secure quorum: the hidden costs of software
DESCRIPTION
When purchasing a software solution for your business, sometimes we tend to stay heavily fixated on the price and everything else is a far second. Many decisions have been made focusing on price and as a result have cost the company more money in the long run. To reduce the risk of paying more, think “Systems” when choosing your software solution.TRANSCRIPT
The Hidden Costs of Software
Gerard Ibarra, PhD
Secure Quorum
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The Effects of Choosing a SaaS solution without Thinking about the System as a Whole
Preface
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Five things that we will cover Systems Thinking System Life Cycle Learning Curve Bathtub Curve Using a Checklist
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We need some background information in order to help us
understand some of the hidden costs found in software
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1st
Think about a system view
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“A system is an assemblage or combination of elements or parts forming a complex or unitary whole such as a river system or transportation system;…”
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(Stein, J., ed., Random House Dictionary of the English Language, New York: Random House Inc., 1966, cited Blanchard, B. S. & Fabrycky, W. J. 1990, p.1.)
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sub system
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system
And you can have even larger and
more complex Systems
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larger system
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HR Company system
s
Look at an Emergency Communication System (ECS)
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ECS: Is defined herein as any system that is organized for the primary purpose of supporting one way and two way communication of emergency messages between both individuals and groups of Individuals (http://en.wikipedia.org/wiki/ Emergency_communication_system).
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2nd
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System Life Cycle
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The life cycle of a system consists of many
phases that are different from system to system. The basis of the total life cycle cost of a system is to recognize the various phases in the system life cycle and to sum them across all phases to obtain the total cost.
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Hazelrigg, G.A. (1996). Systems Engineering: An Approach to Information-Based Design (New Jersey: Prentice Hall), 270.
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Need
Selection
Acquisition
Deployment
Support
Upgrades
Retirement
Replacement
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3rd
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Consider the learning curve
“The time required to produce a unit of output is reduced by a constant factor when the number of units produces is doubled.” “This applies only to when the sequence of activities is continuous.”
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Babcock, D. L. (1996). Managing Engineering and Technology: An Introduction to Management for Engineers (New Jersey: Prentice Hall), 228 and 230.
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Lear
nin
g
Experience
Lear
nin
g
Experience
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Now is NOT the time to figure out how to use your emergency communication System (ECS)
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Lear
nin
g
Experience
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4th
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Do not forget the bathtub curve
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Failu
re R
ate
Time
l
Burn In Useful Life Wear Out
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5th
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Finance & Accounting will be impressed
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True costs of software
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“Too often we become fixated on the technical performance to meet the customer’s expectations without worrying about the downstream costs that contribute to the total LCCs of a system.”
((Farr, J.V. (2012). Life Cycle Cost Considerations for Complex Systems. Systems Engineering – Practice and Theory, Prof. Boris Cogan (Ed.), pp. 127-128, ISBN: 978-953-51-0322-6, InTech).
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Given is the Purchase Price
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Not so clear Product Research Request for Information (RFI) Request for Proposal (RFP) Legal Review: MSA, SOW and SLA Integration
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More hidden costs
Training Learning Implementation
Support Maintenance Re-Certification
Litigation Down-time
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And there is more… Reliability Changing Requirements Subcontracting Software & Hardware Updates
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Getting it right
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1. Systems Thinking 2. Life Cycle 3. Learning Curve 4. Bathtub Curve
5. Checklist
Purchase Price
Research
RFI and RFP
MSA, SOW & SLA
Integration
Training
Learning
Implementation
Support
Maintenance
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Re-Certification
Litigation
Downtime
Closed/Lost
Business
Reliability
Changing
Requirements
Subcontracting
Software &
Hardware Updates
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You can see a video of this presentation at: http://bit.ly/135sKFc.
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To learn more about our other webinars on Systems Thinking or How to Choose the Right Software, visit our contact page at www.securequorum.com.
Thank You
Gerard Ibarra, PhD
Secure Quorum
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www.securequorum.com