By Al Speranza
For some time, government agencies have been attempting to move away from heavy capital expenditure, shifting IT expenses to a new operating model that enables the addition of new capabilities, more easily and in far less time, than traditional application architectures would have needed. The management benefits are obvious and have played a big part in the push for consuming technology solutions via the cloud.
For years, public sector CIOs have faced unrelenting pressures to do more with less, but at the same time they’ve been unable to afford big-bang, transformational change in order to meet these demands. This challenge is especially acute in smaller agencies and in local government.
In this context, the appeal of incremental change, and a gradual move toward purchasing IT as a service via the cloud, is strong. An incremental approach minimizes rollout risk – problems, however unlikely, are contained and can be addressed with less trouble along the way. The wait for ROI is dramatically decreased as solutions are run in a controlled and pre-configured environment. Over time, and leveraging the cloud as a conduit to quickly adopt new technologies, customers can scale from small initial projects to large enterprise deployments with next to no risk.
The per-usage pricing model fits well with the capital and resource constraints of agencies , but for all its appeal, it can be a challenge to gradually move sensitive agency operations (and in the public sector, all operations are sensitive) into a service-based model. The best service-based solutions also have their own licensing costs, although these are now carried under operating expenses as license fees in smaller annual increments.
IBM and SAP have partnered to make it easier for agencies of all sizes to access SAP’s world-class public sector solution portfolio with the economies of scale provided by a shared-service model. The shared service model is increasingly popular with large IT spenders for its economies of scale, but is not always accessible to smaller buyers. Under this agreement, agencies can essentially pool their spending power in a hosted IBM environment, maintaining their own SAP environment, however small, in this larger hosted context. Agencies that might not have considered best-in-class solutions can now run portions of their agency or their entire agency on an SAP environment.
Public sector buyers will benefit from a stable, affordable, and low-risk approach to modernization and operational streamlining projects – gradually, rather than overnight, with the costs spread over years as part of operational expenses. Best of all, these projects are backed by two of the most trusted names in the industry – IBM + SAP.