What are the myths about software employees

Business software

The software market is changing massively. Apps, mobile devices, cloud computing and software as a service (SaaS) are increasingly calling into question the old paradigms of how companies select, implement and use software. At the same time, however, there is also growing uncertainty on the part of the user as to which trends are already ripe for practical use and which hype it is better to keep away from at the moment. The IT managers can, to a certain extent, base their decisions on hard facts, but they are also partly influenced by assumptions, theses, opinions and myths that haunt the market and industry.

But are these assumptions also correct? Forrester analysts Stefan Ried, Pascal Matzke and Holger Kisker have collected the ten most widespread software myths and subjected them to a reality check. The benchmark against which the myths had to be measured was a survey of almost 2500 IT decision-makers from Germany, France, Great Britain, Canada and the United States. In it, the CIOs explained at the end of last year how they are currently purchasing and using software and what they think of new software trends.

Myth 1: Enterprise Resource Planning (ERP) remains a top priority for most organizations when it comes to business software.

Reality check: Not correct.

Forrester has determined that business intelligence (BI) has been high on the priority list of enterprise software projects since 2011. This applies to extensions to existing installations as well as to new implementations. Four out of ten IT decision-makers surveyed are planning a BI project this year. Projects relating to customer relationship management (37 percent) and collaboration software (35 percent) are also currently in demand. ERP topics only followed in the other places: every third IT decision-maker surveyed has a project in the field of finance and accounting software in the planning stage, 28 percent are working on an ERP project. However, if you put the last two segments together, Finance / Accounting / ERP would be at the top of the list of priorities.

Forrester advises that IT decision-makers should not neglect the perspective of the departments when making decisions about application acquisitions and projects. For specialist users, additional analytics functions promise more concrete added value in their day-to-day business than an expansion or modification of the core ERP system.

Myth 2: Public social networks have already become firmly established in the everyday business of companies as well as in the environment of enterprise applications.

Reality check: Not quite right.

In the ranks of those responsible for IT, there are apparently still many reservations about Facebook, Twitter and Co. Almost half of the respondents still have concerns about integrating public social networks into the internal collaboration infrastructure. Rather, they were careful to strictly separate Facebook and Twitter streams from corporate applications, the Forrester study found. Only 14 percent of IT decision-makers stated that they wanted to link social networks more closely with their own business applications. After all, every fourth IT manager questioned expressed the wish that the providers of business software should equip their applications with more social media elements.

The Forrester analysts recommend that users approach the social media world with the latest versions of business applications. A number of software providers would meanwhile enrich their products with social collaboration functions, for example in the CRM area. These products could provide a good starting point for companies to use social networks.

Myth 3: Individual development is dead - standard software packages live a long time.

Reality check: Not correct.

User companies spend just as much money on individual in-house developments as they do on standard software, according to the Forrester survey. According to this, the share of packages such as SAP's Business Suite in the total software budget of companies averages 25.8 percent. In-house developments have almost the same share at 25.6 percent. There are mainly functional reasons why custom software is still in great demand. Often the standard packages would not offer the functions required by the users. In addition, according to the Forrester study, companies expect lower costs and less complexity from in-house developments.

The analysts recommend IT managers not to purchase a large software suite if basically only a small section of the functions offered is required. Individual software could definitely be an alternative. However, the need for changes for in-house developments should be as small as possible. Financial software in particular is subject, for example, to financial or tax-relevant regulations that change frequently. While users would have to enter the necessary modifications themselves for in-house developments, the providers of standard software took care of them as part of maintenance.

Myth 4: Companies only use cloud offerings for flanking peripheral applications and not for core applications.

Reality check: Not correct.

The Forrester analysts expect the software market to balance itself roughly equally between classic license business and cloud-based rental models by mid-2014. Above all, software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) offerings would be more and more popular in the future.

In light of these shifts, Forrester recommends that users review their entire sourcing strategy - especially as the lines between the various models are blurring. Many software providers are now also offering interesting rental models for on-premise software. There are also various options for converting purchased licenses into cloud models.

Myth 5: Software as a Service will replace on-premise software.

Reality check: Not correct.

Only in the first phase of the SaaS adaptation would applications from the cloud have replaced classic on-premise software, the Forrester analysts found. This happened, for example, in the areas of learning software, human capital management (HCM), collaboration and customer relationship management (CRM). However, this trend is slowing down. In the future, especially when it comes to collaboration software, there will be more hybrid constellations in which SaaS tools complement existing on-premise installations.

From the perspective of the Forrester analysts, IT managers should therefore pay more attention to offering the functions their business users want with the help of dedicated SaaS tools, instead of replacing entire systems. This is recommended, for example, for human resources (HR) applications, which can be expanded with individual special SaaS modules, for example with functions for goal and talent management.

Myth 6: SaaS only works with standardized commodity applications.

Reality check: Still correct.

In the initial phase, the success of SaaS was based on the fact that many users had access to a uniform common code base for the respective application. Due to the resulting economies of scale, the SaaS providers were able to operate their solutions very efficiently and offer their customers affordable prices. According to Forrester, this model will be increasingly supplemented in the future by applications for special industry-specific processes in the SaaS model.

In view of this development, IT decision-makers should also consider SaaS options as part of their industry or branch-specific processes. Such special solutions could arise especially around platform-as-a-service offers (PaaS).

Myth 7: Pure cloud providers will continue to dominate the SaaS market in the future.

Reality check: Still correct.

Pure SaaS providers such as Salesforce.com have made cloud and service models acceptable in the software environment. IT decision-makers still preferred these specialists when purchasing SaaS solutions. However, the classic software providers will catch up in the coming months, according to the Forrester survey, according to many CIOs. In three years it will no longer matter whether a provider is a pure SaaS specialist or a classic on-premise protagonist. IT decision-makers then expected that every software manufacturer could also put a SaaS offer on the table. The classification of the providers in different boxes is moving more and more into the background. It is more important that the business logic of the software fits the business requirements of corporate customers.

IT decision-makers should therefore not wear blinkers when choosing SaaS solutions. In addition to the pure SaaS providers, the classic software manufacturers would also have to be taken into account - for example Microsoft Dynamics CRM Online next to Salesforce.com or SAP Business ByDesign next to Netsuite.

Myth 8: The hybrid cloud is just a new hype.

Reality check: Not correct.

According to the Forrester survey, more than half of all IT decision-makers prefer a clear separation of running an application either in the cloud or on-premise. However, one in four CIOs is already thinking about running applications for certain business processes partly in-house and partly as a software service - i.e. in a hybrid environment. After all, ten percent are even considering using and orchestrating different cloud offers for a specific process.

IT decision-makers should keep an eye on the option of hybrid environments. Offers from SaaS providers should also be rated according to how well their solutions can be combined with classic on-premise software or other cloud offers.

Myth 9: PaaS competes with classic middleware and platform software.

Reality check: Not correct.

In view of the trend towards hybrid infrastructures, PaaS offers and classic middleware and platform software do not get in each other's way - in fact, from the perspective of the Forrester experts, they complement each other. Functionally, conventional middleware offerings including business process management (BPM), service-oriented architectures (SOA), .NET and Java environments would offer the same as PaaS-based integration solutions.

When choosing their middleware and platform solutions - be it in the cloud or on-premise - CIOs should not only pay attention to the range of functions offered, but above all also to interoperability. How complex and expensive it is to set up and operate the entire system depends on the ability of how well and easily a corresponding solution can be integrated into your own infrastructure.

Myth 10: App stores only work in the public cloud and with mobile devices.

Reality check: Still correct.

Most companies still attach great importance to maintaining control over their application landscapes. Public app stores, in which providers can post any applications and from which users can freely choose, do not fit into the concept. However, the wishes of the users have changed, who have come to appreciate offers such as the Apple AppStore and Google Play in their private lives.

Forrester therefore advises IT decision-makers to allow internal app stores or a suitable, regulated excerpt from public app stores as a governance instrument for software use in the future. If users take on more responsibility themselves, they will also become more aware of what concerns their own software and license consumption. It is important for companies to develop an app store strategy and to integrate this into the future IT sourcing concept.

CIOs need to be vigilant

Basically, the Forrester analysts recommend that IT managers keep their eyes open, especially in view of the many changes in the software market, in order to be able to set the tone themselves. If management and specialist departments first had to make the IT department aware of new solutions, the role of IT as a strategic partner would quickly come into question. On the other hand, those who proactively promote innovative technologies and solutions in their own company position themselves as business innovators.

In view of the ongoing cost pressure, the CIOs would have to carefully balance their software budgets despite all the innovations. Anyone who invests too much in classic licensing offers may tie up too much capital and thus curtail their opportunities to introduce innovative solutions. On the other hand, those who put a lot of money into new types of cloud offerings too quickly may overwhelm their specialist users. Then accusations can quickly be raised that the money was wrongly invested.