Local systems house and software developer, MIP Holdings has been honoured in the global Computerworld Honors Program as a world leader in providing IT services according to its risk-based billing model.
The Computerworld Honors brings together the executive officers of the world`s foremost information technology companies with the world`s leading universities, libraries and research institutions to document the global information technology revolution. The programme is dedicated to identifying the men and women, organisations and institutions, that are leading this revolution and to recording the impact of their achievements on society.
The programme has been cataloguing examples of how IT is being used to benefit society for the past 15 years. It contains a total of 4 000 case studies collected from companies in 35 countries thinking and delivering out of the box. The list is designed to archive the changes and advances made in IT for future historians and as a research tool for companies of all sizes that need help in discovering ideas to assist them in addressing the technology problems and challenges they face.
Over the course of each year, members of the chairmen`s committee identify those organisations whose use of IT has been especially noteworthy for the originality of its conception, the breadth of its vision, and the significance of its benefit to society.
This year, MIP Holdings has been selected to provide a case study reflecting its achievements with its Risk-Based Billing model of software distribution.
"Corporate software buyers have become accustomed to making large payments for software, followed by larger payments for implementation services and then being forced to pay regular upgrade and maintenance fees, all without a single guarantee - except the guarantee of more bills in the future from the software developer," says Richard Firth, CEO of MIP.
In response MIP developed risk-based billing as a model of IT services provision. Firth says that this model shares the risk between customer and IT provider. It introduces the concept of fairness into the IT arena for the first time, ensuring that both parties win when technology behaves as it should or both feel the pain when something goes wrong. "From a customer perspective, risk-based billing provides a guarantee that the service provider understands the customer`s business and technology needs and meets exactly these needs through the provision of IT as a service," explains Firth.
More than merely providing applications to customers, MIP`s risk-based billing sees the provider taking over the customer`s IT function and staff completely, leaving only a CIO-level IT employee in place within the company representing the business in IT matters. Unlike traditional outsourcing arrangements, the customer`s hardware remains on site where it is managed by MIP staff. There are no surprise charges for hardware, software, networking or services the client will have to face, simply a monthly fee for the duration of the deal (typically five years).
The success of this approach in the South African market persuaded Progress Software SA MD Rick Parry to expose it to Progress headquarters in the US. It was adopted there to become Progress`s model of software as a service. In terms of this, applications are not paid for on a one-off basis, but through annual payments.
"Software as a service provides users with full use of an application for a set cost per annum," explains Rick Parry, MD of Progress Software SA. "Included in this fee are all updates and maintenance done on the software over the period.
"MIP has demonstrated highly innovative thinking in creating a software model that provides measurable benefits to both parties," adds Parry. "This model has proven so successful it has made South Africa Progress`s top source of revenue for software as a service, contributing over 50% of the company`s annual revenue.
"In addition, risk-based billing is being integrated back into the Progress software as a service model, which has resulted in MIP being nominated for the Computerworld Honors Program."
MIP`s risk-based billing has been designed to provide a win-win outsourcing partnership. The customer loses the problems of constantly looking after its technical infrastructure and can focus on improving revenues and profits with the support of the technology service provided. MIP, or any service provider, is assured of an annuity income as long as it supplies the service according to the SLA.
The Computerworld Honors Program`s acknowledgement of MIP`s risk-based billing model is yet another feather in this local company`s cap. It serves as an example to other IT service providers and as a reference point for users looking for better IT solutions. Not only is MIP showing that a company of 150 people is capable of setting a global example; it also serves as a beacon of what other South African IT companies can achieve if they focus on quality and delivery beyond the norm.
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