Monday, 19 January 2015 15:26

Pay-as-you-go licenses ok, but beware the pitfalls Featured

Image courtesy of Stuart Miles, Image courtesy of Stuart Miles,

Subscription and pay-as-you-go software and IT services arrangements offer increased flexibility and cost-efficiency, but they also bring inherent risks to business and organisations, according to a newly published report on technology trends for this year by a global IT services group.

According to UXC Eclipse CEO Bradley Stroop, while there are benefits from implementing a subscription-based licensing model, organisations need to be on the lookout for “ill-prepared software resellers” looking to prop up falling license revenues, or ‘rebadged’ software resellers who look like services players but are “unproven with limited experience, shallow pockets, limited IP maturity, lack of process and no service-oriented culture”.

UXC says that in IT services, the move towards a subscription-based model is being driven by software vendors and customers who are increasingly expecting pay-as-you-go arrangements, and as well as increasing flexibility and cost efficiency, these arrangements allow the organisation to align quickly whenever there are changing business requirements.

Stroop says new IT services companies also need to avoid ‘buying’ experience by hiring executives and delivery teams from more established providers without the necessary infrastructure to back it up.

And, Stroop says companies looking to capitalise on the benefits of subscription-based models in 2015 need to look for partners that have good staff and customer retention rates, experienced project managers, and solid data and security controls.

Commenting on the what UXC Eclipse sees as the IT key trends for 2015, Stroop says the relentless growth and democratisation of big data, the criticality of business management processes, the rise of subscription-based models and packaged enterprise resource planning (ERP) systems are likely to be key business and technology trends this year.

“In 2015, solutions providers must exceed the expectations of business decision makers. They will need to provide customised solutions that identify business needs and add value to the entire business, while offering substantial commercial and financial insights.

“They must do all of this while managing the expansion of big data and business intelligence, overcoming the risks of subscription-based models and delivering efficient software solutions and systems.

“Decision makers will value business outcomes over technology. They will expect that solutions providers can deliver commercial and financial insights, address business challenges and needs. Technology will continue to be about adding value and achieving specific business outcomes.”

As well as the rise of subscription-based models, here’s the other key trends predicted by UXC Eclipse:

•    Democratisation of big data, business intelligence and analytics

Big data used to be limited to large enterprises that handled massive numbers of transactions. Now, big data, business intelligence and analytics are coming to small- and medium-sized businesses (SMBs).

In the past, SMBs that worked with large enterprises needed to employ external analytics to effectively use the big data produced by larger companies. The rise of knowledge around big data will see SMBs start deploying business intelligence and analytics internally.

This new capability to deploy business intelligence and analytics internally will help SMBs to save costs and increase flexibility when responding to market challenges and sharpening their competitive edge.

•    Business Process Management (BPM) will become business-critical

The perception that BPM isn’t business-critical will start to change. Increasing business complexity means companies that don’t retain a firm grip on every operational facet risk failing to deliver ongoing stakeholder value.

BPM delivers a 360-degree view of business processes, letting ERP consultants design and implement a solution that fits organisational needs perfectly. This reduces the time and costs associated with having to make non value-adding modifications and customisations during and after the implementation.

Organisations will begin to realise that an ERP implementation is not about technology. It is about solving business challenges. So it is critical to ask the right questions to get a solution that matches the business need.

•    The move to packaged enterprise resource planning (ERP) systems

The rise of packaged ERP systems will lead to increased ERP adoption. These packages deliver the collective benefits of new technologies such as cloud, business intelligence and CRM, while avoiding the old problems of disparate and siloed information systems.

Organisations can reap all the benefits of ERP without needing to create and maintain complex system integration and software customisation.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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