'

Techno-Economics

I haven’t spent much time reading the Economist since I studied the subject for my degree. Somehow chipsets, software and keyboards appealed to me rather more in the long run than the doubtless worthy teachings of Adam Smith, Milton Friedman or John Maynard-Keynes.

I haven’t spent much time reading the Economist since I studied the subject for my degree. Somehow chipsets, software and keyboards appealed to me rather more in the long run than the doubtless worthy teachings of Adam Smith, Milton Friedman or John Maynard-Keynes. However, when I caught sight this week of an Economist Intelligence Unit report sponsored by Oracle I was briefly tempted back into the fold.

Entitled “Corporate software strategies: Maximising value, mitigating risk” - this is a new piece of research that comes up with a very broad macro-level set of ‘revelations’. If you think you might be tempted to have a gander at the sixteen pages therein then here’s a snapshot skim of some highlights that hit you upon first reading.

*** “Maintenance and upgrades are probably the biggest challenges any large organisation faces.”

*** “As the software market continues to consolidate around large vendors that have aggressively acquired smaller vertical-market applications providers, executives worry that moving away from customised applications or traditional best-of-breed strategies will erode price competition, and that feature innovations will ultimately suffer at the hands of fewer players.”

*** “There will always be a need for custom-built applications. In fact, those interviewed for this report agree that using industry-specific software to automate certain business processes can free up internal IT teams to concentrate their efforts on custom-built applications that can create key competitive advantages and market differentiators.”

*** “The more complexity you introduce, the more challenging it is, whether you’re implementing new software or writing it from scratch.” (yes, someone really did get paid for saying that).

So is it a good read? Well yes – but to be honest, it could probably (and you’re going to have to let me say this) do with more from Oracle. They’ve had the experience with all the companies quoted and know the intricacies of technological upgrades and other major issues better than customers like Tesco, Austin Energy, BT or others.

One point that jars is – just how many times can the Standish group charge companies to the come up the following research?

“According to the most recent Chaos study, undertaken by the Standish Group, only slightly more than one-third of the corporate software development projects completed in 2006 were categorised as successful (in that they met objectives, and finished on time and on budget), while one in five were outright failures.”

You don’t say? Really? There must be a fresher way of saying this, or uncovering more research to find out where we’re all going wrong.

The conclusion?

“The benefits of deploying pre-built vertical applications and integration tools extend beyond lower costs, faster deployment, and significantly reduced support and maintenance burdens. They also allow organisations to focus their internal and external development and integration resources more strongly on key applications that facilitate differentiation - the business processes that encapsulate the most valuable intellectual property of a business or government entity.”

So this is the 505-word version – if you want the 5500-word version, you know where to look.