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Prologue: The Scream
Upgrading software from one version to the next appears like a small step - after all, you're not ripping the stuff out and replacing it, you're just improving it a little bit - but Nextel senior vice president and CIO Dick LeFave finds himself about to step off a precipice with his Oracle ERP software upgrade.
The numeric change - from version 10.7 to 11i - sounds minor, but in this case the numbers and letters lie. "This isn't just doing an upgrade; it's a whole new system," says LeFave. "It's a different design; it's a whole different set of solutions; it's a whole different way of doing business. You may as well start out from scratch."
This is not what LeFave expected. And he's not alone. Denise Quinlan, an assistant vice president and PeopleSoft product manager at Boston-based MFS Investment Management, is still recovering from the sticker shock she got when her ERP vendor quoted her the price for dispatching its consultants to do an upgrade. When Quinlan heard the estimated cost to go from version 7.5 to version 8 - $US490,000 for the HR software and $US872,000 for the financial software - she blurted, "For an upgrade?"
For PeopleSoft's part, a spokeswoman says the price quote was preliminary and that there were no discussions about using MFS staff to reduce costs (see "Vendors: Â'It's Not That Bad'", page 49).
CIOs who have to wield the wrench in these efforts are shocked when they look under the hood of major software upgrades, not just from Oracle and PeopleSoft but from JD Edwards, SAP and Siebel - all the enterprise software vendors - and see that they're facing overhauls, not tune-ups. The CFOs and CEOs who foot the bills for these upgrades are equally nonplussed. They ask questions like, Didn't we just pay millions for this stuff?
Yes. Between $US40 million and $US250 million for an enterprise software system for a Fortune 500 company, according to AMR Research.
And the CFOs and CEOs want to know why they're paying again.
Why It Hurts So Bad
This story focuses on ERP users, but the same problems and advice applies to CRM, supply chain management systems and other major enterprise software products. They have become so complex, so expensive and so integral to business processes that the term upgrade is a misnomer. Enterprise software upgrades can cost up to 30 per cent of the original software installation price, according to Gartner, take more than a year to complete and require companies to revamp their technology infrastructures and business practices. CIOs have to present a strong business case for why, in these difficult economic times, their company should go through the trouble and expense. A tough sell to most corporate boards.
Three factors further complicate the upgrade process.
1: Upgrades are unforgiving when it comes to customisation.
Enterprise software is the one-size-fits-all suit that you tailor to be a 38-short on one side for your manufacturing group and a 54-portly on the other side for your salespeople - along with some extra pockets from other vendors stitched onto the suit. Don't expect the vendors to touch that suit with a 10-foot needle when it comes time to upgrade. It's up to you to redo the customisations and connections with third-party software on the new version. Customisations that need to be carried over from one version of enterprise software to the next are the biggest technology headache and ROI killer that CIOs face in upgrades.
2008 CIO Summit
19th August, 2008 Four Seasons Hotel, Sydney Developed in partnership with CIO Magazine, IDC, INTEP and the CIO Executive Council.
The world of the CIO is extremely complex and diverse. Multiple priorities demand attention and decisions are needed instantly. Individual teams need to be driven towards common goals, and businesses strive to become more mobile, agile and responsive. For CIOs, the challenge never ends.
Every year the CIO Summit identifies what is top of mind for CIOs across Australia and New Zealand, and offers insight for CIO benchmarking and vendor strategic planning alike.
Recent IDC research shows that over 59% of CIO's believe that 'to achieve their business strategies, technology should be used more aggressively than today.'
Join us on August 19th to discover how this is possible with the latest technologies including Virtualisation, Web 2.0, IP Surveillance and Software as a Service (Saas).
Click here for more information.
Please email Denyse_Robertson@idg.com.au for further information.
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CIO Live Podcast #79: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires Part II 05 October, 2007 06:00:00
For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders. - +
CIO Live Podcast #78: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires 28 September, 2007 17:34:25
For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders. - +
CIO Live Podcast #77: Panasonic Speeds Up Trans-Pacific File Transfers, Part III 21 September, 2007 07:00:00
Part three in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance. - +
CIO Live Podcast #76: Panasonic Speeds Up Trans-Pacific File Transfers, Part II 14 September, 2007 07:00:00
Part two in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance. - +
CIO Live Podcast #75: Panasonic Speeds Up Trans-Pacific File Transfers, Part I 07 September, 2007 07:00:05
Part one in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance.
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New Ways to Approach Security in a Web 2.0 World 08 September, 2008 09:32:00
Web 2.0 technologies have ushered in a new age of security threats. Brian Foster, vice president of product management with Symantec, shares his insight on what you need to do to safeguard your company in today's business environmentBusiness isn't what it used to be. - +
Skills for leading a converged security operation 08 September, 2008 12:30:00
The cultural challenges are significant, and the CSO has to lead the way in learning and changing. We spoke with several converged CSOs for their take on building the necessary skills to hold the job.John had a massive challenge to tackle. A former IT security officer at a large bank in New York, he and his wife packed up and moved across the country so he could take on the role of chief security officer with a well-known provider of loans, retail financing, and other credit related products. - +
Information security governance: Centralized vs. distributed 05 September, 2008 10:15:00
Should security policies, procedures and processes be managed within a central body, or distributed at an individual level? You need to find the middle ground.The management of information risk has become a significant topic for all organizations, small and large alike. But for the large, multi-divisional organization, it poses the additional challenge of determining how to deploy an information security governance program among what are often disparate business units. Should the policies, procedures, and processes that define the program be developed and managed within a central, corporate body? Or perhaps responsibility would be better placed at the individual unit level? Is there a workable middle-ground? - +
DNS error brings Sophos antivirus updates to a halt 05 September, 2008 13:40:00
Optus, Internode and Equinix affected among others.A sporadic Domain Name Server (DNS) error has blocked Sophos anti-virus updates around the world. - +
Ouch! Security pros' worst mistakes 04 September, 2008 08:05:00
We've all done regrettable things on the job, but does any valuable wisdom come of it? Four security pros candidly explain their biggest blunders and what they learned in the processIt was a mistake so bad the person who made it asked that his name and company not be mentioned here. Let's call him Frank.
From Indian roadside selling candles to three Australian Business Awards: OCA Group divisions triumph 08 September, 2008 16:46:00
NetSuite First with Native Support for Google Chrome 08 September, 2008 11:07:00
Frost & Sullivan: Soaring Demand For Hosted Web Conferencing Services 08 September, 2008 08:44:00
Viva la Verticals! Key to Vendor Growth is Through Vertical Market Opportunities, Says IDC 05 September, 2008 11:05:00
F-Secure delivers fastest protection in the online world 04 September, 2008 16:50:00
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Dude! You Say I Need an Application-Layer Firewall?!
Proxy firewall technologies have proven time and again to be more secure than “stateful” firewalls. They will also prove to be more secure than “deep inspection” firewalls. High-performance proxy firewalls are available today which are easily capable of handling gigabit-level traffic. Discover more by reading on.
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