1 Recent Trends in Enterprise Information Systems and Application Delivery Models Jiří Voříšek...

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Recent Trends in Enterprise Information Recent Trends in Enterprise Information Systems and Systems and Application Delivery ModelsApplication Delivery Models

Jiří Voříšek

Department of ITUniversity of Economics, Prague

[email protected] nb.vse.cz/~vorisek

© prof. Voříšek© prof. Voříšek 22

AgendaAgenda

Does ICT matterDoes ICT matter?? Is the significance of ICT the same for all industriesIs the significance of ICT the same for all industries?? Enterprise Application Delivery - Historical PerspectiveEnterprise Application Delivery - Historical Perspective Current situation in Enterprise Application DeliveryCurrent situation in Enterprise Application Delivery

• User perspectiveUser perspective• Provider perspectiveProvider perspective

Business and technological factors for changeBusiness and technological factors for change Sourcing variantsSourcing variants Comparison of software license model with ASP modelComparison of software license model with ASP model Prerequisites for efficient deployment of ASP modelPrerequisites for efficient deployment of ASP model Impact on ICT landscape and user organisationsImpact on ICT landscape and user organisations Impact on labour market and ICT educationImpact on labour market and ICT education


Does ICT Matter Does ICT Matter ??

IT doesn’t matter and can’t bring strategic advantage IT doesn’t matter and can’t bring strategic advantage at presentat present • Spend lessSpend less • Follow, don't leadFollow, don't lead • Focus on vulnerabilities, not Focus on vulnerabilities, not on on opportunitiesopportunities

Capital expenditures of US companies to ICT: Capital expenditures of US companies to ICT: 1965 – 5%, 1980 – 15%, 1990 – 30%, 2000 – 50%1965 – 5%, 1980 – 15%, 1990 – 30%, 2000 – 50%

Nicholas CarrNicholas Carr [[CarrCarr, , 20032003]]:: When a resource becomes essential to competition but When a resource becomes essential to competition but

inconsequential to strategy, the risks it creates become more inconsequential to strategy, the risks it creates become more important than the advantages it provides. Think of electricity. Today, important than the advantages it provides. Think of electricity. Today, no company builds its business strategy around its electricity usage, no company builds its business strategy around its electricity usage, but even a brief lapse in supply can be devastatingbut even a brief lapse in supply can be devastating


Does IT Matter Does IT Matter ??

WeWe believe that believe that

Unique Unique alignment of ICTalignment of ICT with business model and with with business model and with business processes and social capital of the enterprise business processes and social capital of the enterprise can bring strategic advantage can bring strategic advantage

Alignment Alignment of of business business procesprocessses es with with ICTICT services will services will be one of the most important requirementsbe one of the most important requirements in the near in the near futurefuture


Case Study 1 Case Study 1 –– Food Sales Food Sales

a small chandlery (several local suppliers, tens of customers per day, personal service)

self-service shop (higher efficiency but loss of customers’ acquaintance)

supermarket (many suppliers from all over the world, pressure to suppliers, hundred thousands of customers, detailed acquaintance of customer and his habit – customer’s card). Qualitative levels of goods ordering: optical check of the racks and manual orderingoptical check of the racks and manual ordering computer monitoring of sales computer monitoring of sales ((bar codebar code))– manual ordering – manual ordering computer monitoring of sales – automated orderingcomputer monitoring of sales – automated ordering direct connection of a supplier into the information system of the seller direct connection of a supplier into the information system of the seller

(the supplier is responsible for the identification of goods delivery time) (the supplier is responsible for the identification of goods delivery time)


Case Study 2Case Study 2„How a capable management changed a florist“„How a capable management changed a florist“

Initial situation Initial situation • a small gardening with a store a small gardening with a store • SWOTSWOT

– (-) a small group of customers (-) a small group of customers

– (-) seasonality of sales (the greenhouses have been cancelled (-) seasonality of sales (the greenhouses have been cancelled because of expensive heating) because of expensive heating)

– (-) limitation to the local flowers (-) limitation to the local flowers

– (+) creative management (owner) (+) creative management (owner)

florist (garden,

store) customers



MMain ideas of a new business strategy ain ideas of a new business strategy • the target to increase multiply the turnover and profit within the target to increase multiply the turnover and profit within

a year period a year period • to use opportunities of the current age – cooperation, to use opportunities of the current age – cooperation,

joining the supply chain, ICT, …joining the supply chain, ICT, …• vision – a new model of business vision – a new model of business

– orders through the Internet orders through the Internet – participation of the customer on creation of bouquet (types of participation of the customer on creation of bouquet (types of

flowers, design of the bouquet, packaging, wish card, place and flowers, design of the bouquet, packaging, wish card, place and time of delivery) time of delivery)

– to offer prepared design of bouquet for less creative customers – to to offer prepared design of bouquet for less creative customers – to hire an external designer hire an external designer

– to cancel the gardening – to buy flowers abroad (Dutch wholesaler)to cancel the gardening – to buy flowers abroad (Dutch wholesaler)– to use an external partner for the deliveries to the customers (Česká to use an external partner for the deliveries to the customers (Česká

pošta, FedEx,...) and for the payments (Bank)pošta, FedEx,...) and for the payments (Bank)



Flowerwholesalers

WWWprovider

Bank

Postal service(Fedex)

Florist(garten, store)

Customers


Is the significance of ICT

the same for all industries?


Different Significance of ICT for Different IndustriesDifferent Significance of ICT for Different Industries (Coonan, H.H. et. all: Building Australian ICT Skills - Report of the ICT skills foresighting working group, Australian Government, Department of (Coonan, H.H. et. all: Building Australian ICT Skills - Report of the ICT skills foresighting working group, Australian Government, Department of

Communications, Information Technology and the Arts., May 2006, ISSN 0 642 75354 7 )Communications, Information Technology and the Arts., May 2006, ISSN 0 642 75354 7 )

Industry ICT Capital Expenditure

Share2003-04

ICT Employment for Industry (Share of total %) 2005

ICT R&D Expenditure Share of Total R&D 2002-03

Mining 3.9% 4,250 (1.3%) 0.2%

Agriculture, forestry and fishing 7.7% 540 (0.16%) *

Transport and storage 15.8% 7,650 (2.3%) 31%

Manufacturing 16.2% 22,390 (6.7%) 16%

Construction 16.3% 12,880 (3.9%) 16%

Retail Trade 21.6% 14,920 (4.5%) 33%

Health and community services 25.5% 6,420 (2%) np

Wholesale trade 26.1% 13,960 (4.2%) 41%

Accommodation, cafes and restaurants 26.6% 380 (0.1%) np

Property and business services 33.6% 124,030 (37.2%) 63%

Personal and other services 35.0% 2,720 (0.8%) np

Government administration and defence 42.0% 25,620 (7.7%) 52%

Education 43.7% 16,300 (4.5%) 83%

Cultural and recreational services 44.4% 6,660 (2%) np

Electricity, gas and water supply 68.4% 9,460 (2.8%) 39%

Communication services 89.1% 42,580 (12.8%) 42%

Finance and insurance 90.1% 22,810 (6.8%) 77%

All industries 26.7% 333,560


Enterprise Application Delivery - Enterprise Application Delivery - Historical PerspectiveHistorical Perspective

1960sData Processing

Bureau

1970-80sIn-house Development

1990sERP Applications

(SW License Model)2005

Application Services(Software-as-a-service,

Utility computing)

The end of 90s-2004Traditional Outsourcing

= !?


Current Situation Current Situation -- User P User Perspectiveerspective

End User Organization:End User Organization:• owns and maintain all ICT infrastructure and associated owns and maintain all ICT infrastructure and associated

HRHR

End UserOrganization

Implementationand ConsultingOrganisations

ERP ApplicationVendor

Traditional software license model:



Cost of IT projectsCost of IT projects• big global banks spend 15-20% of operating budget on big global banks spend 15-20% of operating budget on

IT [Gartner, 2002]IT [Gartner, 2002]• despite long experience many projects significantly despite long experience many projects significantly

exceed their original budgetsexceed their original budgets and planned and planned implementation timeimplementation time

• research of 117 US companies [CW, 2002]:research of 117 US companies [CW, 2002]:– 25% exceeded their budgets25% exceeded their budgets– 20% were abandoned before completion20% were abandoned before completion– 40% failed to achieve business objectives40% failed to achieve business objectives

Traditional model leads to high TCO and is associated Traditional model leads to high TCO and is associated with significant risks with significant risks



Complexity of ERP systemsComplexity of ERP systems • difficult customization difficult customization • high complexity of operation even in situations where high complexity of operation even in situations where

the corresponding business process is simplethe corresponding business process is simple• low utilization of the overall functionality by end userslow utilization of the overall functionality by end users • high cost of training of end users due to complexity of high cost of training of end users due to complexity of

the systems and documentationthe systems and documentation

Increased cost of the ERP solution that Increased cost of the ERP solution that the organizations are no longer willing to bearthe organizations are no longer willing to bear



Fast rate of technology changeFast rate of technology change

• Fast SW obsolescence (? software ownership)Fast SW obsolescence (? software ownership)• New versions of SW released approximately once a New versions of SW released approximately once a

year year –– version management version management (!? (!? costs, integrationcosts, integration))

End-user organizations are unable to absorb new End-user organizations are unable to absorb new technologies at the rate that vendors produce themtechnologies at the rate that vendors produce them

New technologNew technologiesies may not lead to any business benefitmay not lead to any business benefit



High demand on IT specialistsHigh demand on IT specialists

• TTraditional model is associated with high demand on IT raditional model is associated with high demand on IT skillsskills

• Shortage of IT specialistsShortage of IT specialists leads to high costleads to high cost

Many organizations cannot afford to maintain their own Many organizations cannot afford to maintain their own internal IT staffinternal IT staff



The structure of investments leads to unsatisfactory The structure of investments leads to unsatisfactory overhead costs and to low flexibility [Inside, 2002]overhead costs and to low flexibility [Inside, 2002]

Structure of Investments

HW50%

SW31%

Services19%

Structure of Operating Costs

Internal running expences

47%

External services

37%

Communication Costs16%



Traditional outsourcingTraditional outsourcing• Outsourcing organizations often use the same Outsourcing organizations often use the same

implementation approach as end user organizations implementation approach as end user organizations ::

Support individual client organizations using separate Support individual client organizations using separate implementations sites and highly customized implementations sites and highly customized applicationsapplications (1 : 1 (1 : 1 relationrelation))

• Minimal reuse of resources leads to high costs Minimal reuse of resources leads to high costs

Traditional outsourcing does not solve the cost Traditional outsourcing does not solve the cost of of ownership problemownership problem

((Coca-Cola AmatilCoca-Cola Amatil))


Current Situation Current Situation -- Provider P Provider Perspectiveerspective

Sales of new licenses for enterprise application software have stagnated and in some cases declined

rok 1999rok 1999 rok 2003rok 2003

LicenceLicence SupportSupport LicenceLicence SupportSupport

OracleOracle 41%41% 27%27% 34%34% 44%44%

PeopleSoftPeopleSoft 24%24% 74%74% 24%24% 76%76%

SAP AG.SAP AG. 38%38% 23%23% 31%31% 37%37%

SiebelSiebel 62%62% 38%38% 36%36% 64%64%


Current Situation Current Situation -- Provider P Provider Perspectiveerspective

Major ERP vendors are changing their revenue model to decrease their reliance on new software licenses towards income generated from upgrades and product support

It motivates many user organizations towards alternatives such as outsourcing and application servicing

Recently a number of important ICT vendors have re-confirmed their commitment to application servicing in the context of the Utility Computing approach


Important business Important business factors for changefactors for change

Standardization of business environmentStandardization of business environment (e.g. (e.g. EUEU))

Globalization of enterprise applications - Globalization of enterprise applications - samesame

application to all usersapplication to all users over the world over the world

Management acceptance of outsourcingManagement acceptance of outsourcing

Service Level Agreements (SLA) provide legally Service Level Agreements (SLA) provide legally

enforceable guaranteeenforceable guarantee

SLA


Important technological Important technological factors for changefactors for change

Emergence of Utility Computing• Computing grid provides an ideal infrastructure for application

servicing• It can host a large number of ASP applications in a scalable and

reliable manner • Provides a more cost effective solution for hosting enterprise

applications than a set of independent servers each dedicated to a specific application

Role of Web Services • Web services are regarded as the enabling technology for the

integration of ASP applications, and for delivery of low-granularity application services

Servicing of large amount of customers from single data centre is Servicing of large amount of customers from single data centre is bothboth: : technologically possible and economically preferabletechnologically possible and economically preferable


Sourcing VariantsSourcing Variants

What are the alternatives of traditional modelWhat are the alternatives of traditional model::IInn--house service delivery & Ihouse service delivery & In-house n-house IT operationsIT operations??

GoalGoal – optimal combination of: – optimal combination of: enterprise resources and competencesenterprise resources and competences

with competences and resources of reliable partnerswith competences and resources of reliable partners

What is the optimumWhat is the optimum?? ((extremes are unlikely to be optimalextremes are unlikely to be optimal))

Framework supporting this approach needed – Framework supporting this approach needed – it has to identify necessary services, processes, and resourcesit has to identify necessary services, processes, and resources


Framework for outsourcing Framework for outsourcing of IS/ICT Services, Processes, and Resourcesof IS/ICT Services, Processes, and Resources

What ICT services are necessary for business processes support ?

Which processes/resources has to be operated internally and which externally ?

Who should own the resources ?

Business processes

Ma

na

ge

me

nt

of

IS/I

CT

de

ve

lop

me

nt

an

d o

pe

rati

on

s

IS/ICT

ICT Resources

Hardware(HW)

Operating system(OS)

Database(DB)

LAN and WAN

Telecommunicationsand Internetconnection

Application software(ASW)

Middleware

D a

t aH

R &

knowledge

Mate

rial andenergy

Tools for design, d

evelopm

ent and o

perations

Tec

hno

logi

cal

infr

astr

uctu

refo

r ap

plic

atio

n ru

nnin

g

ICT Processes

ICT Services

O p

e r

a t

i o

n s

-

Ser

vice

Del

iver

y

Dev

elop

men

t / P

urch

ase

/ Lea

se

C u

s t

o m

i z

a t

i o

n

I n

t e

g r

a t

i o

n

Dev

elo

pm

ent

and

mai

nte

nan

ce


Basic Types of OutsourcingBasic Types of Outsourcing

1.1. Business process Business process outsourcing (outsourcing (BPOBPO))

2.2. Complete Complete ((complexcomplex) IS/ICT) IS/ICT outsourcingoutsourcing

3.3. SelectiveSelective IS/ICT IS/ICT outsourcingoutsourcing• Application serviceApplication service (ASP) (ASP)

• ICT process outsourcingICT process outsourcing

• ICT resource outsourcingICT resource outsourcing

4.4. Application development outsourcingApplication development outsourcing

Make yourself !?

ICT

fac

tors

im

po

rta

nce

Bu

sin

es

s f

act

ors

im

po

rta

nce


Business Process OutsourcingBusiness Process Outsourcing

Supporting process /Non ICT service

ICT Service "1" ICT Service "s"

Resource "1" Resource "2" Resource "r"

ICT Process "2" ICT Process "j"ICT Process "1"

Outsourced

Business process "p"

Business process "1"

SLA and its metrics

SLA and its metrics


Outsourcing Outsourcing of Complexof Complex IS/I IS/ICCTT





Outsourced




Selective Selective IS/ICTIS/ICT Outsourcing Outsourcing

ICT service outsourcing (ASP)

ICT process outsourcing

e.g. CRM outsourcinge.g. ERP implementation

outsourcing

Systems integration outsourcing





Outsourced







Outsourced



ICT resource and its maintenance outsourcing

e.g. Data center outsourcing

Experts hiring





Outsourced




Outsourcing Variants Outsourcing Variants - - ConclusionsConclusions

Collaboration of specialized partners is more and more Collaboration of specialized partners is more and more common for IScommon for IS//ICT development and operationICT development and operation

Many variants of outsourcing can be consideredMany variants of outsourcing can be considered Each outsourcing scenario needs to be considered Each outsourcing scenario needs to be considered

separatelyseparately Each variant has different CSF and requires different Each variant has different CSF and requires different

SLASLA Variant selectionVariant selection ( (sourcing strategysourcing strategy)) has to be part of has to be part of

strategic managementstrategic management


Comparison of traditional software license model Comparison of traditional software license model with ASP modelwith ASP model

Differen-tiator

ASP (SW as Service)

Traditional Approach (SW as License)

Design Designed from the outset for delivery as Internet-based service for a large number of customers (HW+SW architectures, business model).

Designed for implementation by specialist and for customer to operate and maintain.

Design and Technology Issues

Main characteristics

Application service provider controls all necessary ICT infrastructure (HW+SW) and delivers application functionality as a service to many customers.

Software vendor develops the application; the application is implemented on customer’s HW and customer is responsible for the operations.


Design and Technology Issues

Technological architecture

Multi-tenant architecture designed to run thousands of users from different user organizations on a scalable technological infrastructure.

Architecture suitable for deployment by individual company on a dedicated ICT infrastructure.

Service management

Applications with embedded service management, monitoring metering and security capabilities.

Typically must add service management, monitoring and metering features subsequent to product development.

Upgrades Frequent (every 3-6 month) upgrades possible. All customers are upgraded simultaneously resulting in significant cost reductions.

Infrequent, major updates (every 12-24 months). Both, provider and customer, have to implement version management process.

…


Business Issues

Readiness of the service

Short implementation cycle. Long implementation cycle due to complex implementation of HW, SW, and knowledge transfer to customer sites.

Availability of the service

The service is available from any location (globally).

Could be limited to single organization via intranet or client/server interface.

Scalability The volume of the services deli-vered (i.e. number of users sup-ported, number of transactions) can be scaled (up or down).

Configuration needs to support peak requirements, and cannot be scaled down.

Customi-zation

Typically limited. Extensive customization possible, but expensive.

Internal sour-ces utilization (people, tech-nology, etc.)

Only few internal sources used for ICT processes support. Most of the company sources are used for core business processes.

Many internal sources used for ICT processes support.


Business Issues

Costs of ICT Predictable, no investments required - operating costs only. The costs are highly correlated with the volume of services.

Both investments and operating costs. High overhead costs given by depreciation and amortizing of investments. The costs may not be correlated with volume of service delivered.

…

ICT sources utilization

ICT sources of the provider (HW, SW, ICT specialists) are used across all customers; provider has advantages of economies of scale.

ICT sources are used only for one organization.

ICT knowledge required at customer site

How to use ICT for competi-tiveness enhancement, avai-lable services at ICT market, SLA structure, and manage-ment of service delivery.

The same plus: wide spectrum of ICT knowledge. The required ICT knowledge is dependent on number of platforms and types of application used.

ICT management Issues


ICT management Issues

Evaluation of an application

The application can be evaluated before the purchase.

Application is evaluated after purchase, installation and customization.

Problem and change manage-ment proce-dures

Short feedback cycle – procedures enable almost immediate feedback. Support staff or programmers can directly identify and fix problems. Fixing a problem for one customer fixes it for everyone, which reduces support costs.

Problem solving is often indirect via intermediaries (VARs, SIs, etc). Patches and upgrades are implemented at individual customer sites. Costly and unreliable, as customers often delay installation of patches and upgrades.

Risks Loss of knowledge that could be useful in the future.

Stability of the provider (Exit strategy).

Systems integration – who should be responsible for?

Unsatisfactory customisation.

Stability of the provider – but not to the same extent as for ASP.

Technology backwardness. High TCO (Total Cost of

Ownership).


Comparison of software licensed model with ASP modelComparison of software licensed model with ASP model

The comparison makes a compelling argument for the ASP model as the next logical step in the IS/ICT evolution.

ASP model:• faster • cheaper• more flexible


Bureau


1990sERP Applications2005


Utility computing)


= !?


Bureau


1990sERP Applications2005


Utility computing)


= !?


Prerequisites for efficient deployment of ASP modelPrerequisites for efficient deployment of ASP model

Unique alignment Unique alignment of of ASP with business processesASP with business processes!!

The IDC study [IDC, 2002] indicated that ASP The IDC study [IDC, 2002] indicated that ASP implementations can generate ROI above 1000%.implementations can generate ROI above 1000%.

What are the prerequisites What are the prerequisites for efficient ASP model deployment for efficient ASP model deployment ??


Prerequisites for efficient deployment of ASP model Prerequisites for efficient deployment of ASP model ((Critical Success FactorsCritical Success Factors))

Effective management of business and ICT processes Effective management of business and ICT processes and resourcesand resources

Close link between business, ICT, and sourcing Close link between business, ICT, and sourcing strategiesstrategies

Well-designed serviced oriented application and Well-designed serviced oriented application and technology architecturestechnology architectures

Optimal granularity of outsourcing solutionsOptimal granularity of outsourcing solutions IS/ICT IntegrationIS/ICT Integration Detailed information about ICT market.Detailed information about ICT market. ProperProper provider selection criteriaprovider selection criteria Control of IS/ICT and service costsControl of IS/ICT and service costs


Effective management of business and ICT Effective management of business and ICT processes and resourcesprocesses and resources - - SPS SPSPPR ModelR Model

Business, IT and Sourcing Strategies -goals, products and services, types of customers, partners,...

Core Process 1

Core Process "p"

Support Process 1 Support Process "pp"

ICT Service 1 ICT Service 2 ICT Service "s"

ICT Resource 1 ICT Resource 2 ICT Resource 3 ICT Resource "r"

ICTServices

Layer

ICTResources

Layer

Product/Service 1

Product/Service "p"

StrategicManagement

Layer"S"

"P"

"S"

"R"

Market ofProducts

andServices

Market ofICT

Services

Market ofcompanyproducts

Market ofICT

Resources

Market ofICT

Resources

Custmers

Lease / sale ofsupefluous resources

"P"ICT

ProcessesLayer

ICT Process 2 ICT Process jICT Process1

Market ofICT

Services

Suppliers forCore Processes

BusinessProcesses

Layer


Effective management of business and ICT Effective management of business and ICT processes and resourcesprocesses and resources - - SPS SPSPPR ModelR Model

Who willdeliver?

In-house

Marketof IS/ICTServices

Outsourcing /ASP

CIO

TOPmanagement

ProcessOutcomes

ProcessRequirements

ICT Service definition (SLA):- content- volume- quality- price

DeliveredServiceService Order

ProcessManagers

- product/service- customers- partners

Resourcerequirement:

- content(type)

- volume- quality- price

DeliveredResource

ResourceOrder

Resourcemanager 2

Resourcemanager 1

ICT processes creation

Business andIS/ICT

integration anddimensioning

Howsophisticated

process tocreate?

ICT ProcessManagers


Close link between business, ICT, and sourcing strategies

Business, IT and Sourcing Strategies -goals, products and services, types of customers, partners,...

Core Process 1

Core Process "p"

Support Process 1 Support Process "pp"

ICT Service 1 ICT Service 2 ICT Service "s"

Resource 1 Resource 2 Resource 3 Resource "r"

Product/Service 1

Product/Service "p"

"S"

"P"

"S"

"R"

Market ofProducts

andServices

Market ofICT

Services

Market ofcompanyproducts

Market ofICT

Resources

Market ofICT

Resources

Custmers

Lease / sale ofsupefluous resources

"P"ICT Process 2 ICT Process jICT Process1

Market ofICT

Services

Suppliers forCore Processes

Partnerselection,

relationshipmng,

evaluation,changes

Main decisions:

- who owns?

- whooperates?

- who doesmaintenance,

and upgrades?

- price/costs,funding?

Sourcingstrategy (whichcomponent "in"and which "out")


MatureMature serviced oriented application serviced oriented application and technology architecturesand technology architectures

Hardware(HW)

Operating system(OS)

Database(DB)

CV

LAN and WAN

Telecommunications and Internet

connection

Middleware

Applicationsoftware 1(ASW 1)

...Applicationsoftware 2(ASW 2)

Applicationsoftware n(ASW n)

CVCV

BestCase


CV

... Applicationsoftware n(ASW n)


CV

CV

Hardware2(HW2)

Operating system 2(OS2)

Database(DB2)

LAN and WAN

Telecommunications and Internetconnection 2

Middleware2

Hardwaren(HWn)

Operating system n(OSn)

Database(DBn)

LAN and WAN


Middlewaren

Hardware1(HW1)

Operating system 1(OS1)

Database(DB1)

LAN and WAN


Middleware1

WorstCase

Not all applications suitable for ASPNot all applications suitable for ASP Coexistence of different model requires mature Coexistence of different model requires mature

architecturearchitecture


Impact on ICT landscapeImpact on ICT landscape

What will happen if ASP model becomeWhat will happen if ASP model becomethe prevalent model of ICT service deliverythe prevalent model of ICT service delivery ? ?

HW, SW and Telco products will return back to their producers. HW, SW and Telco products will return back to their producers. They will provide services not products.They will provide services not products.

The reduction in the size of the traditional software license The reduction in the size of the traditional software license market, reduced demand for on-site implementation and the market, reduced demand for on-site implementation and the corresponding increase in demand for application services will corresponding increase in demand for application services will lead to further rationalization of the ICT vendor market.lead to further rationalization of the ICT vendor market.

Will many SW vendors, implementators, and SI disappear?Will many SW vendors, implementators, and SI disappear?



20002000 20042004

HW HW andand SW SW ServicesServices HW HW andand SW SW ServicesServices

IBMIBM 55,3%55,3% 43,0%43,0% 48,0%48,0% 50,6%50,6%

HPHP 84,3%84,3% 16,0%16,0% 81,2%81,2% 19,6%19,6%

SunSun 85,3%85,3% 14,6%14,6% 65,7%65,7% 34,2%34,2%


Impact on labour market and ICT educationImpact on labour market and ICT education

Reduction of demand for in-house ICT specialists will lead to the Reduction of demand for in-house ICT specialists will lead to the restructuring of the ICT labor marketrestructuring of the ICT labor market • ACS and Philipson March 2, 2004: unemployment in the IT industry at more

than 10 per cent, around twice the national average of 5.7 per cent • Many of these came from displaced programmers, who have the highest

unemployment rate (18 per cent) • IT industry is healthy, and will always offer many interesting jobs, but the

industry has changed • The key to success is adapting to those changes

Education Education – – specialists with following knowledgespecialists with following knowledge::• integration of business and ICT processes integration of business and ICT processes ((by means of ICT by means of ICT

servicesservices))• design of efficient services, application, and technology design of efficient services, application, and technology

infrastructures infrastructures • development and realization of sourcing strategydevelopment and realization of sourcing strategy• management of service deliverymanagement of service delivery• highhigh--tech tech for for vendor development specialists vendor development specialists


LiteratureLiterature

Obligatory:Obligatory: [Feuerlicht, Vorisek, 2002] Feuerlicht, G., Voříšek, J.: Delivering [Feuerlicht, Vorisek, 2002] Feuerlicht, G., Voříšek, J.: Delivering

Application Services: Who will Benefit?, Proceedings of “Systems Application Services: Who will Benefit?, Proceedings of “Systems Integration 2002” conference, VŠE, Praha, 2002, 31-41, ISBN 80-245-Integration 2002” conference, VŠE, Praha, 2002, 31-41, ISBN 80-245-0300-x0300-x

[Feuerlicht, Vorisek, 2003] Feuerlicht, G., Voříšek, J.: Key Success Factors [Feuerlicht, Vorisek, 2003] Feuerlicht, G., Voříšek, J.: Key Success Factors for Delivering Application Services, Proceedings of “Systems Integration for Delivering Application Services, Proceedings of “Systems Integration 2003” conference, VŠE, Praha, 2003, 274-282, ISBN 80-245-0522-32003” conference, VŠE, Praha, 2003, 274-282, ISBN 80-245-0522-3

[Feuerlicht, Vorisek, 200[Feuerlicht, Vorisek, 20044] ] Feuerlicht, G., Voříšek, J.: Utility Computing: Feuerlicht, G., Voříšek, J.: Utility Computing: ASP by another name, or a new trend?, Proceedings of “Systems ASP by another name, or a new trend?, Proceedings of “Systems Integration 2004” conference, VŠE, Praha, 2004, Integration 2004” conference, VŠE, Praha, 2004,

Facultative:Facultative: [Carr, 2003] Carr, N.G.: IT Doesn't Matter , Harvard Business Review, [Carr, 2003] Carr, N.G.: IT Doesn't Matter , Harvard Business Review,

Vol. 81, No. 5, May 2003Vol. 81, No. 5, May 2003 ( (http://hbswk.hbs.edu/item.jhtml?http://hbswk.hbs.edu/item.jhtml?id=3520&t=technologyid=3520&t=technology ) )

[Cohen, 2004] Cohen, P.: Twelve Technical and Business Trends Shaping [Cohen, 2004] Cohen, P.: Twelve Technical and Business Trends Shaping the Year Ahead, the Year Ahead, http://www.babsoninsight.com/contentmgr/showdetails.php/id/687http://www.babsoninsight.com/contentmgr/showdetails.php/id/687


Topics for Essay Topics for Essay

1)1) Compare the approach of RightNow, SalesForce and one Czech Compare the approach of RightNow, SalesForce and one Czech company to CRM delivery (process of delivery, evaluation, SLA,…)company to CRM delivery (process of delivery, evaluation, SLA,…)

2)2) Compare according to annual reports the results of important ISW in Compare according to annual reports the results of important ISW in last 3-5 years (structure of revenue - new license, upgrades, last 3-5 years (structure of revenue - new license, upgrades, support,….)support,….)

3)3) Analysis of IT product and services supply: worlds statistics, trends Analysis of IT product and services supply: worlds statistics, trends (including the changes in supply chain), provider CSFs(including the changes in supply chain), provider CSFs

4)4) Analysis of ASP supply: the biggest providers (name, residence, the Analysis of ASP supply: the biggest providers (name, residence, the year of set up, offered services, No of customers, No of users,…) year of set up, offered services, No of customers, No of users,…)

5)5) Evaluation of application delivered by ASPs (application choice, Evaluation of application delivered by ASPs (application choice, data collection, analysis)data collection, analysis)

6)6) Methods of IS/ICT costs and benefits evaluationMethods of IS/ICT costs and benefits evaluation


Questions for ExamQuestions for Exam

1)1) Is ICT the tool of competitivenessIs ICT the tool of competitiveness? ? Is the significance of Is the significance of ICT the same in all industries ICT the same in all industries ? ? Give and comment the Give and comment the examplesexamples

2)2) Enterprise Application DeliveryEnterprise Application Delivery,, variants and their CSF variants and their CSF• User perspectiveUser perspective• Provider perspectiveProvider perspective

3)3) Business and technological factors for changeBusiness and technological factors for change4)4) Sourcing variantsSourcing variants andand their CSFtheir CSF5)5) Comparison of software license model with ASP modelComparison of software license model with ASP model6)6) Prerequisites for efficient deployment of ASP modelPrerequisites for efficient deployment of ASP model7)7) Impact of recent trends on ICT landscape, labour Impact of recent trends on ICT landscape, labour

market and ICT educationmarket and ICT education


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1 Recent Trends in Enterprise Information Systems and Application Delivery Models Jiří Voříšek...

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