Some obvious benefits of standardization have been financial. Longer-term enterprise agreements with key suppliers offer cost protection that makes budgeting easier. And going for an integrated approach has enabled CLP to replace best-of-breed programs with versions that perform adequately and are less costly. Running databases off Microsoft SQL Server, for example, is roughly ten times cheaper than before, says Brisbane-Cohen, who has been pleasantly surprised by the system’s steadily improving robustness.
There have been less tangible payoffs, too, like fewer hassled executives griping over files they can’t open and applications that work in one situation or location but not another. And because so much hardware and software is identical, programs and files work more smoothly with each other. If something breaks down, the cause is more likely to be known. As a result, technical support teams spend less time providing on-site assistance and more time fielding higher-value queries through centralized helpdesks. “One of the benefits of standardization is that we can centrally affect policy and management,” says Brisbane-Cohen.
If standardizing bread-and-butter desktop PCs, servers and productivity applications has been a boon, it’s nothing compared with the efficiency gains and cost savings CLP expects to achieve through integrating ERP on SAP. CLP has already installed the first components of an enterprisewide SAP system that eventually will extend to human resources, customer care and billing, and work management. Brisbane-Cohen expects a return on investment in 20 months.
Before SAP, the company relied on proprietary software, much of which had been developed in-house. “We had procurement systems, material management systems, supply-based management systems, hundreds of different applications,” says Brisbane-Cohen. Many of these will be gradually retired and replaced by SAP-based systems. In the next three years the number of IT systems in use in the company will drop by an estimated 30 percent. Apart from simplicity and interoperability, a key benefit is more economical implementation. “If you want to create an interface, it’s going to cost you 20 to 30 percent of the project. It’s a massive job. Basically we’ve outsourced our interfacing costs to SAP,” he says.
No Easy Answers
Still, standardizing is by no means the only answer. The seductive claims of vendors pushing end-to-end solutions need to be balanced against the flexibility of made-to-measure applications as well as a CFO’s natural desire to maximize the lifespan of existing systems. Anecdotal evidence suggests most enterprises in the region still haven’t figured out the optimum mix. “As a result of the legacies most organizations have, I can’t think of an example where we’ve opened the bonnet and haven’t seen spaghetti,” says Lee of EDS. He also claims that the CFO of a major international bank in Asia admitted to him that the bank still had 150 different systems for capturing customer information.
And not everyone agrees that standardization is necessarily productive. Some feel the modern IT environment has become too complex for a “one size fits all” approach, and that however much the latest blockbuster enterprise suites are touted as fully integrated, getting the moving parts to operate in sync can be unexpectedly labor-intensive. “What companies don’t realize is that a massive amount of customization needs to be done,” warns Robin Giang, research manager for IT solutions for IDC Asia/Pacific. Others are more deeply skeptical. Alex Mayall, managing director of research services for US-based consulting, integration, and outsourcing provider Computer Sciences Corp., believes standardization can kill innovation — especially when applied to the core business activities on which a company competes.