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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: CYBERKEN who wrote (14049)8/4/2002 1:36:33 PM
From: Lizzie Tudor  Read Replies (2) of 19219
 
<OT> Software fundamentals

Cyberken, I don't mean to speak for the prior poster here (J.P.) but one point he makes I agree with- the implementation costs of enterprise software is too high. This is consulting dollars for customizations, which imo are mostly counterproductive anyway- catering your business to the "user community" is not always the best option. Some highly complex business such as applied materials etc. require it, but more often than not customizing software is nothing more than altering Siebel to approximate somebody's prior paper system.

Some software deals I know of involve $3mm for the actual software and then $7mm for the implementation/customization fees (these are capital expenditures-amortized).

One of the big advantages of enterprise software is standardization, and I'd like to see more businesses scrutinize their business processes accordingly.

Having said that, this consulting process is being altered dramatically cost-wise with the introduction of outsourcing to India. The companies involved are cognizant and infosys, and they are taking the entire application implementation piece at about 1/3 the prior cost. This is going to kill accenture, price etc. but (imo) will assist Oracle, Siebel etc. and spur the software business cycle.

So the objective is to continue to automate, and implement software, just do it for less.

BTW I wonder how this shift to outsourcing will show up in Roach's software numbers. As I say I believe the actual dollars to Siebel,Orcl etc. for licenses will actually increase.
L
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