Bill Gates once said, “Business will change in the next ten years more than it has changed in the last fifty years.” Technology is changing so rapidly today that it will be even faster tomorrow.
Ten years ago, smartphones were rare, artificial intelligence was science fiction, and cloud technology was in its infancy. The fact of the matter is that today, due to the pace in changing technology standards and security requirements, the average IT investment will last you less than ten years before you will need to replace or upgrade.
This means if you buy a Line-of-Business (LOB) solution that takes 4 years to implement, you have 4-6 years to use that technology after go-live until you need to replace or upgrade it. Beyond implementation, you may opt for an upgrade to your aging system, which on average can take multiple years as well. By the time you flip the switch to leverage your upgrade features, they are potentially 1 to 2 years behind other technological advancements. Given this nature of the business, most agencies take 12-18 months to develop an RFP and get funding, meaning that the day after you go-live, you should already start planning for your next LOB replacement project.
What has also changed with rapidly evolving technology are the expectations from your agency. They expect better customer experience, intuitive self-service tools, and faster resolution to their queries. We understand these prolonged business replacement project timelines and increased expectations from your audience are taxing your already overextended staff.
This is the primary reason business outcomes should always take priority, not systems – modern or legacy. What you should try to do is pivot instead to an organization that can fluidly achieve local and global business outcomes with solutions based on partner ecosystems. Choosing the right technology partner will help you achieve your business goals and leave you and your staff to focus more on solving the real problems encountered by your members and employers.
Rapidly changing technology is one side of the coin; the other side is the cost. When partnering with a software vendor, understand the long-term upgrade efforts and costs accompanying it. Compare this to other software and hardware upgrades you encounter. Most of us experience low-cost upgrades on a very frequent basis, why should your software break this mold? Trying to leapfrog to the newest version of the software from older versions is often fraught with complexity and involves higher investments.
This implies that choosing the right partner who prioritizes upgrades is imperative.
That brings us to the next question – What should you consider when upgrading your software?
Here are some considerations to help you choose:
The total cost of ownership – given what we have laid out so far, you should heavily consider the total cost of ownership over 10 years, at a minimum.
Many agencies make the mistake of only comparing “project” costs. The truth is that there are many hidden costs that partners might not talk about – like licensing and upgrade fees. In many cases, it’s the premium price for enhancements and upgrades from many software vendors that make it financially impossible for an agency to upgrade. Bypassing upgrades to your system is simply something you cannot afford to do either.
In the graph below, Sagitec has collected upgrade cost data and compared the total cost of ownership for Sagitec’s Platform against an average of what our competitors charge. You can see that at the time of an RFP, Sagitec’s project price point is comparative to our competitors. However, each time a competitor charges an upgrade fee (depicted by the dots) your total cost of ownership with Sagitec provides an average of 30% savings over 20 years. You need a trusted partner to realize this total cost of ownership, and we want to be that partner for the next 20 years.
Upgrade frequency – In order to avoid the inevitable traps of technical obsolescence, your underlying technology should be upgraded regularly (somewhere between quarterly and yearly). This likely means your organization needs to adapt to become more agile and flexible to handle smaller changes at a higher volume. If establishing your organization in this manner saves you millions of dollars while avoiding the pain and agony of a replacement project, it’s worth it!
Budget annually and for more evolution – This may seem counter-intuitive but an architecture designed to upgrade your underlying technology without impacting your business functionality is the solution you should look for. You should have the ability to scale to the needs of the industry whether it be security, user-experience, or proficiency. An upgrade is the foundation for evolution, but not necessarily the evolution itself. You will need to budget funds to take advantage of your new technology. The average agency is budgeting somewhere between 1-3% of the original implementation fee on an annual basis for solution evolution beyond the traditional support costs. For example, UI/UX trends and standards change every two to three years. This is an example of an enhancement that you might decide to take after your annual upgrade positions you for continuous improvement.
Upgrades should also provide new features to help you do more with less – As part of the upgrade process, your partners should be able to provide you new, improved features that help your staff be more productive and efficient. For example, as part of Sagitec’s upgrade to platform 7.0 for our clients, we will be providing features like an app to app integration and offering it as a service (PaaS) so our clients can make the best use of our platform. Our platform maintenance includes upgrades to keep your technology stack up to date on a proactive basis.
The pervasive vendor strategy of "ripping and replacing" enterprise software every few years is a flawed business model that you pay for with a high cost of ownership. It doesn't warrant State and local agencies paying millions of dollars for software solutions destined for relatively short lifespans. At Sagitec, we've adopted a distinct objective: create enterprise software using an enterprise low-code development platform that withstands shifts in underlying technologies. Improve enterprise software, not by focusing on point-in-time business functionality, but by eliminating the risk of technical obsolescence. Our success depends on your success, which we can only achieve by ensuring your solution is perpetually up to date. You can only ensure this in a cost effective, budgeted manner. We are providing the smart choice for you to achieve that goal.
All of these factors are taken into consideration by a true partner. Moving from being just an IT vendor to a partner takes transparency, responsiveness, and trusted collaboration. Use these pointers as a secret sauce to getting the right partner whose architecture and long term vision supports a streamlined upgrade process to get the most benefit for your agency. For more information, be sure to download our white paper below.