Tuesday’s Tip: Vendor Selection - Deciphering Vendor Provided Customer References

As competition intensifies for new license deals and users are under pressure to be cautious with new spending, all parties should expect increasing pressure for quality customer references. Customers seeking references should focus on the following areas of relevance:

• Industry - expect to get down to the micro vertical level

• Market size - focus on number of employees and revenues
• Geographical - address local as well as global requirements
• Role - consider individuals in similar roles or account for different roles for a different perspective

Its customary for the vendor to provide their reference lists. Keep in mind, many of these references are receiving monetary and non-monetary favors for their time. For vendor supplied references, customers should ask seven key questions to gauge the motive and incentives of these references:

1. Did your organization conduct an open vendor selection process?
2. If you were not representing this vendor, which product would your organization have purchased?
3. Is your organization part of a vendor specific reference program?
4. Are you earning points or credits for other vendor related services such as training, conference passes, professional services, etc.?
5. Does your organization receive prioritized functionality requests?
6. Who is your executive sponsor? Is that person available to regular customers?
7. Have you received travel compensation for today’s activities?

The bottom line.

As an industry analyst, we often encounter vendor references that are genuine. However, from time to time, we have had to deal with vendor provided customer references who have vested and biased interests. In one MDM related example, 3 out of 5 of the vendor’s references did not conduct an open vendor selection process. 2 out of 5 vendors told us that the product was working well even though we had received inquiries to the contrary from other parts of their organization. It pays to do your due diligence. Make sure you understand what incentives and motivations are driving the reference to spend time talking with you.

Your POV.

Have you had a great vendor reference only to find out that the reference had stretched the truth? Feel free to share with me your experience. You can post here or send me a private email to rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.

Tuesday’s Tip: SaaS - Integration Advice

Continued interest in software as a service (SaaS) stems from the pay as you go pricing, constant stream of innovation, rapid deployment options, and the ability to do an end run around IT. As the number of options proliferate, enterprises will increasingly lean on SaaS as the mission critical system. Thus, end users need an enterprise apps strategy for SaaS that addresses the "I" word - Integration. The requirements and leadership for integration will lead to the pragmatic realization that SaaS can no longer be ignored by the IT department. As organizations brace for the proliferation of SaaS procurements integration should focus on:

• Data mapping - as data moves from one system to another, data must be transformed accurately. More importanlty, service and related metadata are cataloged into a repository for discovery by management tools and development tools.
• Business process orchestration - granularity of web services must be harmonized so that the overall process flow is seamless among various systems. Integration services actively manage service access, execution and quality of service.
• Quality of service - Like SOA, QoS metrics ensure that the information flow was delivered to the right system at the right time for the right person. Characteristics such as security, transactions, performance, style of service interaction, etc. are explicitly identified and specified for each service

A few key solutions providers to watch out for in the SaaS integration space include:

• Blue Wolf Group - a system integrator with an Integration as a Service (IaaS) offering
• Boomi - a SaaS integration layer services company
• Cast Iron Systems - a software based integration appliance (i.e. hardware)
• Informatica - a data integration provider with a multi-tenant, cross-enterprise data integration on-demand service
• Magic Software - a business and process integration provider
  
• Pervasive- a data integration provider with an Integration as a Service (IaaS) offering
• Snap Logic - an open source data integration tool provider

The bottom line.

The successful adoption of SaaS solutions will transform usage from purpose built point solutions to integration into mission critical processes. The result - SaaS integration will emerge as a key discipline in the overall enterprise app strategies of enterprises who seek to manage a portfolio of provisioned services.

Your POV.

Have you completed a successful SaaS to on-premise integration? How'd it go? Was it easier/harder than your on-premise integrations? Feel free to share with me your view points. You can post here or sending me a private email to rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.

Tuesday’s Tip: Packaged Apps Strategy - Building Blocks for a Recession Proof Apps Strategy

The tightening credit crisis continues to impact IT budgets and 2009 planning assumptions. Ongoing conversations with clients confirm that most enterprises anticipate some retrenchment of budgets. As business and IT teams seek to reduce the cost of existing systems, several key enterprise packaged app strategies rise in importance:

• Software contract reviews - leading clients invest time in reviewing existing contracts for new opportunities to reduce costs, anticipate business model flexibility, and contain overall vendor lock-in.
• Vendor rationalization without lock-in risk - now may be the right time to identify vendors core to the overall business strategy and build stronger long term partnerships. On the other hand, vendors who have tried to raise prices or failed to deliver as a technology partner should be weaned off approve vendor lists, especially if you risk vendor lock in.
• Shared services deployment - enterprises with multiple divisions and business units are looking at shared services to drive further efficiency by eliminating duplicate software, infrastructure, and staffing.
• Project portfolio analysis - clients are looking to “stop feeding the beast” and reduce the overall spend for legacy systems while freeing up the remaining budget for new innovation. Leading clients deploy application scoring and ranking methodologies.

The bottom line.

As you begin the planning of your recession proof packaged apps strategy, leverage a long term apps strategy frameworks to assess people management and organizational alignment, business process definition and optimization planning, technology strategy planning, and solution centric ecosystem maturity. Keep in context the 4 major business drivers from efficiency, regulatory compliance, growth, and strategy.

Your POV.

Got a strategy, lessons learned, or success story to share? Post here or send a private email to rwang0@gmail.com. If I use it, I’ll send you a copy of one of our Long Term Packaged Apps Strategy reports. Look forward to hearing your thoughts!

Copyright © 2008 R Wang. All rights reserved.

Monday’s Musings: Adoption of SaaS Models May Accelerate with Economic Downturn

All signs lead to an impending slow down in economic spending. Whether this will adversely impact IT budgets is not the issue, but how much will the carnage be is the concern being debated. Regardless, overall funding for new investments appears to be bleak which is why innovative business leaders seeking to fund innovation without significant capital outlays will most likely gravitate to alternative deployment options such as Software as a Service (SaaS) or other OnDemand models because of:

• Subscription billing - why worry about the cumbersome capital expenditure budgeting process when you can sneak this in with operational expenses?
• Rapid deployment - avoid the headaches of complicated deployments, the expense of system integration, and the cost of maintaining a data center.
• Affordable constant innovation - avoid the cost and disruption of upgrades while receiving more frequent delivery of new features and innovation.
• Purpose built functionality - most SaaS offerings are designed for a specific industry, role, or market segment. The result - strong capability in micro-verticals and other purpose built scenarios.

The hallmarks of SaaS are hard to ignore, especially during the advent of an economic slow down. Based on some of the growth rates in the previous quarter, vendors like Amitive, Concur, Intuit, NetSuite, Plexus, SalesForce.com, SuccessFactors, Taleo, and Zoho may have the leg up.

Your POV

Look forward to hearing your comments about how on-premise vendors will fare compared to the SaaS vendors. If you’ve got an idea or suggestion to share, please comment or send a private email to rwang0@gmail.com. Look forward to hearing your thoughts!

Copyright © 2008 R Wang. All rights reserved.

Apps Strategy: Now's the Time to Design a 5-Year Packaged App Strategy

What do ERP fatigue, instance consolidation, upgrades, SaaS, third party-maintenance, and BPO have in common? They are all stop-gap measures in addressing the key issue of having a long-term apps strategy.

Some key areas to consider include:

• Most packaged apps were bought in the mid to late 1990's
• Software lifecycle is about 7 to 10 years and we are entering a new upgrade replacement cycle
• Large demand for small projects skirt the real issue of a need for a packaged application strategy
• Architectural renewal via SOA and adoption of Web 2.0 functionality driving interest

As we move into one of the biggest upgrade cycles in a decade, enterprises should take the time to design a top-down view of their apps strategy before committing project budgets. A high-level view of the key components of this strategy include:

• Long term vendor strategy and management
• Packaged applications internal inventory
  
• Maintenance and support schedules
• Upgrade strategy
• Instance consolidation strategy
• Deployment option analysis (SaaS, Hosting, BPO, or On-premise)
  
• Change management readiness
• Business process maturity
• Custom development requirements
• Hardware/data center migration plan
  

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved