Gartner estimates that one-third of IT projects in small to medium size organizations exceed budgets and schedules by 100%. That statistic does not include the sizable amount of projects that exceed budgets by 40, 50, 60% or more. That is a lot of cost overrun and schedule delays.

There are a couple of principle reasons why intranet projects dramatically exceed budgets and schedules. One is not operating with a true plan that specifically details the needs and requirements of the business, management, and the end users. Without a detailed blueprint, the project is left wide open to scope creep and meddling managers and executives that begin to ‘design by whim’ and re-engineer an unsound project.

A second principle reason for cost and schedule overruns is faulty budgeting. For example, an off the shelf portal or content management system (CMS) normally requires far more than just licensing and maintenance fees. In fact, it’s not uncommon that licensing fees only represent 5-15% of the total project cost – excluding staffing requirements.

“In the same way the cost of owning a car doesn’t end when you buy one and drive it off the lot — with insurance, maintenance, parking and gas— you have to budget for ongoing CMS costs,” writes Tom Marciniak, Senior Consultant, Prescient Digital Media, in  More than the sticker price: budgeting for a CMS Managing Web 2.0.

“It’s easy to see how the ballpark figure you scribbled on a napkin and labeled “Cost of CMS” can be more involved than the initial figure that a vendor’s brochure or sales rep states,” says Tom.  

“I was once sitting with a client on a conference call with a CMS vendor sales rep who was asked about what training costs would run. The client’s eyes widened noticeably when the sales rep quoted a fee that was greater than the initial CMS license! The client was then further taken aback when they were informed of the extra (and mandatory) annual support and upgrade fee.”

Read the full article More than the sticker price: budgeting for a CMS Managing Web 2.0.

Most of our fellow web heads use Internet Explorer to browse the net. However, more and more are using Firefox, the free open source platform. In fact, there have been almost 200 million downloads to date. In Germany, 45% of web users use Firefox.

IBM has embraced open source with both arms. Red Hat is a billion-dollar company that focuses solely on open source integration and implementation (namely the Linus operating system). With $300M in annual revenue and a profit margin of nearly 27%, Red Hat has proven the financial viability of riding the open source train.

One company watching the open source content management and intranet sector closely is Optaros. An Optaros survey released last Christmas highlights the potential value of using Open Source.

The study was conducted in August and September 2005 with responses from 512 U.S. companies, government agencies and other organizations. The study found that the clear majority of organizations (87%) were using open source systems, software often available for free and built by communities of software developers. The most frequently-used open source software was the Linux operating system, the Apache web server, and web browsers, used at some level by more than 70% of the companies represented by the survey participants. About half the respondents were using open source database management systems and application servers in a single business function.

Sampled companies ranged in size from small organizations with revenue under $50 million to large organizations with revenues over $1 billion. The move to open source software is in part explained by the cost savings that companies are generating. Organizations with annual revenue of more than $1 billion saved an average $3.3 million in 2004 from their open source software. Medium-sized companies (with revenues between $50 million and $1 billion) saved an average $1.1 million, and companies less than $50 million saved about $500,000. Several survey respondents reported substantial savings: a technology company cut costs by $20 million, and four companies (three of them telecommunications firms) each saved $10 million last year.

Gaining in popularity are open source business applications software such as portals and content management systems. Some 42% of the survey participants had open source portals and content management systems that supported a single function. Some 16% used open source customer relationship management systems, a percentage that will double in the next three years.

Open source content management is becoming hot. Seth Gottlieb is the Content Management and Collaboration Lead at Optaros and he’s watching the enterprise and intranet space closely.

Some of the open source solutions that Seth watches include:

• Brocalage
• OpenCMS
• Magnolia
• CPS
• Alfresco
• Joomla
• Typo3

However, Plone is Seth’s favorite. “I particularly like the (Plone) founder’s approach of “less is more, ” says Gottlieb, speaking this week to the team at Prescient Digital Media. “Plone has a very user-friendly interface as well as a plug-in architecture for adding on other applications.”

The one detraction to Plone, Gottlieb notes, is using Plone as an architecture for building new applications. A problem he likens to Lotus Notes application development.

A couple of other findings from the Optaros study:

• The study found that once organizations start using open source software, their usage typically increases.
• Most companies were confronted by four primary barriers to achieving even greater benefits:

·         Uncertainties about open source software that often relegate the software to the IT function

·         Lack of understanding of licensing and legal issues around open source software

·         Software cost allocation policies that discourage business functions from reducing the cost of commercial software

·         The difficulty of identifying, evaluating, purchasing and maintaining open source software

Are you using open source? Why not?

RELATED READING:

The growing popularity of open source intranets

Open source solutions for Lotus intranets

Open source intranets

Sex, Lies, and CMS Vendors

© 2006 Toby Ward - Prescient Digital Media