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Go to "And Now for the Heavy Lifting,", or catch up on their developments at the Life Time blog. |
Looking ahead to a time when the CRM and MMS applications--as well as applications run by partner companies--will need to link to the employee applications for paperless contracts and other functions, Life Time spent two weeks pilot-testing a packaged application integration server from Confluent, formerly known as Corporate Oxygen. The software costs $50,000 to $80,000.
Life Time pursued the packaged and custom approaches simultaneously, reasoning that the connectors to legacy systems would have to be written anyway; Confluent's software comes with a few dozen packaged connectors but only for modern enterprise applications.
The development of custom connectors also was necessary to predict how long future connectors will take to develop. Life Time is negotiating with an HMO provider that may subsidize member dues and with a retailer that may carry Life Time's nutritional supplements. These parties wanted to know how long it would take to go live once an agreement is reached. The deals could come as soon as February, Zempel says.
A packaged integration server such as Confluent's lets foreign systems connect regardless of the Web services protocols--such as SOAP (Simple Object Access Protocol) or .Net--used. It also includes security and management functions, such as the ability to set failovers when a Web service fails and track how well the applications are adhering to service-level agreements with outside companies, according to Confluent founder and CEO Rajiv Gupta.
The investment-portfolio approach to IT spending encourages this kind of experimentation without commitment while considering factors that a traditional ROI analysis does not. These include risk, such as the possibility that a CRM project might fail, and options, such as the new capabilities that an infrastructure investment creates; this is otherwise known as latent or deferred value. While some projects have a clear payoff, most fall into a gray area where the pros and cons are complex.
Too many IT shops feel obligated to continue projects that may not be a good fit simply because they've made a financial commitment. Say a company invests in a pricey ROI study, for example; if the study does not reveal a clear yea or nay, the company may feel compelled to pilot test, thereby increasing the investment, and companies can feel obligated to roll out the application instead of cutting their losses. Viewing IT projects as portfolio investments brings this pressure into focus, says Wesley Bertch, Life Time's director of software systems. "It's never fun to write off a project," he says, but it's better done sooner rather than later.
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