantify are the true loses in unprofitable transactions, and competitive strategies that can negatively impact your competition.

The answers to many of these questions can be  unearthed from data scattered around an organization, groking customers and instantly shared knowledge between disciplines. For example, by combining:

• customer survey data;
• external observations;
• clues left on web visits;
• and other correspondence within the corporation;

…an organization can uncover unmet needs to satisfy before the competition, and at reduced investment cost.

When external factors, like a gloomy job outlook, cause customers to change behavior, it is time to use all information at your disposal. Those prospects changing preferences for your offerings can provide golden intelligence about the competition or unmet needs.

Pumping information like this is the heart of business intelligence. Marketing and Sales can uncover the opportunity; however, it is up to the enterprise to determine how to execute a timely offering. Financials, human capital planning, and operations, work in concert to develop the strategy which requires forecasting data, operational statistics and capacity planning data to line up.

A good strategist views all angles, not just reducing cost.

Missing pieces in your portal implementation plan?

Clearly, many companies have collaboration tools such as portals on their to-do list as one of the top technology trends of 2009. Even this early in the year, we’re already hearing some frustration with the earlier adopters, in terms of the difficulties in getting their organizations to actually embrace the powerful functionality of collaboration portals. 

Here are four key elements to fostering user adoption of collaboration tools. They need to be baked into your portal implementation plan, because you need to sell this change aggressively into your organization to realize the full ROI of the technology investment. Sometimes, this can be the part of the implementation that requires the most finesse.

1. Strong executive sponsorship. Portals can fail when they are perceived as an IT initiative. Someone at the top has to get the early message out about how the portal can make the whole business more efficient. Executives can then lead the way by making the portal the preferred place to interact with the executive team.

2. Data Migration plan. If your business has traditionally used shared drives for file-level collaboration, make sure your portal migration plan includes moving the latest versions of files over to the portal site and decommissioning the old shared drive. 

3. Refine your collaboration processes to fully exploit the new technology. Workflows that have burdensome review/approval cycles can bog down any attempt at collaboration. While such rigor is useful in highly regulated businesses, it’s overkill in many others. If you make the portal a place where people can quickly share lessons learned and the new tools they develop for doing their jobs more efficiently, they will rush to embrace the portal. Limit approval requirements to the bare minimum and don’t let their contributions languish an an approval queue.

4. Change management. More than just training in portal functionality is needed. Key elements of your portal change management plan include organization design (assigning clear responsibility administration and creation/maintenance of portal sites), getting the message out early and often about the benefits of portal functionality, training in key user procedures (checkin/checkout, alerts, discussion boards, etc), and handholding as the business units create their own working sites.

If you’ve implemented a collaboration portal and are finding that your enterprise is ignoring it or under-utilizing its capabilities, please leave a comment–we’d love to hear about the challenges and how you’ve overcome them.

It’s time to clean out the Junk Drawer!

In the December 23rd issue of CIO magazine, there is a great article on “The Case for Enterprise Architects” by Kim S. Nash. Clearly, this type of article catches my eye because I am an Enterprise Architect but it is important to note that in tough economic times, the role of the Enterprise Architect becomes more valuable.  Instead of simply slashing staff to reduce costs, an Enterprise Architect can help the CIO save money by “cleaning out the junk drawer.” The average corporation has tens and sometimes hundreds of business applications, databases, one-time-use programs and other junk cluttering up their environment and, more importantly, wasting valuable maintenance dollars and personnel resources.

The Enterprise Architect can look at this mess and begin to organize it with an eye to reducing complexity and gaining better alignment with business needs. The process is called an application rationalization or, you’ll love this, an App-Rat. It isn’t a complicated process to develop an inventory of all of the good stuff and the junk, but the real skill comes in the analysis process. With the inventory in hand, the EA then maps which applications that deserve continued investment, which need less investment (stop paying maintenance, etc.), which applications need to be retired and where applications are simply missing. While it sounds like a simple process, it can become difficult in organizations that have grown by merger and acquisition to track down the information and get it organized for the decision-making process. It is clearly worth the effort when the latest statistics show that over 70% of an IT budget is spent on maintenance of existing applications. The big benefit is simply freeing up some of those maintenance dollars to retain key personnel and spend it on new, more aligned applications.

It is sometimes humorous when cleaning out the junk drawer of business applications and databases. Invariably, there are one or more applications that have become what I like to call “black boxes.” Data goes into the black box and the right answer comes out. However, no one in the IT department knows how the application was built and certainly would only maintain it under extreme duress. Programmers know how difficult it can be to follow breadcrumbs left by a long departed developer. The truth is that these applications represent very real risks to organizations and a dangerous hidden cost if they break. The skill set necessary to properly maintain these applications may not exist in enough depth in the current IT staff. The application rationalization process can identify these applications, the related skill gap and lay out a road map to resolve this risk, and more importantly, help remove this high risk and hidden cost.

It’s clearly time to clean out the junk drawer by bringing in the enterprise architect to organize, simplify and help with your budget pressures. One of the big benefits is that it demonstrates to your organization that IT can be focused on making sound investments and caring about managing costs. It will provide your IT staff with a sense of accomplishment to improve the alignment of IT with the goals of the business. Finally, it will reduce complexity in an area (IT) of the organization that struggles to cope with constant complexity.