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Why it makes sense to use a third party to keep the IT lights on

Keeping operational systems running is a full-time job, but as systems get older, they end up being out of support

CIOs face multiple challenges in keeping operational systems running while also embarking on digital transformation initiatives, according to a report from Nucleus Research for Rimini Street, published last month.

Rebecca Wettemann, an analyst at Nucleus Research, said that while software providers may offer attractive incentives for customers to move from their legacy systems to new cloud applications, “those moves require both financial and resource investment, and potential risk and disruption”.

Nucleus found that many customers are looking at other options, including moving to a more business-driven roadmap that reduces their dependence on their existing software provider to support older products.

“With a major implementation, by the time a corporate is ready to deploy the product, it is already out of support,” said Charles Oldroyd, a Cognos expert who works for third-party support firm Origina.

“IBM and Microsoft will take products out of support to push companies to upgrade,” he added. “A simple Cognos BI implementation could take nine to 12 months and it is nearer two years before it is fully deployed. This is the gap between major product releases.”

As such, businesses often find they are running older versions of the product – and then the countdown clock starts ticking to the time when the product’s official support ends, said Oldroyd.

In his experience, the challenge for many organisations is that their IT infrastructure is built to support the previous version of the product, so it has not been tested on the newest product release. 

For the CIO and IT department, said Oldroyd, “by the time a product is about to be updated, the version deployed is a pretty stable platform”.

Speaking as a Cognos trainer, Oldroyd said: “Between version 10 of Cognos Analytics to version 11, Cognos changed its user interface completely, so users needed retraining.”

Change can be a good thing, he said, but added: “The rate of change in corporates is very slow. Software takes longer to implement and change is incredibly expensive and painful. The workforce is generally more willing to expect inefficiencies, than change – and making a change is no small thing. So companies are quite prepared to hold on to legacy software.”

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In many cases, businesses do not see a direct benefit from upgrading, compared with if they continued to run their existing setup, said Oldroyd.

Nucleus’ research found that customers moving from licence maintenance provided by their enterprise software provider to third-party support are typically able to at least halve their annual support spend.

When it assessed Rimini customers, Nucleus found they were able to save a further 10-15% of IT staff time, on average, associated with eliminating the time needed to review and assess the impact of supplier-driven patches and updates and accelerate the time to resolve issues.

As well as the cost benefits of moving to third-party support, Nucleus found that organisations were also able to take back control of their IT strategy and decide how quickly they wanted to follow their enterprise software provider’s roadmap.

“Companies wanted to gain control of their application lifecycle and cloud migration plans without being constrained by vendor-defined timelines,” Wetterman wrote in the report. “They wanted to reduce both the risk of disruption to the business and the risk that they would move to a new solution that was unproven or not the best fit for their business. Overall, they wanted to ‘future-proof’ their application strategy and define a roadmap for continuous change that was predicated on business needs, not the (sometimes unpredictable) path of dominant vendors.”

Resourcing third-party support

Among the reassurances CIOs will often seek is the ability of the third-party support provider to offer the same level of expertise as their enterprise software provider.

Rimini Street said the support its clients receive includes support for customisations and tax, legal and regulatory updates. Each third-party support customer is assigned a “seasoned primary service engineer (PSE) who has an average of 15 years’ experience in the clients’ enterprise software”, said Rimini Street. 

Origina uses a network of former IBM experts, such as Oldroyd, who work on a contract basis for a particular client. Given that larger businesses will often outsource parts of their IT – particularly legacy IT – to an outsourcer, Oldroyd said he often finds himself in a three-way conversation with the customer and the outsourcer to help them resolve a technical issue.

No matter how much the industry wants organisations to move to the next best platform, enterprise systems take a long time to become stable. Once they are running and delivering business value, there is very little appetite to change, even when the product is no longer supported.

Many systems of record fall into this category. They may not offer the latest technology, but they generally do the job they are designed to do. These systems are described by analyst Gartner as “Mode 1 IT”. The real value to the CIO is the customer-centric systems, called “Mode 2 IT” by Gartner.

As the research from Nucleus found, moving to a third-party support provider enables CIOs to refocus their budget and the overall IT strategy.

Read more on Enterprise resource planning (ERP) software

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