Do you wonder why your company has so many people working on your legacy applications? And even though your general ledger or accounts receivable application has been running faithfully for years, does your support staff still dedicate many hours maintaining each of them?

If all those hours are being used to actually keep the application up and running, it might be a candidate for retirement or replacement. But what’s probably happening is that a large portion of the time is going toward small, sometimes unnecessary enhancements. If that’s the case, it’s time for you to determine the value of enhancing those applications to make sure they are truly providing a service to your business.

What are enhancements?
Enhancements are requests made by the business users to add or modify functionality in an existing application. Think of your business application as a house. If a window is broken or the water heater explodes, of course you’ll fix or replace it.

This is the equivalent of true support work—keeping the application working and stable. But how many people build a house and then make no upgrades over the years? Enhancements are like installing better carpet, adding wallpaper, or building an additional room. One key difference is that enhancements are discretionary. They can be scheduled and prioritized.

How does your company handle enhancements?
Forcing enhancements through a prioritization process, or filter, will squeeze out the low-value requests, freeing up people and dollars for the high-value projects that will have a positive impact on the business. If you’re trying to assess your organization’s processes for application enhancements or determine if resources are being wasted, start asking the following questions:

  1. Who does the work?
  2. Are they tracked separately?
  3. How are they requested?
  4. How are they prioritized?
  5. What value do they provide?

Once you better understand the hidden costs, you can decide how many resources and dollars your company can afford to apply toward these application modifications.

Prioritize enhancements
Unfortunately, many enhancements end up resulting in only marginal business value. Add up the cost of all the enhancement work that you perform and ask yourself: Are you selling more product than you did before? Are your operating costs substantially reduced? Are your customers happier or more loyal? In many shops, the cost of enhancements is blended into the cost of true application support. This puts the enhancements under the radar screen and can help them escape scrutiny at budget time.

Analyzing the business value of enhancements will allow you to prioritize projects and allot staff to those projects that add capabilities and bring high-value returns to the business.

Sometimes you must force change
It’s always likely that if you don’t begin to prioritize enhancements, your superiors will. I saw this occur at a previous company, where senior management began to question the dollars spent on enhancements.

They asked their business units to only make application changes that were absolutely necessary. Some managers took this to heart, freeing up dollars for other work.

However, the managers that did not have the discipline to filter the enhancement requests found their budgets cut arbitrarily—some down close to zero—which forced them to ask upper management for any enhancement funding and severely limited their flexibility.
Do you have a formula for determining when it makes sense to enhance your applications and when it’s better to buy new applications? Tell us about them in an e-mail or share your comments about this topic in a discussion.