| ------------------------------------- BrainStorm Bulletin e-newsletter of BrainStorm Group February 28, 2002 ------------------------------------- ==================================================== -- INTRODUCTION
==================================================== Ready or not...tomorrow is March 1st. Spring Training is in full swing, Opening Day is right around the corner and we're less than a month away from the first eBusiness Integration Conference of 2002 - which will be held in Chicago March 25-27. We'll be featuring a stellar lineup of "Integration All Stars" - don't miss the Largest Integration Conference to be held in the mid-west this year! We are particularly pleased to be featuring such a wide variety of End User Case Studies on the Chicago program, including in-depth sessions from Covisint, The Home Depot (which is previewed in this issue), Nextel International, National Retail Federation, Novell, Premier Farnell, United Technologies, Southwestern Bell Communications and Newark Electronics. The first article in this issue previews a case study from Phil Wilkerson, the Director of Information Systems at The Home Depot. Phil will talk about building collaborative Relationships for the 21st Century Retailer and will cover how modern retailers have to collaborate with system vendors to meet the never static IT requirements of the industry. Staying competitive means maintaining and increasing customer satisfaction while continuing business growth. He will also discuss the difficulties of bringing on new partners as the retail market continues to consolidate. We also had a chance to catch up with Phil Murphy of the Giga Information Group to discuss the focus of his Maximizing Investments in Legacy Applications keynote. As much as everyone wants to tout their new toys and fancy Web applications, the fact is that everyone still has legacy systems that do most of the actual work. In today's tight economy, nobody has the money to replace their existing systems. That means that most of the projects currently underway are leveraging legacy systems to some degree. This has led many organizations to implement "quick and dirty" solutions. Phil will review the Pros and Cons of the most common "quick and dirty" solutions. As well as how a CIO can, by using available and inexpensive tools, create a repository of applications and tied to the business metrics enabling the CIO and the organization to demonstrate the ROI on their IT investment for any part of the organization. In addition to the eBusiness Integration Conference session attendees to our Chicago event will also have the opportunity to attend the following seminars: Mobile Enterprise Strategies Seminar - March 25th Chicago will mark the debut of the BrainStorm Group and Giga Information Group co-produced event - The Nearshore and Offshore Outsourcing Seminar Series. Stephanie Moore of the Giga Information Group will chair this full day seminar. There have never before been so many options in software development as there are today. The cost savings from taking our project abroad can be very dramatic, but there are risks. Some offshore countries are doing very good, very inexpensive work with a high degree of reliability. To learn the players and the new rules, plan on coming to this Seminar. We look forward to hosting you in Chicago! ================================================= To register for the eBusiness Integration Conference: To register for the Nearshore & Offshore Outsourcing Seminar: Use Priority Code EBB202 when registering.
For a FREE subscription, logo onto: www.IntelligentEnterprise.com today! Phil Wilkerson has more than 22 years of experience working in all facets of IT at several Fortune 500 organizations. He is the Director of IS at The Home Depot, the $46 billion retailer selling construction and remodeling supplies. Mr. Wilkerson is directing the implementation of new People Systems, eLearning and the enterprise portal effort. Before joining The Home Depot, he served as CIO and CTO at several eCommerce companies and was the director of technical architecture and security chief for Gap Inc., chief technical architect for Levi-Strauss and lead development engineer for California Casualty. Wilkerson will present a Featured Case Study titled: Building Collaborative Relationships for the 21st Century Retailer. The presentation will describe how retailers must collaborate with systems vendors to meet rigorous and ever-changing IT requirements. He will discuss how close cooperation between business executives and technology professionals is essential in order to create customer satisfaction and to continue business growth. This presentation will clarify how integration is an essential component for competitive advantage and outline basic fundamentals for building integration strategies. In addition, he will discuss the complexities of bringing in new partners as retail continues to consolidate in today's market. During this consolidation, IT acts as an enabler for the organization to meet its business goals while effectively incorporating new business processes. The Home Depot is currently going through this consolidation process as they purchase additional companies. In the press, it was announced that The Home Depot purchased Your Other Warehouse, a chain of plumbing distributors that primarily sells to wholesalers in the construction industries. When a company merges with another or adds a new partner, a series of different business systems such as human resources, finance, purchasing, distribution are brought into the enterprise. The challenge is to collaboratively combine the systems so that the two businesses can jointly conduct commerce, continue to improve sales and increase the value to the customer. Home Depot has more than 20,000 items for sale on their web site, and I asked what Home Depot is doing with its new web initiatives. Wilkerson told me that The Home Depot is experimenting with the reverse auction space in order to auction off excess and slow-moving merchandise. The overall mission of the web initiative and in fact, the entire business, is to fulfill customer needs in every way possible. Home Depot's e-business effort is currently too new to be effectively measured, but the feedback from customers has been very positive. Effective communication is a focus for the company both internally and externally. Wilkerson told me that he hopes to clarify the confusion that surrounds the act of building a collaborative enterprise. If this complicated task begins without a clear strategy, confusion results. Wilkerson will show that using basic building blocks founded on a coherent strategy in line with your business goals is both achievable and cost-effective. These solutions need to be integrated into the business fabric as the enterprise evolves. The presentation at the conference will emphasize that companies will need to be persistent in this effort in order to stay competitive. Wilkerson emphasized that it isn't just the innovators utilizing this integration strategy. This is the direction for all businesses. Even very small businesses with no IT departments will soon have to collaborate with their suppliers and customers electronically in order to take orders and sell merchandise. Wilkerson feels business integration is key to driving the effort to collaborative retail. Technically, EAI is the basis, he told me. From a business perspective, it is all about integrating business processes. It doesn't matter whether they are internal or external partners; Wilkerson sees this as one event. The challenge, he told me, is to ensure that technology is never a stumbling block, preventing someone from participating in a business opportunity. The business world is actually getting smaller, according to Wilkerson. During the dot-com frenzy there was a proliferation of new ideas, but now we are seeing a consolidation of concepts through bigger companies. He thinks we are returning to previous business modalities. Wilkerson's presentation is directed toward business executives responsible for planning their business strategy in addition to anyone responsible for the profit and loss for their business, especially those responsible for procuring resources for collaborative efforts. Wilkerson said that as we gain insight into this vision of a collaborative journey there would be a critical mass that will fundamentally change American business. Phil Murphy works for The Giga Information Group and his experience covers the topics of legacy application renewal, Web-to-host access, and application integration. Phil has more than 19 years of applications development and IT management experience, working with the State of Massachusetts, Boston University, Cullinet Software, and Arbella Mutual Insurance. At Giga, Phil has authored research on a number of diverse topics, including Y2K, eBusiness, Business Continuity Planning and Legacy Application Renewal and Integration. Phil's Chicago presentation is titled, Maximizing Investments in Legacy Applications. At this time, IT organizations face increasing pressure to deliver new capabilities to the business sector. The economic decline of 2001 deferred many IT hiring decisions and technology purchases, while at the same time 2002 budgets were being formulated. The net result is an extremely conservative economic outlook - Return On Investment (ROI) will govern 2002 and beyond. This conservative outlook will ensure that large projects with very long payback periods will not survive. Responsible business management will favor evolutionary investments that complement existing investments with newer technology and at the same time provide short-term ROI. This presentation provides an overview of the technology available for analyzing and assessing existing IT assets, modernizing legacy applications, exposing them to the Web, and mining the applications for knowledge. Also covered will be determining when exit-strategies are a better option. The main premise of Phil's presentation is that while new and trendy offerings such as Java and web applications get the best press, they are not well understood because of their novelty. The history of technology shows a tendency to gravitate toward new and exciting golly-gee-whiz applications that will solve everything. Phil points out that companies never really throw anything away. The reality is that there is always some poor IT person who has to try to make the "hot" new applications work with everything else already in place. Phil says this is especially true with replacement technology, which never really replaces anything, just adds to the stack. Phil told me that the economy show signs of improvement only slightly and at the higher levels. Before improvement is felt the question of funding new initiatives remains to be answered. He thinks the down economy should bode well for vendors since businesses have to get on the web but hardly can afford re-architecting everything they own. Functional "quick and dirty" solutions will have to be the answer, Web-to-host being one. Web-to-host isn't right for every application, but if the application is 80% there and needs to go on the web, this is a far more efficient solution than Java.The current state of the economy means that organizations will need to take a hard look at any investment in new technology. Phil thinks this conservative approach will last into the foreseeable future. The pressure on IT to hold the line on budgets is very high. Before any pitch for new spending, companies must make the best use of current resources. Phil also wants to address so-called "obsolete" technologies like COBOL. Any specific application can become obsolete for the environment in which it is used, but the decision of whether to "sweep or keep" needs to be weighed against the cost of change and the resulting benefits. Phil will give examples of things that can be modernized and kept. He told me that not everything should be on the web simply because it can be put there. He will address web enabling and application mining. Application mining can be improved using the mining tools that came out of the Y2K effort. Mining tools work well for modernizing the whole application portfolio and Phil recommends two changes to make them really effective. The first is to hook up to the source code management programs so an update to production updates the mining repository and creates a source of truth about the application. The second is to open the repository so that new data can be added to it. If there is a source of truth about all the applications in the portfolio and you know who owns the application, then it can be joined to IT labor, project level labor, acquisition costs or any other business metric to be analyzed. A financial metric engine can be placed around the application portfolio. This is a mandatory step if IT is going to talk to business executives about managing IT assets as actual, measurable assets. This process can be done without a large investment in new technology. Phil thinks that if the CIO can show an applications' contribution to the organization's ROI, he can dispel the misconception IT dollars are spent without giving users what they want or need. With this information he can point out, for example, that Human Resources eats 23% of the IT budget and a question to ask may be, should the company outsource the function or get a package to replace it? This changes the CIO's role from "bad guy" to "coach" and gives management the information they need to make the right decisions. If these questions are not highlighted, there will always be a contentious relationship between IT and the rest of the organization. Throughout this process, obsolete applications will be tossed, others will be left alone, and some will be web enabled. But full web development of that application doesn't have to be done because it would cost too much. New applications such as Web Services will be used to take advantage of their specific strengths within the larger context of the business goals. This presentation is aimed at large IT environments and management - those with legacy systems needing to be web enabled. Everyone from the CIO to the project manager would profit from this talk. In fact, anyone who has had their budget trimmed more than once and is still expected to get more functionality from their systems, will gain insights listening to Phil Murphy in Chicago. As a service to those who could not attend our New York or San Francisco eBusiness Integration Conferences due to travel and other constraints caused by September 11, we have archived sessions from our San Francisco Event. We are now pleased to bring these sessions to you AT NO CHARGE (an onsite value of $1495). They will be available to you on-demand for a full 60 days. You may revisit the sessions as often as you like, simply log-in each time to gain access. Register with Priority Code: BB to view the available sessions FOR FREE at: ================================================= Nearshore is generally defined as outsourcing to either Canada or Mexico. Another definition is anywhere you can go in a same-day trip by air. There are fewer risks and differences to deal with when a nearshore option is chosen. Offshore involves more risk, complication, and time. An example being the 22-hour plane ride to Bangalore, India, which is one long commute. Stephanie Moore told me she thinks that nearshore/offshore outsourcing is the most exciting area to be in today. She said that companies are going offshore not just to save money, but in many cases to find quality. Stephanie is going to focus on India because that country leads in both lower costs and higher quality. Companies currently save between 25% and 50% using Indian providers. Because they are very process-oriented and have a high dedication to their work, these Indian providers produce high quality code. They also spend a lot of time measuring their quality and productivity. India is an especially good choice in these times of very tight budgets. Stephanie said that Oracle, for example will give their customers the option of having their work done in the United States which would cost X dollars, or have it done in India for ½ X, or in Canada for ¾ X, and explains the levels of risk with each choice. Generally speaking, the farther you go the less it will cost, but the risk level will be higher. The offshore market is much bigger than the nearshore, however. Other countries that offer low-cost software development will also be covered in the seminar. The Philippines is a good cost option, but not as high in quality, and has some problems with political instability, a sensitive issue since 9/11. There are dozens of factors to consider when making nearshore/offshore outsourcing decisions. During the seminar, presenters will explain the process for evaluating countries and firms in order to choose what best works for your needs. Ireland is also producing high quality work, but because it has been so effective in promoting and selling the work, is almost as expensive as the U.S. Ireland is actually the biggest exporter of software in the world today. But there is currently a shortage of programmers in Ireland and companies are forced to outsource work to India. Stephanie will open the seminar by covering what is involved in nearshore/offshore, how it functions, as well as how to make intelligent, informed choices that consider the options, costs, and risks involved in each part of the globe. Mark Gordon, a partner at Gordon & Glickson LLC, will also present on Legal Considerations in Cross-Border Technology Agreements. Doing business in another country involves adapting to their culture and legal system, which can very different from the U.S. Many countries, including China and Russia, have very loose laws on just what intellectual property is and how it is protected as well as weak consumer protection laws. Corruption in the governments of many countries is also a factor that needs to be considered. Linda Severson, Senior Director of Information Systems at Lands' End will then present a case study titled, "Offshore Outsourcing at Lands' End" that will cover how her company goes offshore to stay ahead of its competition. Known as one of the world's most Web-savvy companies, Lands' End has aggressively pursued offshore IT capabilities and has found that taking advantage of offshore opportunities has allowed the company to make maximum use of limited resources. Following this presentation will be a panel on nearshore/offshore solutions hosted by Stephanie Moore. After the panel William Martorelli, Vice President of e-Services and Sourcing Strategies for the Hurwitz Group, will give a talk on Nearshore & Offshore Outsourcing: An Industry Perspective. He will cover the vendor landscape including which vendors offer what services, which is best at what it does and which to avoid. The market for nearshore/offshore outsourcing is evolving rapidly. Although India still leads the industry for outsourcing, it is spreading throughout the globe. Following his talk Martorelli will host a panel on nearshore/offshore best practices. Consisting of representatives from a number of leading outsourcing firms, this panel will identify the best practice elements critical for success. CIO or IT managers considering using remote programming resources anywhere in the world should consider attending this all-day seminar. There are too many options and choices in this arena to hazard making these choices without expert guidance from those who know what in the wide world is going on.
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