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Finalist Best Technology 2003 Finalist Best Localisation Solution 2003.

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Presentation on theme: "Finalist Best Technology 2003 Finalist Best Localisation Solution 2003."— Presentation transcript:

1 Finalist Best Technology 2003 Finalist Best Localisation Solution 2003

2 Decision, decisions, decisions…  Decision –To Build internally –Or License  Fundamentals of decision –Maximise Shareholder Value –Maximise ROI on investment  Three Pilars of ROI Analysis –T.C.O –Functional Capabilities –Project Risk Localization Technology

3 ROI : Return on Investment  ROI : The Key to Success –First step Identify criterion to base your decision on –ROI selected Financial perspective Primary decision criterion –Simplest Method Pay-BackPay-Back – Time taken to earn back investment MultiplierMultiplier – Amount of Pay-back over time –Most Critical Factors in ROI analysis TCO – Total Cost of Ownership Functional Capabilities Project Risk

4 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO

5 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Relationship ROI/TCO TCO TCO analysis enables organizations to identify, project, measure, and track direct and indirect costs of a localization technology initiative.

6 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Relationship ROI/TCO TCO ROI As the TCO of a project increases, the ROI decreases. TCO ROI There is an inverse relationship between TCO and ROI.

7 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Relationship ROI/TCO TCO ROI A low TCO not only reduces an organizations operational costs, but also effects the financial success of a localization technology initiative as measured by ROI.

8 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Design & Development Costs Pay Now or Pay (much more) Later !

9 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Application Architecture Single most important factor An optimal architecture is Flexible, Multi-tiered Scalable, Object-Oriented Developing Developing this is Challenging Time-consuming Costly Not developing Not developing this is even greater Higher maintenance costs Poor performance, Scalability, flexibility

10 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Application Data Model Application Data Model impacts Application Data Model impacts Performance Performance Scalability Scalability Many organization lackMany organization lack Domain expertise Domain expertise Sufficient Time (aggressive schedules) Sufficient Time (aggressive schedules) The Application DNA

11 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Application Functionality increase complexity Incremental Application features and functionality increase development costs since they add complexity Source : COCOMO II realise too late afford functionality availableOrganizations realise too late that the functionality they can afford to build themselves fails to support business needs and the functionality available in packaged L10N technologies

12 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Integration Costs Internal solutions offer Internal solutions offer Poor Integration Poor Integration Poor Interoperability Poor Interoperability Opportunities to reduce Opportunities to reduce Are limited Are limited Single instance Single instance No ability to spread cost No ability to spread cost Poor integration capabilities will increase TCO Poor integration capabilities will increase TCO

13 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Training Costs Commonly overlook Commonly overlook Always under-estimated Always under-estimated Misconception Misconception Small number of uers = Low Training Costs Small number of uers = Low Training Costs Focus on functionality rather than usability Focus on functionality rather than usability Limited scope for cost reduction Limited scope for cost reduction Many training costs are fixed Many training costs are fixed Training Manual(s) Training Manual(s) Trainers Trainers trained trained

14 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Maintenance Costs Majority of costs incurred not during development but during Operating Maintenance Upgrade 70-90% of annual budget 10% new feature(s) Maintenance increases with Bad Architecture In-adequate data model(s)

15 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Opportunity Costs Definition : When resources are limited, the decision to pursue one opportunity over another requires a company to incur one or more opportunity costs Hard to quantity and qualify Companies that do consider it Generally agree that re- inventing the wheel is prohibitively expensive from an opportunity cost perspective Companies maximize shareholder value when they accelerate their Time to market Allocation of resources to best usage

16 1 st TCO – Total Cost of Ownership  Relationship ROI/TCO  Cost Categories –Design & Development Costs –Application Architecture –Applciation Data Model –Application Functionality –Integration Costs –Training Costs –Maintnenance Costs –Opportunity Costs –Development Time = TCO Development Time Assumption : Once operational, applications deliver significant financial benefits (Revenue, cost savings) => Lost Opportunity Cost Days to design, develop, implement and deploy * Daily Benefits of Operational System To minimize opportunity costs Reduce development time Aggressive schedules Reduced functionality Reduced ROI Leads to bad deployments and user acceptance

17 2 nd Application Functionality  Critical factor impacting ROI –An applications functionality Reduces localization costs Reduces leadtime to markets Improves translation precision Improves operational efficiencies –Organisations frequently find that cost is a significant barrier to the functionality they’d like to develop –Any reduction in functionality effects all expected benefits –Trade-offs in budget vs. features Meet budget, but reduce functionality Leads to lost opportunity cost

18 3 rd Project Risk  Internally developed technologies are fraught with business and technical risks –Project Delays –Cost Over-runs –Un-anticipated development & Maintenance  When these materialize –Increased TCO –Lower financial benefits –Reduced ROI  Most common Risks are –Poor Alignment with Business Needs –Poor Scalability & Performance –Poor Organizational Capabilities –Scope Creep

19 3 rd Project Risk  Common Risks –Poor Alignment with Business Needs –Poor Scalability & Performance –Poor Organizational Capabilities –Project Scope Creep Poor Alignment with Business Needs Often said : Internally developed applications are best for meeting specific needs Reality & Experience shows this to be incorrect Reasons for this are:- Designed with little input from business users Domain Knowledge can be limited Testing is of secondary important in most cases Internal applications focus on current specific requirement and frequently ignore longer term ones

20 3 rd Project Risk  Common Risks –Poor Alignment with Business Needs –Poor Scalability & Performance –Poor Organizational Capabilities –Project Scope Creep Poor Scalability & Performance Peformance & Scalability Application Architecture Data Model Overall OO Design Inflexible designs may meet current needs but Struggle with Longer term Determining future needs is one of the most vexing challenges of design/development Impossible unless exposed to many customer requirements from many sources

21 3 rd Project Risk  Common Risks –Poor Alignment with Business Needs –Poor Scalability & Performance –Poor Organizational Capabilities –Project Scope Creep Poor Organizational Capabilities Companies with immature application development (AD) processes run the risk of High TCO and Low ROI Companies poor in AD technology have trouble delivering robust application & technologies ina timely manner Companies with poor AD In-adequate Project Management Poor development methodologies Poor Project Metrics Inadequate domain knowledge Poorly implemented QA strategies

22 3 rd Project Risk  Common Risks –Poor Alignment with Business Needs –Poor Scalability & Performance –Poor Organizational Capabilities –Project Scope Creep Project Scope Creep Initial Scope will increase after the design stage Poorly documented user requirements Incremental functionality May impair original design if not flexible, extensible and robust enough Increased Development costs Increased TCO Reduced ROI Delayed Deployment = Opportunity Cost Continued ‘Jumping Through Hoops’ scenario

23 Conclusions Build vs. Buy Decision Build vs. Buy Decision Project Risk Project Risk Functional Capabilities Functional Capabilities Total Cost Of Ownership Total Cost Of Ownership Conclusion #1 ROI Analysis can play a critical role in the decision to implement a packaged localization technology strategy

24 Conclusions Build vs. Buy Decision Build vs. Buy Decision Project Risk Project Risk Functional Capabilities Functional Capabilities Total Cost Of Ownership Total Cost Of Ownership Conclusion #2 Given the substantial costs and risks of internally developed localization technolgies, most organization will conclude that packaged applications are the most logical and prudent means by which to execute a globalization technology strategy.

25 Questions

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27 The Company...  The Pioneer of Software Globalization Solutions –Developed 1 st ever Integrated Localization Environment for software applications – 1995 –The Market Leader in Software Globalization technology  A new beginning… –Management buy-out late 1999 by original developers of Corel CATALYST TM –Sales growing 40+% annually –Currently 8,000 customers worldwide –Offices in Ireland, USA and one planned for Japan  Continuing the Gold Standard …. –Integrated Runtime Validation January ’ 01 –The Secure XML Solution August ’ 01 –The World ’ s First.NET Localization Solution June ’ 02 (Component Library Manager Technology) –Alchemy CATALYST 4.0 : Server Edition Sept’02 1 st … and Pioneering Spirit of it ’ s founders

28 Some recent awards… Finalists for 2003 Awards Finalist Best Technology 2003 Finalist Best Localisation Solution 2003 Winners 2002 Awards

29 Localization Technology Build Vs Buy Decision  Introduction –Localization Technology The Build Vs. Buy Dilemma  ROI : Return on Investment –The Key to Success  Total Cost of Ownership –TCO, Key Cost Categories  Application Functionality –Limiters, Cost Factors  Project Risk –Business Alignment  Conclusions  Q&A


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