a free monthly briefing on the knowledge agenda
|No. 58||February 2002|
What Price Enterprise Systems?
Something that never ceases to amaze me is the apparently high price that is charged for so-called 'enterprise' systems. Over the last few years there has been a convergence of various kinds of software into suites that are variously called portal systems, content management systems and knowledge management suites. Coming from different heritages (Search, web development, document management etc.) these suites now boast an impressive array of components:
To make these components all work together, vendors build them with standard interfaces e.g. to ODBC compliant databases, and usually provide a wide range of import/export facilities. Behind the scenes they convert various data formats, generate indexes and hold metadata repositories. They are enterprise-wide when connected though a corporate network and users from any location can access the functions and information for which they have access privileges.
However, even a basic implementation of such an enterprise suite is likely to cost $250,000, and the typical bill where several thousand employees are users is likely to be several millions. In the context of a KM programme which might cost several times that, and where potential savings can exceed $10 million a year, it might seem small beer. But are these enterprise systems really worth the price premiums they command?
You Get What You Pay For
One argument is that you get what you pay for:
What is often not said, and I suspect accounts for a significant portion of the price, is that you also pay for:
However, does everyone need all these extras, and what are they really worth to you?
The Alternative View
My own experience, especially in the field of CM/KM software which is evolving fast, is that many so called 'industrial strength' systems are as prone to problems as any other type of software once you stretch them beyond very basic functions. Problems with interfaces, upgrades to certain modules that affect older modules you have installed, idiosyncratic data entry inconsistent with commonly used methods, and many other things that can go wrong do. The problems are compounded by the fact that you may have used a systems integrator, thereby opening up the opportunity for two vendors to blame each other for problems. Also, your route to the developers is often far from direct - going through layers of software support specialists who probably do not use the system as intensively as you do.
Here are some other things to think about:
If you shop around, and are prepared to take a risk with a less known supplier, or one that specializes in a given functionality niche, you really can find solutions (albeit not as comprehensive) that are a fraction of the typical enterprise solution. To give you two examples:
Ektron (http://www.ektron.com) - provides a fairly robust content management system with workflow, database etc. that works with Microsoft ASP or Cold Fusion server for only $495. Even their enterprise version costs only some $25,000 compared to enterprise CM systems that perhaps have only 10 per cent more functionality and cost $150,000 plus.
Companion (http://www.companion.nl) - if you simply want to build web pages quicker and smarter, then this relatively unknown Dutch product allows you to build pages from components, either static pages in your own PC or dynamic ones on a server from an Access database. Price: $250.
So Is The Difference Worth It?
Although many corporate buyers may have ambitions to have enterprise-wide software, the reality is that many enterprises are pockets of smaller (team and division) initiatives. Often, it might just make sense to experiment with low cost interoperable components and grow your enterprise systems from the bottom up. Also a low cost solution for a particular function, such as Sitescape for communities, may be a better investment for the enterprise than the suite solution that does everything averagely well but is best at nothing.
Don't get me wrong. I'm not saying do not invest in an enterprise solution. If it does what you want with minimal tailoring and the cost per person is competitive, it may well be the best for you. However, do think beyond the vendor hype. I've seen some very expensive 'enterprise solutions' that are difficult to use and adapt (considerably adding to user costs), yet at the same time some very effective KM implementations done with much lower cost software (and lower admistrator/user costs).
Whenever you are looking for KM software, just make sure you are really clear about your requirements and options. Be sure about what you are getting for your money, what the associated development and people costs are, the costs of upgrades and annual licencing. Think of ease-of-use and what the training and support bill for users might be. And for your the sake of your company's bank balance, just make sure you have explored the lower cost options.
Whichever route you choose, the system is only one part of the equation. It is the people, processes and management of the knowledge flows that will determine its ultimate success, and whether that success is local or enterprise-wide.
Email: David J. Skyrme
© Copyright, 2002. David Skyrme Associates Limited and Authors - All rights reserved.
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