Packaged Software Business A System Integrator Point of View

Packaged Software Business

A System Integrator Point of View

Accenture –

Company Background

– Accenture

• Traditional consulting

– Accenture Services

• Outsourcing / Application Management

– Accenture Technology Solutions

• Hard core technology knowledge • Mobile lab

• During the last five years Accenture has delivered almost 18.000 projects to over 4000 clients.

• Every fourth hour (on average) an Accenture implemented IT system is taken into productive use.

Business Process Outsourcing Applications Outsourcing IT Infrastructure Outsourcing Business Consulting Systems Integration

Tomas Nyström

• Started studies in HUT in 1991

– Worked part time during studies with programming

– Major in “computer-systems”, minor in “industrial economy” – Master’s Thesis for Nokia about Software Methodology

• Graduated in 1997 and joined Accenture, now with a 7½ year work history consisting of:

– Custom & package delivery experience – Consulting & outsourcing delivery experience – Offshore & onshore delivery experience

– Pre-sales & sales & delivery & maintenance experience – Developer, Team Lead, Architect, Project Manager, Program

Manager experience

– Currently Senior Manager in the Global Architecture and Core Technologies group (GACT) leading a Product Development Offshore engagement.

Definitions

Package

• Ready-to-run

• Configurable

• ?

Custom

• Coding

• ?

Degrees of ”Package”

and ”Custom”

Package

Package

Custom

Custom

Typical Package

Solution Areas

• ERP – Enterprise Resource Planning – Financials

– HR – …

• SCM – Supply Chain Management – Logistics

– Production Planning – Optimization

– …

• CRM – Customer Relationship Management – Sales – Pricing – Customer information – Call centers – … • BI – Business Intelligence • EI – Enterprise Integration • … But it is not always this clear… But it is not always this clear… .. especially if you look under

the hood.. .. especially if you look under

Typical Scenario: What

is Sold vs What is there

A ApplicationApplicationB_B ApplicationApplicationC_C ApplicationApplicationD_D

Technology A

Technology A Tech Technology C_{Technology C} B

Tech B

Business Case for

Package Solutions

• Standardized functionality that fits the need

– Proven track-record equals less risk.

– Core processes are standardized across industries (e.g. Finance). – Industry processes are same across geographies (e.g. Retail). – Legislative impact on some processes force local focus (e.g. HR).

• Time-to-implement

– As the project “only” needs to focus on integration the effort required is less than for a custom projects.

• Cost of implementation

– Licence cost is less than cost of work to achieve equivalent functionality as custom solution due to economies of scale.

• Upgrades

– Maintenance and support available (for a fee). – No need for big internal development organization.

• Skills

– For larger packages experience is available on the market.

Custom Package

Typical Functional

Expectations for a Package

• Provides ”best-practice” functionality

• Allows for configurability through built-in tools

– Organization hierarchies – Chart of accounts

– Workflows

– … and a lot more …

• Is user-friendly to use and has a consistent look

and feel

• Has a proper functional reference explaining the

functionality and more detailed logic of the

application.

Typical Technical

Expectations for a Package

• Provides reporting customization.

• Provides API:s and SDK:s for integration and add-on development. • Provides built in ”hooks” for custom extensions.

• Has built in user management and security (authorization and authentication).

• Some packages provide source code for ”core modifications” while others prefer the ”black box” approach.

• Data storage is usually abstracted and direct DB access is not allowed.

• Performance benchmarking is available to do HW sizing. • Operational best-practices exist.

• Upgradeability is guaranteed.

• Has support for archiving or data retiring.

Typical Issues with

Packages

• Does it really meet the requirements?

– Special purpose needs exist in all organizations. A package project is very much an exercise in self-discipline.

• Temptation to do unsupported changed and thus end-up with potential issues with upgrades.

– Most projects run with a zero change policy. • Resistance of change

– A custom application could be tailored to fit the current situation to a very exact degree. However in most cases the application of “best practice” processes makes sense and is a benefit resulting in e.g.

• Process changes

• New reporting structures formats • New metrics

• IT department resistance

– Especially if current application set is created in-house

Typical Implementation

Scenarios

Support from Package

Vendors

• Support sites with FAQs, knowledge bases,

news groups, documentation, …

• Support function to solve problem issues

• ”Go-live” checks

• Project audits

• Training classes

• Certification

• …

service.sap.com

Market Opportunity

$5 billion new license a year + maintenance fees

Package Integration

Integration is a larger cost than licenses (on average ~10 times)

Accenture Organization

Skill segmentation

Skill segmentation

Market segmentation Market segmentation

E.g. SAP and Oracle skills E.g. CRM and BI skills

Alliances

• Almost all package vendors have Alliances with

systems integrators. The purpose of the alliance is to

create additional sales opportunities on one side and

additional integration opportunities on the other side.

• A typical alliance considers the following:

– Sales alliance

– Exclusivity in a geography and market segment

– Training benefits

– Sales kick-back

– Access to free software

– Access to early-access information

The Future?

• Both custom and package vendors are now turning the attention to processes. This is very much driven by the emergence of service oriented architectures

• The end state will be that package projects will be less package and custom projects less custom.

Thank You for Your

Attention!

Any questions?