November 2002 | Commentary | IT Matters

Network Software: Finding the Perfect Fit

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A shift is occurring in the way logistics software is delivered. Companies have spent billions of dollars customizing, implementing, and maintaining supply chain software to improve efficiency and service.

Yet, despite this investment, projects are often discontinued as software too quickly becomes shelfware. High failure rates and delayed ROI can be attributed to costs associated with the enterprise software model. Customers are required to pay up-front expenses to license software and buy hardware, then customize, implement, and upgrade the application. This model has historically been the only viable solution for companies.

Fortunately, a proven alternative is now available—network software. Logisticians across a wide spectrum of markets have discovered the benefits of network software, a model that speeds time-to-value, reduces up-front investment risks, and avoids the real and hidden costs associated with enterprise software.

Tailoring Software for the Best Fit

To illustrate the difference between enterprise software and network software, consider your options when buying a new suit. For a custom-made suit, you hire a tailor, get measured, select the fabric and pattern, and wait for it to be delivered at a significant cost. The other alternative is to select an off-the-rack suit that reflects the best design and industry trends, and alter it for a better fit. These alterations can be completed in several days, with the total cost of the suit significantly less. For most, altering a suit is a much more palatable choice than customization. The same is true for software.

Exposing the Real Costs

The real and hidden costs of enterprise software can be placed into three general categories: implementation, infrastructure, and customization.

1. Implementation. Enterprise software requires a lengthy implementation process, representing the majority of the solution's total cost of ownership. Real lifecycle costs of enterprise applications have been pegged as high as implementation and integration at 10 times the license fees, according to a recent study by AMR Research.

2. Infrastructure. The second cost is associated with the burden of selecting, purchasing, installing, and maintaining the required infrastructure (network equipment, data center environment). Even after the implementation, the infrastructure requires continual upgrading as more data/users are added and as the software vendor delivers new releases.

3. Customization. The third cost is based on the need for extensive customization. Enterprise software requires companies to develop and maintain custom code, data standards, and connections to support their unique business process and legacy systems.

Network software is a hosted, web-native application that incorporates best practices and delivers rapid ROI. Unlike an ASP, which is enterprise software outsourced to a third party, network software is delivered as a single, shared platform and version of the software, which can be quickly configured, deployed, and updated.

While most companies once thought that their business processes were too unique to use configurable software (as opposed to customized software), transportation managers are quickly realizing that leveraging industry best practices far outweighs the benefit of perpetuating a unique process.

Saving Time and Money

Through flexible configuration, companies can quickly adapt network software to their requirements at a fraction of the cost and time required to customize enterprise software. Also, the infrastructure is already in place and available to all users through a single, common platform.

As a result, the network software model significantly reduces the implementation time and maximizes the performance, scalability, security, reliability, and availability of the application.

Most importantly, the network software model reduces implementations to configuration and connection activities rather than customization and assembly. No implementation is required at the user site, and network software implementations minimize or eliminate third-party implementation assistance. Complete network software deployments are between 30 and 90 days, significantly shorter than enterprise software.

As a result, companies experience value from these applications within several weeks instead of years.

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