The true cost of off-the-shelf applications

Customised apps aren't so bad after all, says Paul M Ingevaldson

In the early days of IT, we would never suggest to users that they should adjust their operations to the requirements of the software we were developing. It was always the other way around. We wrote software so that it worked exactly as the users requested. After all, the users were the clients.

Somewhere along the way, this whole theory changed. It may have started with the rapidly escalating cost of custom development, or with the onset of ERP systems that established best practices across an entire organisation. It may have happened when companies realised that they had outsourced so much of their IT operation that they no longer had competent development staff.

Regardless of the origins of this change, the state of the art today is that users must bend their requirements to conform to off-the-shelf packages. The result: in his controversial article, “IT Doesn’t Matter”, in the Harvard Business Review a few years back, Nicholas Carr told us that, because so many companies use identical software, IT no longer provides any competitive advantage.

Isn’t it ironic that the very systems that promise great value to companies are causing IT to be less strategic? Is this really what business wants?

Misinformed business executives and timid CIOs have allowed these look-alike systems to proliferate. On the surface, it always appears easier to install an outside package and not to have to deal with the problems associated with custom development. Cost over-runs, missed deadlines and unfulfilled expectations are no fun. It’s a lot easier to be wined and dined by the ERP vendors and be convinced that this is the best way to accomplish your objectives.

Unfortunately, IT doesn’t do a good job of explaining to business the shortcomings of these new systems; the hardships encountered when users really need IT to make a strategic change, or the true cost of supporting and implementing off-the-shelf software today and into the future. Ask any CIO about the cost of outside support for one of the major ERP systems.

Perhaps more important is the cost of opportunities lost by using software that everyone else uses. With custom software you can usually accommodate a new requirement at a reasonable cost.

With an off-the-shelf package it’s often impossible. If a strategic initiative can’t be accomplished because of the shortcomings of the packaged system then the cost could be incalculable. This is the true cost of off-the-shelf. You must learn to use the software the same way everyone does.

I wonder if Dell could have developed its logistics system under these constraints?

Call me old-fashioned, but I think there are still opportunities for companies to differentiate themselves through creative approaches to the marketplace that require the development of innovative IT systems.

Perhaps, for example, web services could allow companies to develop more customised software suites than are currently available through local installations of packaged enterprise systems.

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