Guidelines - Tshwane Computer Solutions

15 Pages·2010·0.15 MB·English

Gartner Global IT Councils
A Gartner Global IT Council brings together IT leaders to discuss
a chronic challenge and develop a common approach to solving
it. Gartner facilitates and moderates the council, but the council’s
findings represent the council’s views not necessarily those of
Gartner. The council discusses the issues that matter most to
members and offers the solutions that members believe will work
best for them. Council meetings encourage open discussion that
will result in real-world recommendations and drive fundamental
changes in the way the IT industry works. The document
produced by the council represents the collective voice of some of
the IT industry’s most influential, thoughtful and forward-thinking
leaders.
Gartner has established two Global IT Councils—one on cloud
computing and one on IT maintenance. A core component of
the council concept is the belief that improvements in industry
practices will benefit not only IT customers and clients, but also
developers, vendors and other stakeholders.
Each of the Global IT Councils has been tasked with developing a
set of basic rights and/or responsibilities for their specific area of
technology. Members have discussed the issues candidly and in
depth, and offered their real-world observations about problems in
these areas, as well as practical, actionable recommendations for
resolving them.
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Gartner Global IT CounCIl for IT Maintenance
A Code of Conduct for IT Maintenance
Year after year, IT maintenance—its cost, its difficulty, its expense—remains one of
the most urgent and critical issues for enterprises worldwide. Enterprises need timely,
reliable, cost-effective IT maintenance, and they are not getting it. Hardware and software
maintenance represents the single largest IT expense for many enterprises, but it is
also a huge source of revenue for IT vendors. This fundamental conflict presents many
problems for IT consumers, but it also offers an excellent opportunity for the Gartner
Global IT Council for IT Maintenance to deliver real value for the IT industry.
Rights of IT Maintenance
The Gartner Global IT Council for IT Maintenance has developed a set of basic
Consumers
principles—a code of conduct—that addresses IT maintenance consumers’ most
serious concerns. This document codifies some of the highest-priority rights and 1: The right to regular,
responsibilities of vendors and IT organizations, to spark a discussion about how
appropriate, predictable
maintenance services can be applied efficiently and cost-effectively, without damaging
updates to software products
mission-critical business processes. This discussion, which will ultimately embrace IT
organizations, vendors and Gartner analysts, should improve all parties’ understanding 2: The right to clearly defined
of maintenance issues, raise awareness of established and emerging issues, and define response times and stratified
best practices and expected consumption and execution models. IT support levels based on
application criticality and other
Gartner sees this Global IT Council as a powerful new voice for the most important
players in the IT industry—the technology and business leaders responsible for selecting, business factors
implementing and integrating new technologies and ensuring that they deliver true 3: The right to reasonable,
business value for their enterprises. We have gathered carefully selected groups of chief
predictable percentage ranges
information officers, chief technology officers and many others to discuss their most
for yearly maintenance fee
serious concerns and their recommendations for resolving them. These senior-level
increases—or decreases—as
decision makers represent different types of enterprises, different vertical industries,
well as long-term caps on
different regions and different viewpoints. But all the participants in this project share
increases in maintenance
the desire to see certain basic rights respected. The members of the Gartner Global IT
costs
Council for IT Maintenance urge their peers to ask their vendors to uphold these rights,
and urge vendors to work to make them standard across the IT industry. 4: The right to end or change
support at any time for
products that are not in use
5: The right to reasonable,
predictable levels of support
throughout product and
contract life cycles
6: The right to reasonable, clearly
defined maintenance and
support for legacy systems
7: The right to explicit statement
and approval of support details
at the line-item level
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Gartner Global IT CounCIl for IT Maintenance
Rights of IT Maintenance Consumers
The council resolved to recognize seven rights of IT maintenance consumers.
#1: The right to regular, appropriate, predictable updates to software
products
The Problem: Any new software requires updates and patches during its product life
cycle. These changes may be required to adjust minor coding flaws, improve feature
support or improve security and access controls. Patch management is a fundamental
component of all infrastructure, and both vendors and enterprise IT organizations should
have clearly defined patch management processes in place. But that is not always—or
even usually—the case. And IT consumers’ expectations of timely updates and patches
conflict with vendors’ long-standing practice of relying on new releases to win new
business and generate additional revenue.
The Council’s View: The council members said that updates are one of their most
frequent, serious and expensive maintenance problems. The problem is especially
difficult for older products. Many major vendors fail to deliver regular patches even
for applications they nominally support, supplying work-arounds instead. Council
members reported that they had to escalate these issues to the highest levels at some
“powerhouse” vendors to get timely responses.
Members related three specific experiences:
• Vendors don’t deliver patches and updates quickly enough in response to changes in
laws and regulations. One council member remarked that vendors that state that their
software is consistent with regulatory mandates—for example, the rigorous financial
reporting requirements of the U.S. Sarbanes-Oxley Act—should deliver updates to
address changes in compliance requirements by the time the changes take effect.
At minimum, the vendors should establish a clearly defined time lag for delivering
compliance-based updates.
• Vendors’ responsiveness varies widely by region. Council members believe software
vendors focus predominantly on their home countries and their primary markets, often
at the expense of secondary markets. European vendors concern themselves with
European Union regulations, U.S. vendors address American requirements, and one
result may be that vendors do not respond quickly enough to changes in other areas,
such as new tax laws in China. The terms and conditions of IT maintenance contracts
should be consistent across all countries.
• Update/patch support often deteriorates if a vendor merges with, or is acquired by,
another vendor. The council members felt strongly that contracts should routinely
contain provisions defining patch, upgrade and other support responsibilities in the
event of a merger or acquisition.
Conflicts around software updates and patches are probably inevitable. Enterprises want
to use software products as long as they deliver business value, while vendors use new
products—or new versions of existing products—to increase revenue from established
customers and attract new ones. Many software vendors rely on updates for a significant
portion of their revenue streams, and some delay the release of patches and other
updates until they can bundle them into a new release for both new customers and their
installed base.
These long-established industry practices increase costs and make long-term planning
more difficult for IT organizations. They also limit the effectiveness and usefulness of
installed software—a particularly serious problem where security patches are concerned.
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Gartner Global IT CounCIl for IT Maintenance
This is damaging not only to the enterprise, but to its customers and other stakeholders,
and ultimately to the entire IT “ecosphere.”
Resolved: The council unanimously agreed that vendors must do the following to uphold
this right:
• Offer all customers an update/patch process with clearly defined frequency and
duration timelines.
• Use a defined process for delivering emergency updates when serious operational
or security flaws are discovered, including mechanisms for notifying stakeholders in
advance.
• Align scheduled and emergency updates with contract length and product life cycles
so that enterprises can plan their purchases without paying for unnecessary or
unwanted releases.
• Negotiate IT maintenance contracts that address customers’ specific regional
support needs—particularly in response to legal, regulatory and other compliance
requirements—and provide for comparable levels of support, at comparable cost,
across all regions where the customer does business.
Lessons Learned: The council members identified a set of practices, based on their
industry experience, that they believe would help both IT consumers and vendors meet
these goals:
• Establish internally defined severity levels for product updates and patches (for
example, Critical, Work-around and Patch/Fix) and negotiate contracts with service-
level agreements that align these service levels with those of the vendor.

• Create internal product release schedules, based on the enterprise’s business

requirements, and map these schedules to vendors’ release schedules wherever possible.
#2: The right to clearly defined response times and stratified IT support Enterprise IT consumers
levels based on application criticality and other business factors
increasingly want and need
The Problem: Enterprise IT consumers increasingly want and need defined time-to- defined time-to-resolution,
resolution, because predictability is essential to keeping critical IT-dependent business because predictability is essential
processes up and running. They also want to be able to stratify IT support levels based
to keeping critical IT-dependent
on application criticality and other business-driven factors. The reason is simple: Some
business processes up and
applications support extremely high-value business processes that require 100%
running.
availability, while others relate to lower-value processes that do not need comparable
support levels. CIOs and other IT managers are under constant pressure to justify the
business value of maintenance fees.
IT vendors, however, want maintenance to provide a more profitable, more predictable
revenue stream. This means it is in their interests to resist contractually stipulated
response times and to try to upgrade customers to higher levels of maintenance, at
higher cost, even if the customer doesn’t need it.
The Council’s View: The council members noted that support responsibilities often
vary greatly by module or problem for very complex enterprise applications. The vendor
may refer one type of problem to local developers but use its core development team
to handle another type. This leads to confusion about support—for example, repeated
requests for “clarification” of a problem—resulting in delays that may last months.
Sometimes the underlying problems are never satisfactorily resolved.
The council believes vendors should offer a time-delimited escalation path in
maintenance contracts to ensure effective, timely problem resolution. (They recognized
that this would be easier to achieve with hardware installations than for software
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Gartner Global IT CounCIl for IT Maintenance
deployments.) Several council members believe that the contracts should also specify
appropriate contacts so that the right person addresses the problem.
One council member suggested that service-level agreements should align response
times with the criticality of applications, and even with service-level agreements that
enterprises have with their customers, though it would be very difficult to persuade
vendors to agree to such terms.
Council members all saw the need for different levels of support for different types of
applications. Their collective experience surfaced the three following needs:
• The most critical business processes should receive the highest level of support to
minimize downtime even during major service disruptions. Production applications,
for example, require significantly higher service levels than development applications
because of their impact on business-critical processes.
• Vendors should prioritize support according to the customer’s business continuity
management and disaster recovery plans.
• Global companies need global maintenance support. Many call centers operate only
during business hours on the U.S. West Coast, so a day may go by before call center
agents address issues in China, for example.
Resolved: The council members unanimously agreed on the following to uphold this right:
• Maintenance contracts should clearly state the response times IT vendors will deliver
for specific applications and specific issues.
• IT consumers should demand defined, time-bound escalation paths for specific
maintenance issues.
• IT vendors should offer varying levels of maintenance support based on specific
enterprise criteria, including the degree of criticality of the application being supported,
its importance in terms of business continuity management (BCM) and disaster
recovery (DR) plans, and the need for region- and time-zone-sensitive support.
Lessons Learned: The council members identified a set of practices, based on their
industry experience, that they believe would help both IT consumers and vendors meet
these goals:
• Consider negotiating contracts with SLAs that provide both incentives (for example,
additional fees) for vendors that meet or exceed agreed-upon response times, and

disincentives (for example, discounted pricing) for vendors that fail to do so.

• Align SLAs and other service expectations with BCM and DR plans and with region-
specific requirements.

#3: The right to reasonable, predictable percentage ranges for yearly The council members said that
maintenance fee increases—or decreases—as well as long-term caps explicit, predefined limits on
on increases in maintenance costs long-term maintenance costs
The Problem: IT consumers see diminishing returns on maintenance services after initial would help them control those
implementation, and they want yearly decreases—or, at minimum, only reasonable, costs and would enable more
predictable increases—unless a major new release justifies higher costs. They also realistic strategic planning in
want to cap their maintenance costs for a given product beyond a single contract life support of critical business
cycle. Vendors, however, seek opportunities within view of their installed customer base processes—and that efforts in
to grow revenue without new license sales. Vendors can charge higher fees for major
this direction are crucial.
releases, so they are motivated to unnecessarily accelerate product life cycles. They also
plan product life cycles on a longer-term basis than most consumers, and see them as a
way to increase revenue.
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Gartner Global IT CounCIl for IT Maintenance
The Council’s View: Established “powerhouse” vendors that support multiple key
processes know their customers cannot easily migrate to another vendor’s products. The
lack of leverage limits customers’ ability to negotiate for realistic increases—or graduated
decreases—in maintenance fees.
Members related the following experiences:
• Vendors lack global focus. Multinational enterprises that operate outside of vendors’
home territories have difficulty planning for maintenance fees because currency
exchange rates fluctuate. They also have to deal with rate increases based on
inappropriate consumer price indexes—for example, based on U.S. dollars rather than
on local currencies.
• Maintenance fees continue after the life of a contract. One council member related
how his company negotiated a 3% annual fee—increase the ceiling with a vendor—
without realizing that it applied only to the first year after the initial contract ran out.
The company had to pay a premium for end-of-life support and is now meticulous in
specifying that such ceilings apply in perpetuity.
• M&A activity confuses support agreements. One member pointed to a major vendor
that changed the functionality of many of its application modules after an acquisition.
The customer could not be sure which support provisions applied to which modules.
The customer now demands a detailed description of every module, something that
not every enterprise can do.
• Vendors often propose higher-than-anticipated cost increases—frequently just as their
contracts are nearing their end—knowing that the enterprise customer has no choice
but to pay if it depends heavily on the product.
• Vendors often tie long-term support cost increases to inflation rates and cost-of-
living indexes, which are highly variable, especially across multinational business
environments.
The council members said that explicit, predefined limits on long-term maintenance costs
would help them control those costs and would enable more realistic strategic planning
in support of critical business processes—and that efforts in this direction are crucial.
They recognized that these issues will be extremely difficult to resolve, requiring detailed
attention to the terms and conditions of contracts.
Resolved: The council members unanimously agreed on the following to uphold this
right:
• Fee-increase ceilings—including ceilings on increases following the end of initial
contracts—should be built into all maintenance contracts.
• Maintenance pricing should be based on broadly recognized, publicly disseminated
consumer price indexes and, where contracts are written in local currencies, inflation
indexes based on those currencies.
Lessons Learned: The council members identified a set of practices, based on their
industry experience, that they believe would help both IT consumers and vendors meet
these goals:
• Do not link percentage ranges for maintenance increases to vendors’ price lists (which
often have highly unrealistic base prices), but rather to fees that have already been
paid.
• When calculating acceptable maintenance fee adjustments, use consumer price
indexes as a baseline and compare local currencies’ performance against those
indexes to make necessary adjustments.
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Gartner Global IT CounCIl for IT Maintenance
• Where appropriate, negotiate long-term maintenance contracts with fixed fees. This
practice—which can be used with both powerhouse and smaller vendors—can benefit
both customers through pricing stability, and vendors through guaranteed revenue
streams.

#4: The right to end or change support at any time for products that are The council members said they
not in use
want much greater flexibility
The Problem: Enterprises want to be able to end support—and support payments—for in support because of the
products they are no longer using. But vendors need long-term, predictable revenue
need to address international
forecasts, so they have an obvious interest in continuing support maintenance contracts,
requirements, changing demands
whether or not their customers’ circumstances have changed.
resulting from M&A activity and
The Council’s View: The council members said they want much greater flexibility in varying business requirements.
support because of the need to address international requirements, changing demands
resulting from M&A activity and varying business requirements. They recognize that it will
be extremely difficult to achieve, but identified the following experiences to illustrate the
problem:
• Licenses don’t change according to M&A activity and other business changes.
Enterprises that have a history of mergers and acquisitions tend to end up with
significantly more maintenance subscriptions than they need. But vendors typically
refuse to cancel unneeded licenses or offer refunds. Enterprises also need the flexibility
to be able to scale their IT maintenance licenses down—and up—in response to
changes in business conditions.
• Licenses are not transferable globally. Global companies, especially ones not based
in the U.S., want to be able to transfer licenses from one region to another based on
business needs. In some countries, such as Russia, a customer can only be required
to pay for services that are actually being used, and the council members agreed that
this is entirely appropriate.
• Maintenance support offers too few choices. Vendors should recognize the distinction
between two components of maintenance contracts: ongoing support and future
product upgrades. An enterprise should have the option of paying for tactical support
without committing to future product upgrades that may not be necessary. An option
to upgrade at a later date could be available at an additional cost.
Several council members noted that the rapidly increasing use of virtualization is causing
problems in this area. Virtualization linked to processor size causes difficulties for
enterprises that wish to practice dynamic workload management—moving workloads
based on resource needs.
Resolved: The council members unanimously agreed that vendors must do the following
to uphold this right:
• Offer much greater flexibility in maintenance contracts to enable enterprises to adjust
their support levels and associated costs to address the demands of a highly volatile
business environment and reflect real-world usage levels.
• Allow IT consumers to end support, and associated costs, for applications that are no
longer in production use, and to transfer licenses from one business unit or region to
another
• Offer the option to restart maintenance support as needed—within the terms of the
original contract—if applications return to production.
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Gartner Global IT CounCIl for IT Maintenance
Lessons Learned: The council members identified a set of practices, based on their industry
experience, that they believe would help both IT consumers and vendors meet these goals:
• Do not write (or rewrite) maintenance contracts as enterprise-level agreements;
instead, tie maintenance fees to product licenses. This gives the customers greater
ability to cancel or adjust maintenance contracts as products are acquired and retired.
• Negotiate maintenance expansion/contraction clauses to cover potential mergers,
acquisitions and divestitures.
• Negotiate product license and maintenance agreements based on business
functionality being enabled, rather than on product sets. This gives the customer
greater flexibility in the following ways:
− Providing a clearer picture of the licenses and fees required for specific business
functions and making it easier to tie license and maintenance adjustments to
changes in business requirements. From the customer’s perspective, it provides
more flexibility in canceling portions of the license/maintenance when the business
no longer requires a set of functionalities. (For example, outsourcing billing and
payments would be a licensing event that reduces an in-house ERP vendor’s license
and maintenance contract by the portion allotted to the billing/payments functions).
− Holding the vendor accountable for enabling the functionality regardless of product
release, product replacement (for example, migration to Oracle Fusion) or product
duplication (for example, Oracle HR being offered via PeopleSoft and EBS).
Regardless of which vendor component is used, or whether the vendor replaces an
old component with a new one, the customer is protected from additional license
fees. This would counter powerhouse vendors’ practice of rebundling or renaming
products and then charging new, higher license fees for functionality that the
customer has already licensed under an older product-set name.
#5: The right to reasonable, predictable levels of support throughout
product and contract life cycles
The Problem: Several council members said it is commonplace for the level of support
to decline over the life of the contract, even if the enterprise is paying a fixed price for
support. In some cases, the vendor says that urgently required patches will be available
“in the next release,” or Tier 1 support becomes more difficult to obtain. This practice
frequently means enterprises need to engage third-party maintenance vendors, at
significant extra cost. Council members believe vendors do this to drive their customers
to pay for new releases they don’t need.
The Council’s View: The council members believe that better contracts would solve
this problem. They want written contracts that clearly specify vendors’ maintenance and
support responsibilities throughout the product life cycle.
Members related the following experiences:
• Lack of transparency and visibility. Contracts should include explicitly defined service-
level agreements that provide penalties for noncompliance. The vendor must have
a clear understanding of the enterprise’s business needs—what products will be
required, with what support levels and for how long.
• Disagreement on what constitutes a reasonable level of support. The word
“reasonable” is difficult to define. The enterprise wants maintenance support for an
installed product throughout its useful life, which is likely to extend well beyond its
vendor’s typical two-to-four-year window between releases. But the problem can be
addressed by requirements that support levels not drop below a certain predefined
threshold throughout the life of a contract.
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Gartner Global IT CounCIl for IT Maintenance
• Lack of communication. Vendors do not inform customers proactively if maintenance
support will drop below contractual standards. Also, contracts do not clearly define
any anticipated changes in support levels.
The council members believe that large-enterprise customers would be better-positioned
to demand clearer support definitions than small and midsize businesses (SMBs) but
recognized that this would be difficult for virtually all IT consumers. Large enterprises
could use the prospect of future purchases from a given vendor as leverage to receive
improved support for their installed products—an option not typically available to SMBs.
Resolved: The council members unanimously agreed that vendors must do the following
to uphold this right:
• Supply complete transparency regarding the levels of maintenance support they will
provide IT consumers.
• Proactively communicate—through e-mail alerts and other mechanisms—any changes
in real-world support levels.
Lessons Learned: The council members identified practices, based on their industry
experience, that they believe would help both IT consumers and vendors meet these
goals:
• Add language to maintenance contracts that limits a vendor’s right to amend or
change a contract at any time without the IT consumer’s consent.
• Add language that restricts a vendor’s ability to reduce service on existing or installed
products when new products are introduced. Ensure accountability via measures such

as contractually stipulated rebates on maintenance fees.
#6: The right to reasonable, clearly defined maintenance and support for Clearly specify in contracts how
legacy systems long a customer can expect
The Problem: Enterprises want to use their applications as long as they need them and support for a product, even after
want support the whole time, even across two versions or more than 10 years. Vendors, that product’s vendor-defined life
on the other hand, want to upgrade more often so that they only have to maintain recent cycle has ended.
versions—preferably no more than two versions or six years. This fundamental conflict
between the consumer’s and the vendor’s interests makes long-term planning very
difficult for both parties.
The Council’s View: Several council members pointed to the difficulty of determining
precisely when a product becomes a legacy application. They agreed that this is highly
problematical for vendors, which can’t always be expected to offer ongoing support
for their products. Sometimes, for example, a broad-scope product achieves global
penetration, and it becomes prohibitively expensive or even impossible for the vendor
to support all its functionality unless third-party providers are involved. While this is a
reasonable business consideration for vendors, the council believes that vendors often
try to make applications obsolete earlier than necessary, to discontinue support and drive
sales of new releases or products.
The failure to agree on a definition of the term “legacy” lies at the heart of the problem.
Most vendors believe that a product becomes a legacy application when a new
version is released, while IT consumers believe that an application in use in production
environments is a production application. The council believes that more transparency
is needed here, too. They recognized, however, that some vendors will be reluctant to
reveal their product road maps in detail because they know that some customers will
choose to continue to use legacy applications if they see little or no value in the new
product direction.
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