QuickREAD

— August 9, 2006

Offshoring Isn't Working, and Loss of Local Control Is One Reason Why
Offshore IT outsourcing is indeed reaching a plateau—and that's a good thing. Contrary to what the large IT offshoring contractors and service providers would have us believe, lawsuits and problems tell a different story. All one need do is look at the $6 million breach-of-contract suit filed by Sprint/Nextel against IBM in May, or the case pending between Sears Holdings Corp. and Computer Sciences Corp. on a contract worth $1.6 billion. Offshoring isn't working. One major drawback is that customer service suffers when it's not carefully controlled and monitored locally.
Source: Optimize, http://optimizemag.com/

The Government Wants Your Company's Data. What Do You Do Now?
The U.S. government has over 30 data mining projects that use private-sector data. And while last year the departments of Justice and Homeland Security spent more than $25m to purchase commercial records from data brokers such as ChoicePoint and LexisNexis, more often than not investigators get the data they want directly from companies.
As the CIO, you are in charge of your company's data. Therefore it is up to you to indemnify your company against legal liability by following the proper procedures when an investigator wants your data. The first rule, says Behnam Dayanim, a partner with the law firm Paul, Hastings, Janofsky & Walker, is to take every request to the corporate counsel's office. "You have to get a court order," he says, or else you may be violating your company's privacy policy. Also, it is important to make sure that you comply with the request in the order and don't give more than you are asked for.
Dayanim says that unless a company has a dedicated staffer to deal with requests from law enforcement (many telecommunications companies do, for example), investigators will most likely contact you through a letter addressed to a vague title like IT manager, or will call a junior-level database administrator directly. It is your responsibility to train your staff so they know that all requests must go through the legal department. "I think you have to hit people over the head with it," says Dayanim. "Most people's response is to cooperate, but it exposes the company to a tremendous amount of legal liability. It puts the company at risk."
Source: CIO, http://www.cio.com/

What Would Yogi Berra Say About On-Demand CRM Solutions?
On-demand, is not a particularly radical new approach to software. In fact, in some respects, it closely resembles the timesharing architecture that prevailed in the 1970s. Regarding it for what it really is, a software delivery model, creates the proper framework in which to evaluate whether it is a good solution for your business needs. It's important to assess your business goals and objectives against the capabilities of the CRM solutions you're evaluating, regardless of whether they are delivered using an on-demand or on-premises approach. This will allow you to reach the right decision for your company. As Yogi Berra sagely observed, "You've got to be very careful if you don't know where you're going, because you might not get there."
Source: CRM Buyer, http://crmbuyer.com/

Do You Want Multi-Tenancy SaaS or the Single-Tenancy Model? It's Important to Know This Up Front
Software-as-a-Service (SaaS) vendors offer several different online delivery models, and not all approaches make sense for all application types, or all companies.
Most pure-play SaaS providers support what is called a multi-tenancy model, where one instance of the software and data model is provisioned to multiple customers. This, advocates say, is the key to delivering SaaS benefits such as low cost and scalability. Traditional vendors, on the other hand, argue that a single-tenancy set up (one server and license per customer company) is essential to delivering the high levels of security, integration, and customization that manufacturers require for mission-critical, enterprise applications.
As it turns out, both options have merits, depending upon the application and the manufacturer's needs. Applications that manage extended processes like supplier collaboration, transportation management, or, to some degree, product development, can be good candidates for multi-tenancy SaaS, experts say. But transaction-oriented, internally focused systems like ERP are less compatible with this delivery method, particularly in large enterprises. That's because transaction-oriented applications like ERP often require high levels of security and integration that typically can be better supported in an on-premise or single-tenancy SaaS model, where each application is given its own hardware and database.
Source: Managing Automation, http://www.managingautomation.com/

SaaS Is 'Attractive' Because It Allows Companies to Predict Their Monthly IT Expenses
Customers always want their software bug-free and free of charge. Anything less is a disappointment.
Although free software may never be widespread, when Salesforce.com opened the pricing door a crack with a model different from the standard perpetual-license model—with its huge up-front costs—customers rushed in and flung the door wide open.
The slow and steady transition to SaaS (software-as-a-service) gives the enterprise something else it wants and needs: a fairly stable budget item. The per-user, per-month pricing model is a fixed cost. As such, it allows a company to predict what its expenses are going to be, says Tim Bajarin, chief analyst at Creative Strategies.
Source: CRM Daily, http://www.crm-daily.com/

You Must Be Able to Explain Just What Web Services and SOA Bring to the Party
The allure of easing integration costs and infusing flexibility into rigid monolithic applications is persuading IT shops to flock to Web services and service-oriented architectures (SOA). But soon after committing to use the new integration architectures, many IT managers find themselves searching for ways to justify the cost to top corporate management. "It is very difficult to convey this message to senior executives who don't have a clue what SOA is nor what it brings to the party," said David Berry, senior vice president and CIO at Coty Inc., a cosmetics company in New York. "The only thing they do recognize is the end result."
Source: Computerworld, http://computerworld.com/

Why Is IBM Buying Into Enterprise Application Management Software Business?
Subject to the usual shareholder approval process, IBM has bought itself an enterprise application management software business for $740m. Certainly from an IBM Global Business Services perspective, this deal makes sense. IBM and MRO Software have at least a decade of experience working together on enterprise asset management (EAM) deployments in energy and utilities. MRO's services team also brings best-of-breed asset management and maintenance experience to the table. In terms of technology, the product, which was re-architected as a J2EE compliant service-based platform, meshes well with IBM's overall platform strategy.
Still, one has to ask: what on earth is IBM really doing? This is a company that's taken great pains to position itself as not being in the enterprise application software business. While one can almost rationalize a place for MRO Software within IBM's Tivoli software group (with enough squinting at MRO's recent forays into the IT asset and services management space), the fact remains that MRO Software is first and foremost an EAM application software vendor that actively competes with SAP and Oracle in deals where plant, fleet, and MRO-type maintenance operations are in the mix. In fact, MRO Software is recognized as offering the premier best-of-breed EAM product on the market today. All the squinting in the world isn't going to change that.
Source: AMR Research, http://amrresearch.com/

Research Firm Announces 'Databook' on RFID Use in Retail
Worldwide Research and Markets has announced the addition of Datamonitor's "Retail Technologies: RFID (Databook)" to its offering of publications.
The retail sector is a primary target for RFID technology. Product tracking from warehouse to story and within the store is the key operational winner, but RFID's influence does not end there. The technology has the potential to enable the next generation of retail inventory and merchandising strategies.
The scope of this title:
• Global coverage - regions North America, EMEA, APAC
• Country by country coverage: USA, Canada UK, Germany, France, Spain, Russia, Nordics, Italy, Benelux, Switzerland, China, Taiwan, Japan, India
• Technology coverage: RFID total spend, then by product type: tags, labels, readers, printers, software and services
Research and Markets says the “databook” is a detailed information resource covering historical, current and forecast market revenues on RFID investment by region, country and product / service type.
Source: MoreRFID, http://www.morerfid.com/

A List of Eight Free Open Source ERP Products for Small Enterprises
Sourceforge.net is a repository of free open source software, and a lot of it applies to e-business. The following is a list of eight free enterprise resource planning (ERP) products. One of them might be appropriate for your small business. More information and download links are available from Sourceforge.
Openbravo ERP: "Web based ERP for SMEs, built on proven MVC & MDD framework that facilitates customization & maintenance of code. Already in production, it encompasses a broad range of functionalities such as finance, supply chain, project management, manufacturing & much more."
Neogia: "The ERP solution Neogia leans on OFBiz ERP sturdy technical foundations, a set of technical and business components well known for their high coverage, flexibility and great sturdy. OFBiz Neogia solution covers finance, manufacturing, CRM and e-commerce."
Suniant ERP: "Suniant offers a framework solution for small-medium sized businesses. This solution includes integrated accounting(payable, receivable, general ledger etc), order and inventory management, CRM, payroll, and extensions to add SCM and manufacturing."
Brother Jonathan: "Brother Jonathan is a cross-platform ERP/MRP package coded in PHP, allowing small manufacturers to manage custom jobs. Built on the Zend Framework in an easily extensible manner with modules for quotes, sales orders, purchase orders, and invoices, etc."
University ERP System: "The University environment needs Portal, Student Enrollment, Admission, Semesters, Courses, Exams & Results, Library, Classroom timetable, Online Learning, Bursary of Funds. Source is a combination of Java, Velocity, OfBiz based on Mecca -the Simple/Stupid FW."
Geebis: "Geebis is an easy to use, web based ERP system for small businesses."
WyattERP: "The WyattERP project consists of the Wylib run-time libraries and the Wyseman schema manager. These libraries are tools written in Tcl/Tk that enable a user to quickly code a fully customized ERP (business management software) solution."
microerp: "We describe our microERP project as ERP Software for the rest of us. It is designed as a suite of integrated modules to help you manage and optimize your business processes."
Itrust ERP: "ITrust is an Open Extensible ERP. It provides full core features of ERP and CRM solutions: accounting, customer management, supply chain. It is designed as a suite of integrated modules to help you manage and optimize your business processes."
oxerp: "OXERP is an Open Extensible ERP. It provides full core features of ERP and CRM solutions : accounting, customer management, supply chain. Designed for use out of the box and easy to customize: invoice printing templates, accounting process."
Source: Line 56, http://www.line56.com/

Online Sales to Top $100Bn by End of Year, Research Firm Says
Online consumer spending increased by 20.1 percent in the first of the year, despite sluggish growth in retail in general, a research firm says.
E-commerce sales rose to $80.8bn from $67.2bn during the same period last year, ComScore Networks reports. Non-travel retail increased 24.6 percent from a year ago to $46.1bn, and travel spending rose 14.7 percent to $34.7bn.
"Despite the sluggishness of retail growth in general, online consumer spending remains strong," Gian Fulgoni, chairman and co-founder of ComScore, says.
The double-digit growth rates indicate that online buying has been unaffected by the general economic trends, which show consumers a bit skittish because of higher fuel costs.
"This news certainly bodes well for online retailers for the upcoming holiday season, with online consumer spending expected to reach $24bn in the November through December period," Fulgoni says.
For the full year, ComScore expects online spending overall to reach $170bn, including $102bn in non-travel e-commerce. This year could mark the first time such spending has topped $100bn.
Source: Internet Week, http://internetweek.cmp.com/

Europe's Hazardous-Substances Law Hasn't Creates Some Shortages, But No Parts Buildups
A little over a month into RoHS, things aren't shaping up as expected in the open market.
The industry has long anticipated some kind of imbalance in the supply chain as Europe's Restriction on Hazardous Substances (RoHS) took effective July 1. RoHS-compliant components would suddenly be in short supply, some feared, as the industry switched over to "green" products. Others predicted OEM and EMS companies that aren't going green would stockpile noncompliant components, creating a shortage of leaded devices in the market.
So far, only one RoHS scenario has materialized in the open market: certain RoHS-compliant products became scarce as early as mid-June.
One explanation for this, says John Irving, executive vice president of independent distributor Fusion, is that manufacturers that are currently exempt from RoHS have internal phase-in plans and haven't been scrambling toward the July 1 deadline. This year, their products are mostly green; next year, they'll be completely RoHS-compliant.
Equally surprising, some executives say, is a healthy demand for—and supply of—leaded parts. OEMs and EMS companies that are exempt from RoHS clearly are not stockpiling noncompliant parts as expected. "We don't know of anyone that is stockpiling parts," says Irving.
Source: Electronic Business, http://www.reed-electronics.com/

Most Execs Find It Hard to Measure ROI on IT, and Half Don't Trust Their Own Assessments
CIO Insight magazine says its survey reveals that skepticism about ROI and business value metrics remains high among IT executives.Is that why so many companies don't measure value? Most companies still find it a struggle to measure ROI—in other words, quantify IT's business value in dollars. But whether they measure in dollars or look at other forms of value, about half of respondents, be they IT executives or business executives, say their metrics don't completely capture IT's value, or are skeptical about the accuracy of the numbers.
Source: CIO Insight, http://www.cioinsight.com/

With GPS, Send the Closest Technician to the Trouble Spot
Global positioning system (GPS) technology is becoming less expensive, more integrated, and as a result, more pervasive in the products and services available to your organization. In addition to tracking employee locations through GPS-enabled handhelds and handsets, enterprises can also track vehicle locations through integrated vehicle GPS technology or GPS-enabled mobile computers mounted in vehicles. The benefits of this location information are obvious and dramatic. You can establish a geofence to ensure that vehicles don't travel outside of predetermined destinations. If a field worker deviates from an acceptable travel area, you're alerted instantly. This real-time location information also allows you to better utilize the expertise you have in the field. If a field service call requires a special expertise, you can send the closest tech with the required specific knowledge. Without GPS, the alternative may be to call several techs and check on their locations. Or, you may have to blindly send a tech on a 20-mile drive when other capable techs are located a few blocks away.
Source: Integrated Solutions,
http://integratedsolutionsmag.com/

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How Is Your Supply Chain Performing?
It's getting harder and harder to track the performance of suppliers, carriers and processes that make up a global supply chain. But a few successful companies are addressing the problem.
In the September issue of Global Logistics & Supply Chain Strategies magazine.