By Nikki Baird, Managing Partner
10/13/2009
In terms of future-proofing software, there has not been a lot of innovation. SOA - services-oriented architecture - is probably as close as we've gotten as an industry, and there is still a long way to go before SOA becomes a standard, must-have-it, no-questions-asked part of the average retailer's infrastructure.
In the meantime, retailers are still implementing a lot of technology, still implementing a lot of solutions, and still developing custom solutions to fill the gaps - all tied together with expensive integration. The result might be "exactly" what the retailer wants and needs, but from a maintenance perspective, it turns out to be a lot of "not exactly." In fact, retailers continue to drown under maintenance requirements, to the point that it stifles their IT departments' abilities to provide the innovation that the business needs to maintain differentiation.
At Aldata's user conference last week, the company discussed a new approach to this age-old challenge. It started rather innocuously. The company is refining its development and delivery processes, and the next release will have a longer span than typical. To get customers over the gap, Aldata will help them get planned base functionality sooner through "Bespoke Maintenance Agreements" (BMA) - a client will pay to help accelerate the development of the needed functionality, along with maintenance to support it, until the release where it is included is available. At that time, the extra, bespoke maintenance payment goes away, but the functionality is included in the core product and supported under the standard maintenance fees. Fine, that makes sense. In fact, it really puts the burden on retailers to decide how much that "needed" functionality is worth. Is it worth the cost or can you wait?
But then the company went on to say that if there are functionality gaps that won't be included on the roadmap, the BMA would also be available to support that custom development. Here's how it works. The client contracts with Aldata to develop custom functionality. The development work is at competitive rates, and benefits from the deep expertise in Aldata functionality and architecture, which theoretically offers dual benefits: a slightly shorter development time, and better alignment with the core app. The client pays Aldata bespoke maintenance on this custom development, and in return Aldata will guarantee that the functionality will never be version-locked - it will migrate to new releases.
This is a fascinating offering, with a whole host of implications. Version-lock thanks to custom development is probably the number one reason an end-user company throws open a vendor selection process. If you have to re-implement in order to upgrade, why not see what else is out there and how it compares? And in the meantime, the existing situation is a nightmare for both the retailer and the vendor - spawning support issues, drawing out the time and resources that both vendor and retailer have to put in to maintaining old, moribund versions of the core app, and more. When the version-lock gets too bad and the age of the app is too old, the retailer goes off maintenance, and it becomes a risky situation for the retailer and vendor both - the retailer, if some kind of issue comes up beyond their ability to resolve, and the vendor, now that the retailer is an island of its own and potentially facing that open-market comparison of functionality, rather than a smooth upgrade path.
Having the software vendor that provides your core app also provide your customizations is an interesting alternative, because it gives them better insight into your business, which in turn can end up in the core app, even if it didn't start out that way. If your custom functionality is innovative enough, why not add it to the core app and bring it under the vendor's full umbrella of support? If it does get rolled in, then the on-going bespoke maintenance fees evaporate and the functionality is supported under the core maintenance.
But the biggest deal to me is the tackling of integration costs. If Aldata is willing to guarantee that custom functionality that they develop is going to maintain its integration to future releases, what a burden it removes from the retailer. Granted, as Aldata's SOA strategy becomes firmer, supporting those integrations becomes easier, but as far as I can see, as long as they're cost competitive on the development work, this is a win-win for everyone. A software company that is willing to put its money where its mouth is, when it comes to enabling an easy upgrade path and helping customers reduce their total cost of ownership.
How refreshing!
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