CIO Webcast talks costs of migration

HP presentation covers capital, packaged replacements

Second of two parts

The message to HP’s customers at the C-level of their organizations followed the money during the vendor’s latest Webcast. HP’s Platinum partners addressed corporate concerns about moving away from a platform that’s long delivered an admirable return on investment.

The Webcast in late January attempted to sum up the risks in remaining on the system that HP has decided to obsolete. Birket Foster of Platinum partner MB Foster said executives need to look at how the end of HP’s 3000 sales this October will impact supply of the systems. But Foster noted that even beyond this end of sales date this fall, there might be more investment that makes sense for owners of the platform.

“The job of senior management is to place investments and manage risk,” Foster said. “It’s not always necessarily the least cost investment they’ve got to be chasing. Making a continuing investment in the 3000 for the next couple of years may make great sense, because you can get a return on the short term on things like data marts, or putting a Web interface on applications.”

Foster also said that capital cycles of three to five years are typical for the 3000 owners, who tend to replace their systems about that often. Knowing at what point a company sits with its 3000 investment helps determine transition timing.

“If you’re only at year one of your cycle, it may influence the point at which people want to start this transition project,” he said. “At what point does management expect to retire the HP 3000 to avoid risk or change their investment profile in IT?”

Foster suggested that if a company wants to retire its 3000 by the end of 2005, “they might want to start now, since it takes 24 months to do it properly.” He also recommended staging a plan to match available funding across several years for migrating code or purchasing new packages.

Customers underestimate the amount of planning to do a successful migration, he added. “There’s going to need to be very good project management skills brought on board,” he said, recommending Microsoft Project or other software to do the tracking. Kevin Sparks of Summit, which is beta-testing its MPE credit union application being ported to HP-UX, said the company has spent about 30 percent of its total transition budget so far on planning.

Costs of packaged apps

Speedware’s Chris Koppe addressed the topic of using packaged applications to replace home-grown 3000 apps, speaking in a session recorded from one of HP’s Transition Tour stops last year. Such applications are likely to cost more than a customer can first estimate, and can often require a new target system running alongside the HP 3000 during their implementation.

“Don’t overestimate what you’ll get, and don’t underestimate what it will take to get there, in terms of budget and human resources,” Koppe said. Using notes prepared by all of the North American Platinum partners, he pointed to a Standish Group study that shows 55 percent of all ERP implementations run over budget, and one in three are cancelled, “usually after they have started, and someone has spent several million dollars.”

Only one project in 10 comes in on time and under budget, he added. “Best of breed software off the shelf comes at a price,” he said. “You’ll either have to customize the heck out of it, or retrain your business. If you customize, you might go so far that you can’t get to the next version of the application.”

Even a move to a new application will still require simultaneous use of an HP 3000 and an HP 9000. “You’ll need to have multiple boxes sitting in your shop at the same time,” Koppe said. HP’s offer of a six-month free loan of an HP 9000 is a pretty good deal, he added, because a customer can purchase the system at a good discount after the loan. Koppe noted that the offer is not always practical, however, “because most conversions won’t happen in six months.”

HP’s briefing from the Platinum partners on costs “is designed to make you aware that this is not a small project. This is about costing out an entire solution over a five-year period.” He then asked attendees at the taped Cupertino, Calif. tour stop who had a plan in place for their migration, one year after HP’s notice to its customers.

“One year has gone by,” he said to the audience, after seeing no hands go up, “and no one has a plan. You have to focus on making a plan. The longer you wait, the fewer resources will be available, and the more expensive those resources will become.”