New IT Application Investment Framework to Help Firms Unlock Millions in Lost Savings: Sapient and Kellogg School of Management Publish Report on Lowering IT Applications Costs to Uncover New Opportunities for Value Creation

Business Wire, Sept 7, 2005

CAMBRIDGE, Mass. -- Most organizations are missing out on their greatest opportunity to create tangible business value through technology, according to a new white paper published by Sapient (NASDAQ: SAPE), a business innovator, and the Kellogg School of Management at Northwestern University. With the average Global 2000 company allocating 75% of its annual operational technology budget annually toward existing applications, executives can no longer afford to write these investments off as untouchable costs. In the paper, "Missing Millions: Unlocking Strategic IT Value," Sapient and the Kellogg School present the Application Investment Management (AIM) framework as a tool to help businesses measure the value of their existing IT portfolios and identify new areas for value creation.

"In a survey of 179 Fortune 1000 firms 44% did not have applications and infrastructure well documented" says Mark Jeffery, associate professor of technology at the Kellogg School of Management. "There is a tremendous opportunity to unlock business value from the IT application portfolio."

Sapient developed the AIM Framework using insights from more than 25 business application planning and IT strategy engagements with its Global 2000 clients. Sapient and the Kellogg School then tested the framework through interviews with multiple market leaders from the energy, telecommunications, and financial services industries, including BP, British Telecom, and Harrah's Entertainment. Feedback and findings from the research revealed that practices put forth in the framework can help companies to create leap-ahead competitive advantages. For example, a leading captive finance firm applied the framework and was able to prioritize its applications investments, identify 49 redundant systems and develop an actionable plan to reduce IT costs by more than 50 percent.

The paper presents the following benefits that companies can achieve by applying the AIM Framework:

--Gain a better understanding of the value, cost and dependencies across the entire applications portfolio

--Identify areas of over- and under-investment in order to focus investments on applications and initiatives that support strategic business goals

--Reallocate non-essential operational spending to new development to fuel innovation and efficiency

--Enhance IT-business alignment on an ongoing basis

--Evaluate enterprise technology for regulatory compliance

--Reduce the risk of outsourcing and offshoring decisions

"As companies build IT capabilities, their infrastructures can become overwhelming, with systems silos and cross-organizational processes. Without the right visibility into their operational technology spending, those making investment decisions favor a 'do no harm' policy, maintaining and extending applications regardless of the value they produce," said Sheldon Monteiro, Sapient vice president. "The AIM Framework provides unprecedented insights into application portfolio complexity and potential value, allowing executives to make more focused investment decisions and uncover new areas for value creation."

"One of our challenges is to drive more efficiencies in our operating costs and reallocate those savings to invest in new capabilities," said Heath Daughtrey, vice president of IT Services, Harrah's Entertainment, one of the companies featured in the paper. "A framework like this helps you rationalize a lot of your sourcing decisions and what you consider your core strategic competencies and your non-core, non-strategic competencies."

Copies of the "Missing Millions" white paper are available on request by visiting http://www.sapient.com/what/whitepaper/.> .

About The Kellogg School of Management

The Kellogg School of Management at Northwestern University was founded in 1908 and is widely recognized as a global leader in graduate management education. The school is home to a renowned, research-based faculty and MBA students from more than 50 countries and six continents. In 2004, BusinessWeek ranked the Kellogg School the number one graduate school of business in the United States, an honor it has achieved a record five times since the biennial survey began in 1988. The Kellogg School has also been named the top MBA program in the world for three consecutive years by the Economist Intelligence Unit, a division of The Economist Group.

About Sapient

Sapient, a business innovator, helps clients achieve extraordinary results from their customer relationships, business operations and technology. Leveraging a unique approach, breakthrough thinking and disciplined execution, Sapient leads its industry in delivering the right business results on time and on budget. Sapient works with clients that are driven to make a difference, including BP, Essent Energy, Harrah's Entertainment, Hilton International, Janus, National Institutes of Health (NIH), Nextel Communications, Sony Electronics, the U.S. Marine Corps, and Verizon.

Founded in 1991, Sapient is headquartered in Cambridge, Massachusetts, and operates across North America, Europe and India. More information about Sapient can be found at www.sapient.com.