Infosys’ blog on industry solutions, trends, business process transformation and global implementation in Oracle.

« An Agile way of implementing ERP on Oracle Cloud | Main | Digital Marketing: Keeping Up with the Fast-moving World! »

Dummies Guide for Enterprise Application Selection

If we delve into the history of software applications, it started with building applications for meeting the requirements of the organizations by writing code from scratch. This is what we call in today's term Custom Development of Applications. Over decades, the approach to deploy Enterprise Applications has evolved, not just on technologies but with respect to how they are built, distributed and deployed.

If we categorize the options available with the customers today with respect to Enterprise Applications, there are 3 broad categories into which we can put these applications into the following:

1. Custom Developed Applications: These applications are built taking into account all the detailed requirements provided by the business users. 

2. Commercial Off-The-Shelf Applications (COTS): Applications that are developed by Software Product Vendors and are distributed for use by purchasing licenses. COTS applications typically allow implementation of business processes by way of configurations

3. Open Source Applications: Open Source applications are developed by way of Crowd-Sourcing, distributed free of cost with license to modify source code and redistribute.

Analysis of Different Options:

Custom Developed Application:     

Advantages

Disadvantages

Completely fulfil the needs of the business requirements

Time to develop is very high

Incur costs and efforts only for what you want

Expensive to develop

Highly extensible, both in solution and sizing to meet future requirements

High Maintenance costs

More value proposition to the business

Industry best practices may not be incorporated

Easier to adopt for end users

Application not scalable - Difficult to update technological stack

No commitment of license costs (fixed and recurring) to vendors

Risks with scalability is borne by the organization

Relatively, quicker realization of ROI

Highly dependent on the group's vision who provided the requirements

 

Because of specific processes designed, changes are difficult to incorporate

 Commercial Off-The-Shelf (COTS) Application

Advantages

Disadvantages

Rapid Implementation of pre-built software

Less Customizable - Businesses need to change certain business processes to be in line with processes in COTS system

COTS applications are typically built around by incorporating Industry Best Practices

Cost and Risk of customization to be borne by the organization

Cost of Support and Maintenance is generally less

Customizations become redundant and need retro-fitment with upgrades

Lower Cost for Upgrades and New Features

Changing COTS application not economically viable. Not easy to port the software to new Product

Legislative changes are typically rolled out as new features by Product vendor

Higher efforts and cost for Organization Change Management

 

Risk of de-supporting of COTS version resulting in forced upgrade and customization retrofit

 Open Source Applications

Advantages

Disadvantages

Rapid Implementation of pre-built software

Very difficult to customize because of niche technology

Incorporates Industry Best Practices

Cost and Risk of customization to be borne by the organization

Negligible or No License Costs upfront

Personnel with required technical expertise not easy to find

Lesser dependency on software vendor for doing code changes as business has access to modify source code

Substantial cost for Support and Maintenance. Support vendors are available however they come at premium cost.

Strong User Community and Forums for collaborations

No assurance on Upgrades and New Features

 

Questions on Long Term Viability of the application due to no corporate ownership

 

Online Collaboration may not always help in providing resolutions as there is no binding commitment to any contributor

 

Key Considerations in Decision Making of Selection of I.T. Enablement Approach:

Based on Process Fitment and Timelines:

An organization should consider

A. For Core Business Processes (Operations, Finance, Sales and Marketing, etc.):

i. Select COTS if

1. Customization efforts are less than 20 % of project efforts

2. High degree of product fitment to organization's business processes

3. OCM is easy to implement

4. Lower timelines for implementation, including customizations

ii. Opt for Custom Development if

1. Very low fitment to available COTS products

2. OCM is difficult and/or time consuming

3. Development and Implementation timelines are not very aggressive

iii. Select Open Source Applications if

1. Very high degree of fitment to available Open Source application resulting into no or minimal customizations

2. Aggressive timelines for implementation

B. For Ancillary Processes (Standalone functions that do not impact business processes but are required as part of overall organization management like Office Productivity tools, Document Management, etc.)

i. Select Open source where ever possible

ii. If Open Source is not available then for COTS

iii. If none of the above 2 available go for Custom Development

Based on evaluation of Total Cost of Ownership

      1. License Fee
      2. Maintenance and Support Costs
      3. Development Cost ( for custom development )
      4. Cost to support Custom development ( in  house or service provider)
      5. Costs of Upgrade
      6. Cost of Infrastructure
      7. Cost for executing Organization Change Management

An organization should consider a healthy and appropriate mix of above 2 options.

CONCLUSION

In order to arrive at the final solution for any organization should consider for each of the Business process:

1.TCO

2.OCM

3.Integration cost among the different solutions.

4.Maintainability

5.Time to Implement

Deciding on the solution is a process having long term implication on organization ability to support the business without burning hole in pocket. Always go for the solution easy to migrate and having a lower TCO.

Now that we know the considerations for selection of appropriate technologies, it is also equally important to understand and evaluate various deployment options which will be covered in a separate blog soon. (P.S. - Click here for the blog on Deployment Options)

Authors:

Ravindra Kumar Deshmukh                                                        Shrikant Shrinivas Shenoy

Principal Consultant - Oracle Practice                                        Principal Consultant - Oracle Practice

Infosys Limited, Pune. India                                                         Infosys Limited, Pune. India

 


Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Please key in the two words you see in the box to validate your identity as an authentic user and reduce spam.

Subscribe to this blog's feed

Follow us on

Blogger Profiles