05.04.04
 By
Eileen Strider
Critical work in your organization is directly
tied to the fate of your software vendors. So when PeopleSoft buys
J.D. Edwards or Oracle attempts a hostile takeover of PeopleSoft,
you are understandably nervous. Your nervousness usually does not
stem from your love of PeopleSoft, J.D. Edwards or Oracle, but because
the future of the software products you use everyday to run your business
is now questionable at best and in jeopardy at worst. The potential
buyers reassure you with promises of long term support and future
product enhancements. But would you bet your own money on these promises?
Regardless of your vendor's current status, no
software company is immune to the possibility of a merger, acquisition,
or takeover. What can you do besides sit around and fret, ignore it,
or just hope for the best? Plenty. Here are actions to take if your
vendor is a target or even before your vendor becomes a target. |
Talk with your state attorney general's office to hear
what efforts are underway to protect your investment. Express your
opinion and gather information. Talk with other peer organizations
to hear their perspectives. You may want to go as far as talking
with the Department of Justice.
Explore options for reducing dependency on your vendor
for support such as:
-Train in-house staff to provide the necessary support
-Research outsourcing support options
-Consider forming a support consortium with businesses
like yours
None of these options is a silver bullet; but it's better to have
a game plan than to be strictly at the mercy of the vendors. These
options involve work, management, and money but may provide long
term protection at a lower level of risk.
Review your contract to understand what legal protections you
have and the terms and conditions under which you can invoke these
protections such as escrowed source code or money-back guarantees.
Investigate the potential buyer's software products. If
you evaluated their products in the past, revisit their current product
offerings. Talk to peers in companies using their products. Perhaps
you will welcome the change based on what you learn or realize how
critical it is to protect your investment.
Conduct a risk assessment specific to your business and software
situation. This is the most valuable action you can take. Develop
mitigation strategies to use if any risk becomes a reality in the
following areas:
-Contractual terms and conditions, specifically any protections
included or excluded from your contract.
-Financial obligations, specifically related to a change
of vendor ownership.
-Technical infrastructure risks including the underlying
products you are using such as database management systems, operating
systems and middleware.
-Software support risks such as vendor knowledge of
the product and technical support skills.
-Implementation and upgrade issues if you are in the process
of installing or upgrading software products.
-Conversion issues and costs if you are forced to convert
either the application software itself or underlying infrastructure
products.
Don't wait for a decision on an acquisition or merger to assess your
situation. Take action now to assess your risks and develop mitigation
strategies to protect your investment.
About the Author:
Eileen Strider conducts project reviews, project retrospectives, and
IT organization assessments based on experience as a developer, project
manager, IT manager, and CIO. She provides coaching for business and
IT executives and fills in as a temporary CIO. With her partner Wayne
Strider, she leads the annual Strider & Cline Leaders' Forum. Her
articles have been published in STQE magazine and on Stickyminds.com.
To read more articles, go to http://www.striderandcline.com/takeaways.shtml
or contact her at eileenstrider@worldnet.att.net.
Read this newsletter at: http://www.ctoupdate.com/2004/0504.html |
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