Every veteran CIO knows how implementation cost overruns can marginalize
the projected benefits of a new system before it is even live. System
upgrades can pose even greater risk and expense.
any IT manager will attest, predicting the scope and cost of future upgrades
is a task riddled with uncertainty. First, no one can reliably predict
what the company's circumstances will be in the five years following an
implementation. Will the company grow its business as expected into new
product areas, industry segments, and geographic regions? Will outsourcing
and hosting reduce expenses as anticipated? Will projected surpluses exist,
and more importantly, will these be available for spending on IT improvements?
Because no one has the answers to these questions (let alone knows what
all the questions are), it is impossible to know exactly what upgrades
will be needed or how much they will cost.
Software has launched a new program that seeks to alleviate some
of the uncertainty. Its 'Change Insurance' policy guarantees an up-front
fixed price for certain system upgrades that may occur within the first
two years. Upgrade categories include maximizing worker productivity,
facilitating collaboration with suppliers, enabling JIT and others that
may be defined by the customer. To spark interest in the new insurance
policy, HighJump is challenging prospective clients to compare the upgrade
prices to those of its SCE competitors. As a marketing tactic, the fixed-price
guarantee is a bold move that promises to raise some eyebrows, but whether
competitors will play by HighJump's rules remains to be seen.
fixed-price upgrades should attract a great deal of interest from users,
but it is unlikely to spark a revolution in software pricing. The real
aim of the program is to draw attention to the adaptability and flexibility
of the HighJump architecture - something that HighJump feels is its greatest
differentiator. Most vendors resist fixed pricing because upgrades typically
carry unforeseen difficulties that arise after the vendor has committed
to the price. HighJump's insurance is an internal vote of confidence in
its ability to deliver upgrades and enhancements to customers with minimum
for the challenge, few vendors are comfortable demonstrating business
scenarios in a competitive selection process. It requires them to abandon
canned presentations in favor of tailored demonstrations involving sample
data sets, workflows, module integration, and in extreme cases, custom
code. HighJump's challenge puts even greater pressure on rivals by essentially
delivering select business scenarios for the prospective buyers to use
as a basis for comparison. It is a little like allowing one student to
write test questions that are then handed out to the rest of the class.
Like the Change Insurance, the challenge should be viewed as an indication
of HighJump's confidence in its product and not as a genuine call to arms.
Supply chain execution system implementations are risky and expensive.
HighJump's change insurance seeks to relieve some of these uncertainties
and will offer peace of mind for some. As with any insurance policy, users
should read the fine print carefully and understand the implications before
signing up. In addition, the challenge invites competing software companies
to meet HighJump in its arena on its terms but leaves details of conducting
a selection to the user. Users should enlist the services of an independent,
third-party selection consultant who can bring a sound methodology and
deal with competing vendors on their behalf. Live software demonstrations
and competitive price estimates are important parts of any competent selection.