March Toward Convergence

By Lawrence Walsh  |  Posted 2008-09-29 Email Print this article Print
 
 
 
 
 
 
 

The results of the Baseline/BTM 500 study show that enterprises that fully integrate business and technology management are more agile, more competitive and potentially more profitable.

March Toward Convergence

Another company that clearly understands the importance of business-technology convergence is Oracle. The world’s second largest software company was built on a highly focused pursuit of business excellence that’s measured in revenue, profitability and performance relative to competition.

Founder Larry Ellison imposed his business vision and applications on the marketplace, even though the market wasn’t always ready for what he peddled. Oracle’s success came because the business drove the use of technology, instead of technology trying to fill an ill-defined void with no strategic direction.

Oracle is one of three companies, along with GM and Verizon, on the Baseline/BTM 500 to achieve a perfect business-technology management score. The database company’s numbers over the last five years speak for themselves. Between 2003 and 2007, Oracle delivered, on average, a 14 percent return on assets each year, 21 percent ROI (return on investment), 22 percent gross revenue growth and 40 percent EBITD (earnings before interest, taxes and depreciation).


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Most amazing is Oracle’s five-year earnings-per-share increase of 21 percent—more than 8 percent higher than its competitive set. And it posted these numbers during a period when it spent billions acquiring major rivals: PeopleSoft ($10 billion), Siebel ($5.8 billion), Hyperion ($3.3 billion) and JD Edwards ($1.8 billion).

Oracle achieved this impressive performance through the convergence of its business-technology governance and by solving one of the most perplexing challenges facing enterprises: responding to change and being the instigator of change. Convergence, in our opinion, is the means to achieve these goals.

A New Concept

A converged business-technology management model is a relatively new concept. The Baseline/BTM 500 assessment model is based on the BTM Framework and Maturity Model (see “Business-Technology Maturity Model,” below), which rates an enterprise’s convergence maturity on five levels (from low to high):

Level 1:

      Initial


Level 2:

      Repeatable


Level 3:

      Defined (at this point, discernible alignment first occurs)


Level 4:

      Managed (the threshold of synchronization)


Level 5:

    Optimizing (convergence)



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Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.
 
 
 
 
 
 

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