With the financial crisis imbuing the need for frugality across insurance enterprises, optimization of existing resources is paramount, a new report claims.

The report from London-based Butler Group, titled “Evolving Enterprise Applications,” contends that with capital in short supply, CIOs should look to get more out existing enterprise applications such as enterprise resource planning (ERP) and customer relationship management (CRM) systems.

According to Angela Eager, senior research analyst at Butler Group and lead author of the report, organizations can transform operations and unlock heretofore-unrealized value propositions by reassessing the way existing applications are architected, delivered, and used.

“Challenging times are times of change, but change also brings opportunity and that means taking a fresh view of what is being done, why, and how, and being prepared to adapt both business operations and applications,” Eager says. “Organizations will benefit from a change in perspective in which enterprise applications are perceived as fundamental enablers of change, with the capacity to adapt to new business demands and add further dimensions to new technologies, rather than as static back office transaction engines.”

The report claims this ability to achieve transformational change on the cheap has been greatly abetted by the modularity and business agility brought about by the move toward service oriented architectures and by the standardization resulting from the increased use of business process management (BPM) capabilities. Moreover, Butler says the wider use of analytics and Web 2.0-type technologies for collaboration and real time interaction have all played a part in expanding the functionality of enterprise applications.

While leveraging existing systems is largely less expensive than buying new ones, Butler cautions that strategic spending is necessary to maintain the value of existing investments and deliver fresh financial benefits. “Existing implementations are the perfect platform to deliver these sorts of micro-based incremental benefits, rapidly, with minimal risk and in a cost efficient manner,” Eager says.

Tough choices, such as opting for standardization over customization, may also be necessary. Butler also counsels IT organizations to look anew at software-as-a-service (SaaS). “Evolution has multiple dimensions and change is being enacted in the way applications are delivered – organizations seeking ultimate agility should look at SaaS,” the report states.

Ultimately, the report contends for these transformational efforts to be effective, IT must first seek a closer alignment with the business.

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