Hoping to help reduce the financial and technological risks to IT organisations associated with implementing enterprise resource planning (ERP) solutions, IBM last week announced a performance protection plan for its AS/400 servers.
Under the new plan, users who install ERP software from SAP AG, J.D. Edwards, System Software Associates, or Intentia on AS/400e servers can obtain a guarantee that their server will perform at a predetermined level over a two-year period.
The plan essentially provides that a given ERP solution will support an agreed-upon workload over the first 24 months.
If the system's performance falls short of those goals IBM will upgrade that server's memory, storage, or processor, free of charge.
"The net of this plan is it allows for customers not to worry about a machine not being appropriately sized. It allows them to focus on the really gnarly part of the ERP implementation," said Karen Smith, director of solutions marketing at IBM's AS/400 division.
In implementing extensive ERP solutions, some corporate users discovered halfway through a project that the hardware they purchased to fuel the solution was inadequate, IBM officials said. This often meant having to go back to the chief information officer to ask for additional funding.
"A plan such as this is always good to have tucked in your back pocket because ERP implementations often and unexpectedly expand out way beyond your initial plans," said Bruce Johnson, an IT executive at a large Midwestern insurance company.
Smith said there continues to be strong demand in the midtier markets for ERP solutions but that there are many unforeseen pitfalls, particularly in implementing extensive solutions.
"Lots of people have been burned. So we are looking to reduce their risk and we can do some of that by pre-loading and testing to improve the quality," Smith said.
"The next phase would be to alleviate some of the unknowns relative to hardware performance," Smith added.
The AS/400 plan is following the lead of IBM's RS/6000 Division, which offered a similar plan involving Baan's ERP software.
Officials from the AS/400 division said that users should expect other ERP price protection plans from all of IBM's major server divisions.
"You will continue to see offerings from each of the IBM server platforms along these lines, mostly aimed at middle-market customers," Smith said. "There are a lot of pitfalls in implementing ambitious ERP solutions. People have lost their jobs over some of them."
Smith explained how IBM works with users to set up a plan.
First, Smith said IBM determines what the anticipated usage of an ERP solution will be over the next two years.
Second, IBM determines what level of performance an IT shop wants based on the number of users involved and the overall configuration available. Both parties then agree on an expected performance level based on that information.
The Performance Protection Plan is available immediately.