Johannesburg, 04 Jun 2004
Software is becoming so commoditised that soon companies will switch it on or off like electricity and pay only for what and when they use it. This is Oracle`s vision for the future of software. At the launch of the company`s Oracle 10g database and application server software in October last year, the company dwelt on the commodity software concept. Oracle also draws a picture of getting the most out of the hardware investment by stringing together low-cost, standard servers to drive high-end transaction-intensive business processes.
With heartening messages such as these, and with ERP software maturing to a point where competitive differentiators among them are minimal, executives are now scratching their heads for the reasons behind the increasing maintenance and integration costs, as well as the staggering cost of skills and manpower to keep their ERP systems going.
Organisations investing in ERP software will see a quicker return on their investment and will keep the on-going maintenance costs lower by aligning business processes as closely as possible to the processes inherent in the ERP software, says Oracle SA`s director for application sales, Mike Coppin. "Keep the software as standard as possible, because once companies start rewriting code into work-arounds and add-ons, the cost goes up, not only in terms of making changes, but having to manage those upgrades and maintenance into the future."
In the past ERP systems have promised to deliver a competitive edge, but the reality is that people deliver a competitive edge, not business processes. "The idea that a company can build a competitive differentiator into its software is a myth," says Coppin.
"Software delivers the benefit of streamlining processes, and supporting companies` efforts to drive down the cost of doing business. It makes sense, then, that companies whose business processes don`t fit in with the software, change their business rather than the software. This may sound arrogant, but the ERP software industry has become commoditised because the software has evolved over the years to embody best business practice, and has matured to a point today where it would not survive the market it if did not incorporate these practices."
"As business executives, rather than IT departments, become more active in making IT decisions, standardisation will become regarded as key to ensuring data integrity, accuracy in reporting, and higher levels of data security. At a management level, standardisation will ease the burden of system administration, integration costs and software maintenance.
Coppin says cost will be the major driver in bringing about sensible software strategies. "If executives are to be held accountable for the information delivered by an organisation`s IT infrastructure, they will want to be sure that these systems can deliver company information that is transparent, accurate and complete. And they will want this at the lowest possible cost of ownership.
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