Speaking at the Trade-Ranger 2004 Community Conference last month, Total’s CIO, Philippe Chalon, revealed that 59% of Total’s IT budget went on applications. Of this, 14% goes on hardware, 14% on software, 29% on OPEX and the remaining 43% on ‘integration.’
Chalon is not happy with this state of affairs, and points out that such excessive integration spend is not only a loss to the end users, but is hardly a bottom line benefit to application vendors—in particular, SAP.
One problem is that software generally does not cover all of the user’s business needs and requires customizing before roll-out. Another issue is that there is no stable interoperability platform available today. Chalon does not believe in a ‘single vendor solution,’ and prefers a ‘platform for best of breed applications’. Standards are key—these can be technical or just catalogs. Security is a big issue for Total, as is performance. A one second latency in a satellite link can be detrimental to integration and application connectivity.
Short cycle releases
Compounding these issues is the fact that the vendor’s business model is one of ‘short cycle releases and constant change’. This is where the absence of a solid IT architecture is felt most. ‘For things to change, you need a solid architecture at every level.’
New business model
Chalon advocates a change in the IT business model—suggesting that suppliers should include the cost of integrating their applications into client IT systems. Such issues need to be addressed for each new release, and should include any required data migration. Software installation and integration of all pre-approved connected applications should also be a part of the service package.
More for SAP
Chalon pointed out that this approach would mean that companies like Total would be paying less to the systems integrators, but more to application vendors.
Chalon is wary of SAP which is ‘very powerful’ and comparable to IBM twenty years ago, or to Microsoft today. Chalon pleaded with the SAP representative Usman Sheikh to ‘stop growing your perimeter, you can’t be the best in all fields’. Sheikh refused to apologize for SAP’s growth or the company’s aggressive release cycle, but promised to ‘ease the pain’ of upgrades.
See our report from the Trade Ranger conference in this issue.
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