Squeezing Out Value
With a commercial IS department of 15 people plus a process systems group of 10 looking after the process control side, Tomago Aluminium, like many small organisations, has a policy to squeeze as much value as possible out of systems and hardware before upgrading them. In fact, says IT manager Christine Cameron, it has done this to the extent that it now runs almost entirely on unsupported versions of software (SAP, VMS, Unidata, Oracle).
"Our management hates Microsoft's sales strategy with a vengeance as the push to upgrade to current versions in a business our size [1000 employees] is a significant cost," she says. "They see an upgrade as being something which should be driven by business need [for new functionality] rather than by the suppliers' desire for revenue. Historically, we have chosen to upgrade our MS products on a slower cycle than Microsoft advocate [via their new licensing and software assurance programs] and see that this is a viable choice to make. In the past this caused problems with compatibility of documents across versions, but staying with Office 97 has not caused us any issues to date."
Cameron notes that although this is a very good strategy in the short term, staying with it too long takes away the ability to upgrade, as interlinked product versions get out of sync and the upgrade path disappears. "As we are now facing obsolescence declared by HP on some of our servers, the upgrade process will be more of a new implementation than an upgrade and the cost increases substantially as a result. So, while I do support the view that lack of support by a software vendor is not necessarily an imperative to immediately upgrade, finding the right time to go forward is absolutely crucial," Cameron says.
She says as an IT group, Tomago's team is struggling to upgrade its ageing systems to supported versions and to get support for major new systems investments. To achieve this it is working towards a partnership approach with Pechiney Pacific for joint systems, which it believes will move it forward at a faster rate than it can achieve alone.
Related to this, adds Adams, is the fact that many smaller IT shops recognise that giving out single supplier contracts for any area of the business is just plain stupid. "Why let IBM [in Air New Zealand's case] be the sole supplier of desktops? If you always have at least two suppliers of hardware, software, support services, networking and such you can still maintain standards and limit support issues, but you can always keep them keen with the visibility of competition."
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.