The Business Cases for Application Performance Management
January 08, 2015

Gabriel Lowy

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The business cases for Application Performance Management (APM) are customer satisfaction and operational efficiency. When applications run well, companies are better positioned to achieve return on investment (ROI) and risk management objectives.

Business processes can be streamlined or automated. They can be optimized around how to improve employee engagement and customer experience. Meeting or exceeding customer expectations – either through more responsive employees or excellent website interactions – is the key to strong customer relationships and loyalty.

Conversely, poor application performance negatively impacts the business. Employee productivity and morale sinks. They are unable to get their work done in a timely fashion or are hindered in their ability to provide high quality customer service. Trading partners become frustrated and look for alternatives. Most importantly, customer satisfaction plummets, undermining loyalty. The result is missed opportunities, competitive disadvantage and reputational damage.

IT teams that lack sufficient information about the root cause of application issues and poor user experience are plagued by inefficiency. Too much time is spent tracking down the source of performance problems rather than supporting the business.

Cutting Through Complexity to Deliver Consistent End User Experience

Companies are increasingly relying on applications to run all facets of their business. This has made it more important than ever for enterprises to monitor and manage the end user experience across all environments – physical, virtual, cloud, mobile and mainframe.

The greatest barrier to consistently high performance is complexity. Because modern applications have so many connection points between the end user and the data center, performance issues can arise anywhere along the application delivery chain. This becomes more pronounced as users increasingly engage with cloud-based applications that are controlled by service providers. And as more of these apps are accessed by mobile devices that the end user owns, complexity rises further.

The more business processes come to depend on multiple applications and the underlying infrastructure, the more susceptible they are to performance degradation. Failure at any point can turn a satisfied user into a frustrated one. If that user is an employee, productivity drops and so does their engagement. If the end user is a customer, the cost can be much higher in the form of eroded loyalty or lost business.

When application performance or availability issues do arise, end users expect a quick response time to problem resolution from IT, more frequently within minutes. And users will hold IT responsible for application performance – regardless of whether the application resides on premise or in the cloud. It’s no longer good enough for an application to work; it now needs to work to end user expectations.

IT can avoid the pressures of this guessing game by understanding their users and prioritizing the performance of their apps and websites accordingly. They can make sure that the apps that drive the business have the highest availability and reliability. This is the path to consistently meeting or exceeding user expectations.

Application Performance Drives Financial Metrics

As applications increasingly drive the business, APM is strategic and key to end-user engagement and loyalty – both within the enterprise and with customers. A clear linkage has emerged with how improvements in application performance and customer experiences are driving financial benefits. These include reduced costs, higher productivity and new revenue streams. But in order to realize the benefits of satisfied customers, application performance must been stellar – consistently.

CIOs can more closely align with end user objectives and corporate strategy by recognizing their role in employee engagement and customer satisfaction. The right tools can identify root cause of application issues and perform real-time triage to optimize user experience. A proactive approach improves their company’s employee responsiveness to build customer loyalty, increase revenues, and drive operational efficiency.

A more efficient IT team enables businesses to act on operational intelligence gained from a unified APM platform. Improvements have a domino effect across all functional areas of the organization – from sales and marketing to product development, manufacturing and supply chain management. They also help companies strengthen financial management, reduce risk and ensure adherence with governance, regulatory and compliance requirements.

To meet end user expectations, IT teams need to adapt a more holistic approach to performance management and decision analytics. Through best practices, they can help their companies leverage IT investments to discover, interpret and respond to the myriad events that impact their operations, security, compliance and competitiveness.

Gabriel Lowy is the founder of TechTonics Advisors, a research-first investor relations consultancy that helps technology companies maximize value for all stakeholders by bridging vision, strategy, product portfolio and markets with analysts and investors
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