The Leader Magazine

DEC 2017

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54 DECEMBER 2017 th E l E a DER Web applications are used to ease data entry into the IWMS and increase efficiency over a global service-delivery network. Finally, a BI solution sits on top of all data, consolidating reporting and analytics across all data sources and providing decision support. While it is technically possible to build this architecture as an integrated solution, a new business model would also need to be created to implement this solution to lower costs, improve functionality, improve schedules and mitigate risk. a new business model for C re technology A new business model (Figure 2) needs to be centered around the following components, which represent the primary benefits delivered by the model – reduced cost, improved functionality, reduced time and reduced risk: 1. Cost reduction. Two of the main costs of implementing an IWMS are hosting/licenses, and customization. For licenses and hosting, centralizing and outsourcing hosting – even with each client having its own environment to support modern CRE requirements – is an obvious solution, primarily because of the economy of scale and the efficiencies of outsourcing data-center management or cloud computing. But what about licenses? Software as a service (SaaS) models commonly used in point solutions have been used for many years to reduce the cost of technology access but, as discussed, they are limited. The new business model would combine a SaaS pricing model with a superior CRE technology architecture. Effectively, licenses could be shared across many CRE organizations, as well as providers who require access to service their CRE clients globally. Such an arrangement would allow reallocation of licenses cost-effectively between users who are shrinking (or those that have over-estimated their usage at implementation) and users who are growing. Rather than an SaaS model where the software developer provides technology access, the licenses would need to be owned by a third party or integrator with contracts in place from the underlying software suppliers to allocate those licenses to any user, regardless of business entity. CRE organizations would simply pay a reduced annual fee for technology usage rather than own licenses directly. Rather than an SaaS model, this solution would allow for unique client instances to support system integrations and customizations if needed. A technique called "pre-configuration" presents another opportunity for cost reduction by reducing the expense of customizing software. What if commercial IWMS and BI products could be "pre-configured" or improved prior to any one CRE organization implementation? If the pre-configured solution were developed by an independent CRE technology integrator (not the underlying software provider or a CRE organization itself) and utilized by many CRE organizations, then the high cost of customization could be shared among them, reducing costs significantly. In this scenario, the technology integrator would also host, service and even operate the technology to ensure consistency in data management and operational performance. The final point on CRE technology cost reduction is long-term maintenance and support. Over the course of a traditional IWMS life cycle, after a potentially costly implementation, CRE organizations make decisions regarding upgrading to the current release of the software, acquiring additional licenses for compliance, and processing change orders that add new functionality or functionality missed in the initial implementation. The next-generation CRE technology business model would operate under an SaaS pricing model (even though it is a unique technology instance), thereby stabilizing pricing from year to year, minimizing or eliminating change orders due to crowdsourced functionality, and releasing software updates containing not only new functionality but ensuring the underlying IWMS, BI, mobile, and third-party software releases are maintained to the latest revision. 2. Improved functionality. Most software providers claim that their technology contains "best practices." But the question remains, if all CRE technology was truly best practices, why does it require customization? Point solutions, which are usually SaaS models, reduce customization by design (everyone gets the same functionality). However, point solutions, although they may have deeper functionality in one area than does IWMS, do not meet the requirements that an integrated architecture leveraging IWMS and advanced BI would. On the other hand, IWMS is designed flexibly to be configured. This means that out-of-the-box IWMS implementations are rarely possible. Each IWMS set-up requires user and organizational security, establishing business process flows or "playbooks" for delivering services, creating data standards, improving the user experience and simplifying their interaction with the technology, and potentially adding functionality. After all, no single software solution does everything well. The concept of pre-configuration and pre-integration solves this problem improving F E A T U R E A R T I C L E Figure 1 Figure 2

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