Making the Right Enterprise Information Decisions

Dennis Cromwell Associate Vice President Enterprise Infrastructure

May 24, 2007dcromwel@iu.edu

Copyright Dennis Cromwell, 2007. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the

author.

Session Topics

• Buy vs. Build Decision• Promise and Reality of ERP • Community Source • What’s the answer?

Gartner Group CIO OutlookThoughts of the Corporate

CIO• CIO budgets across all industries will

increase near 3%• Total IT spending will increase near 5%• Recommendation - Create a track

record for creating business value

• Question – How does institutional buying power compare?

Buy vs. BuildConventional Wisdom

• Build – Applications that give you a strategic/competitive advantage

• Buy – Anything else

This is an age old conventional wisdom. What is strategic? What is a business differentiator?

If it is not strategic then the business models that the software supports are also not strategic and are subject to change and commonality.

Build vs Buy

• Unique needs• Control destiny• Cost – In some

cases• Customization• Control pace• Push frontiers• Meet cultures• Maybe better

integration

• Cost – in some cases• New processes• Best practices• Drive change• Complete refresh of

process and/or technology

• Hardened product• Implementation time • Staff – Leveraging

expertise • User communities• Support • Maintenance

Build it Buy it

ERP – A different kind of buy

“But the companies that have the biggest problems – the kind of problems that can lead to disaster – are those that install an ES (enterprise system) without thinking through its full business implications”

• People don’t like to change, and ERP asks them to change how they do their jobs….The software is less important than the changes companies make in the ways that they should do business. “

Davenport – HBR 1998 Koch – 2006

The ERP Promise

• Integrated solutions will unlock data • End-to-end tight integration of business

process• Administrative systems are not

strategic• Refocus central IT staff to important

problems• Save money over the life of the system

(implement vanilla)

The ERP Reality• Lack of data warehouse and reporting makes access

to information worse • Best practice turns out to be difficult to define and

nothing is unique• It takes more IT staff to manage ERP than legacy

system• Upgrades are disruptive and expensive • Total Cost of Ownership is high • Very complex• Security is not a good match – for some• It addresses back office and not outwardly focused• Big Cultural Shift

Looking for a better model

CommunitySourceProjects

PartneringOrganizations

LicensingFees

MaintenanceFees

CommercialCoordination

Closed IP

Bundled IP & Support

StakeholderCoordination

Open IP

Unbundled IP & Support + Commercial Support Options

CreatingSoftware

SustainingSoftware

Source: [ Wheeler,4]

Hey Kids, Let’s Become a Software Developer

Be honest, how many of you have thought of Community Source in this fashion?

Community Source

“Institutional Investmentsfor Institutional Outcomes”

“Community source describes a model for the purposeful coordinating of work in a community. It is based on many of the principles of open source development efforts, but community source efforts rely more explicitly on defined roles, responsibilities, and funded commitments by community members than some open source development models.”

www.sakaiproject.org

Source: [ Wheeler,5]

Community Source The Basics

1. Pooled investments2. Strong board3. Tendered resource to the project4. Strong team and leaders5. Semi-benevolent tech dictator6. Sustainability in organization

Source: [ Wheeler,4]

Community Source Killer Items

1. Licensing issues2. Reduced commitment3. Failed governance

Source: [ Wheeler,4]

Community Source• Functionality of Systems

• integration, standards…innovation

• Cost of Systems • operations, maintenance, timing, evolution

• Time to Deliver

Chandler/Westwood

Source: [ Wheeler,5]

Licensing IssuesBirkenstocks and Wingtips

“Copy Left”– GNU model Open/Open – BSD Model

Source: [Gandel and Wheeler]

What is the answer?

Beware of Silver Bullets

• Compilers• CASE • Third generation languages• Objects are nearer than they

appear• ERP• Software as a Service

SOAService Oriented

Architecture What is SOA? • SOA is a programming or deployment

methodology . (SO)• Also, a description of the way an enterprise

addresses its application portfolio (A)• It requires reuse and a reuse discipline (some say

governance)• A governance model would place architecture as

the role of central IT and it requires centralization. • If you cannot resolve what department code to

use in your applications (or building code, etc.) then it will be difficult to be successful with SOA.

Silver Buckshot

What do we do? Staffing

This is a challenge. Location and competition for talent plays comes into play, but some things to consider

Build HE skills for your institution, reward institutional knowledge.

Build generalist who are not afraid to reuse Avoid the not invented here syndrome

Bring some deep technical expertise use consultants sparingly.

What do we do? – Buy

• Clear ROI• Focus and support our business • Demand more from our vendors'

– Cost of upgrades– Support for integration– Not sold here syndrome

What do we do? Build together

Community Source is important – support it

Look for projects that minimize the riskDon’t be afraid to use without

contribution

Snazzy Conclusion

Copyright Information

Copyright Dennis Cromwell, 2007. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-

commercial, educational purposes, provided that this copyright statement appears on the

reproduced materials and notice is given that the copying is by permission of the author. To

disseminate otherwise or to republish requires written permission from the author.

References1. Gartner Inc. The Gartner Scenario 2006: The Current State and

Future Direction of IT. October 27, 2006 2. Gandel, Paul B.  and Wheeler, Bradley C. Of Birkenstocks and

Wingtips: Open Source Licenses.  EDUCAUSE Review.  January/February 2005. http://www.educause.edu/ir/library/pdf/ERM0517.pdf

3. Davenport, Thomas H. (1998) Putting the Enterprise into the Enterprise System.” Harvard Business Review July-August 1998.

4. Koch, Christopher (2006) The ABCs of ERP . January 10, 2006. http://www.cio.com/research/erp/edit.erpbasics.html

5. Wheeler, Bradley C. (2004) Code, Coordination, and Community.  Open Source Summit. Phoenix, AZ.  http://wheeler.kelley.indiana.edu/pdfs/Code-Coordination-Community.ppt

6. Hardin, Joseph and Mitra, Amitava (2005) Sakai – The Road Ahead.  EDUCAUSE Orlando, FL.  www.educause.edu/ir/library/powerpoint/EDU05250.pps.