The most widely adopted measure of what a piece of software will cost over its lifetime is the ‘total cost of ownership’ (TCO). Quite rightly, this measure incorporates not just licence and maintenance cost, but also ongoing hardware, consultancy and training costs.
It is, of course, essential to take the long-term view when assessing any IT investment, but to do so involves making assumptions about the future. And the most common assumption is that circumstances will remain the same.
Change is inevitable, however, and resisting change is unwise. Unfortunately, many businesses are forced into doing just that by their business software – most notoriously their enterprise resource planning (ERP) applications – because the cost of changing that software is prohibitive.
Agresso is an ERP provider that argues that organisations need to take the cost of change into account when selecting software. Of course, it wouldn’t make that case if it didn’t think its own tools passed muster.
The Agresso ERP application is based on its trademarked VITA architecture, which, according to newly appointed UK MD Anwen Robinson, is designed with change in mind.
“With a traditional ERP package, once you’ve defined the original structure it’s set in concrete, and its very difficult to change going forward,” she says.
“What you have with Agresso are fundamental components like building blocks that you can flex and change as the organisation itself changes, whether it’s the reporting structure that changes, or the hierarchical structure, or if the change is enforced by a merger or an acquisition.”
The economic benefit of this architecture derives from the fact that organisations do not need to pay for expensive consultants to modify the software when change is required.
“Customers can make the changes themselves,” says Robinson.
These are bold and not unfamiliar claims. But they are backed up by analyst testimony.
“Being designed for post implementation change, [Agresso] brings huge benefits in terms of rapid, low-cost, low-risk and accessible system flexibility,” says the Butler Group.
And customers are voting with their feet. According to the company, it has “replaced SAP or won against SAP in a competitive bid in 61 deals internationally”. These deals had a combined value of €42.1 million, it says.
In 2008, the company’s parent organisation, Unit 4 Agresso (which as of February that year also owns UK finance software vendor CODA), grew revenues by 22% to €394 million. While 65% of Agresso’s UK customer base is in the public sector (a recent job advert for a solutions architect for the House of Commons stipulated knowledge of its platform, for example), its roster also includes 3i, easyJet, Daily Mail Group and, interestingly enough, IT services provider Logica.
That Logica – a solutions partner of both SAP and Oracle – chose Agresso for its own purposes is telling, but it also highlights a challenge for the company. IT services companies are an important channel for ERP vendors, and they might not be too pleased with software that eliminates the need for ‘expensive consultants’.
However, Robinson insists that a low maintenance burden can suit partners too. Another challenge for the company is the fact that what little IT budget is available is not typically being directed towards expensive and long-winded ERP replacement projects.
Robinson acknowledges that most growth is being driven by public sector shared services projects but she insists that the ‘cost of change’ message is winning converts even in the downturn.
“We haven’t had to change our message at all for recessionary times,” Robinson says. “Not only are we seeing more prospects, but also partners who might traditionally have sold SAP or Oracle are knocking on our door, because it’s a message that plays very strongly.”
