Tweaking: An accepted practice

Tweaking: An accepted practice

Should companies build their own software or buy off-the-shelf versions? It depends on the industry.

Chief information officers regularly tweak off-the-shelf business intelligence software or develop their own tools in-house in a bid to work around some of the limitations of commercially available technology. They also agree that adopting further business intelligence capabilities is a priority in 2008 and note that the practice of modifying systems is unlikely to fade away.

The issue for enterprise information technology departments remains whether it's cheaper to build their own BI platforms or incur the ongoing fees that come with buying software that is then finetuned.

MIS magazine's Tech Nation 2008 report into information technology use and trends this year, due to be released this Friday, shows that the only sectors that do not prefer in-house development are education, manufacturing and government and defence.

Cognos is the clear vendor of choice in all three.

The findings were gleaned from a Fairfax Business Research survey of 2981 Australian technology organisations in six industry sectors: financial services, government, business services, education, manufacturing and wholesale and retail.

The survey found 9.9 per cent of respondents in the finance and insurance industry favour in-house developed business intelligence tools over and above commercial packages. The preferred commercial product was again Cognos, which was nominated by 9.5 per cent of respondents for the industry.

In the wholesale retail and trade sector, the use of Cognos BI tools rose incrementally year-on-year over in-house designed and customised software. Cognos was used by 11.7 per cent of respondents while 10.7 per cent favoured in-house designed and customised BI tools.

In contrast the manufacturing sector opted to use off-the-shelf BI technology. Cognos and SAP emerged as the favoured suppliers.

Amcor CIO Rob Pyne says the preference for commercial business intelligence software in manufacturing is related to managing the project costs associated with in-house software development.

According to Pyne, capped project management costs and realistic delivery time lines are two benefits of choosing commercial software.

"In-house BI software development has been flat for us - we only have one application left in-house. We still support and develop locally and we are not making any movement to bring in more in-house development, as there are concerns about managing the costs associated with in-house development," Pyne says.

"People are more willing to take and apply the 80/20 rule towards packaged software then develop the application completely in-house, as from a project management point of view - especially in terms of the budget - this is a more likely way to control costs."

According to the MIS Tech Nation survey, in-house developed BI software is the preferred method across the board in finance and insurance.

However, CIOs in the financial services sector take the idea of tweaking commercial software as an industry norm, and a few chief information officers contacted by MIS say it is just the cost of doing business in an industry already peppered with similar or like for like products.

Information technology costs are typically capped through desktop purchasing cycles or operating system standardisation in the financial services sector rather than by capping software development costs.

Mortgage Choice CIO Neill Rose-Innes says that both in-house tweaking and complete development are industry norms in the financial services sector. The mortgage broker has opted for a mixture of the two.

Rose-Innes says a mixture of commercial software packages each tweaked in-house is the only way to gain competitive advantage in an industry swamped with similar data.

According to Mr Rose-Innes it is all about how you slice and dice it.

"I don't know if it is packaged or bespoke solutions [that] players in the finance and insurance industry have been developing on their own, but the art of what they are attempting to do is understand the value of data in a database and developing their own internal capabilities," Rose-Innes says.

"There is always a place to drop in Cognos or a like product over the top of a database, but I suspect enterprise firms already have a significant element of both, plus easy-to-use 'executive usable' products.

"There is a trend towards looking at data as unique competitive advantage in the finance sector but that is not necessarily accurate - but executives tend to think like that."

© Fairfax Business Media

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