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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: CYBERKEN who wrote (14049)	8/4/2002 1:36:33 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to 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

To: CYBERKEN who wrote (14049)	8/4/2002 2:58:16 PM
From: J. P.	Respond to of 19219

I've been doing these CRM/ERP implementations for a few years now. Here's the issue I've been getting at: Once a manager or CIO decides to bring in Siebel or SAP they have effectively put their job on the line. Should this implementation fail the loss will be millions. Once SAP or Siebel are in house they are now basically calling the shots. They want to bring in Accenture, they bring them in. Now Accenture brings in too many consultants and many of them trainees, yet they are still billing over a 100 bucks an hour plus travel expenses for these trainees, and over 200 bucks an hour for the PM and the Senior developers. And they stay for a long time. And there's nothing the client can do at this point because they are in so deep they can't cut their losses and bail. This is the secret behind Siebel. Plus with Siebel you are always digging in your pocket to pay for everything all the time. No wonder software earnings have been so padded, it's a big corporate ripoff. The companies have to get smart and buy cheaper software and implementations and give themselves an out.