Fat rollout expenses slimmed by thin clients

- by John Linehan -

Having recently joined a new Tokyo-based joint venture (JV), Anne was charged with overseeing the Asia Pacific rollout of the company's ERP solution. After choosing a tried-and-trusted client-server-style configuration, and installing severs, she was planning to install the interface on client PCs in six different countries. In late November, with only a month remaining, all milestones had been met and the project was going smoothly - smoothly, that is, until Anne received a call one Tuesday morning. It was the legal department telling her that the product pricing information of one of the JV's parent companies - fully accessible under the system that Anne was building - would have to be hidden because of a government-imposed regulatory requirement. She was told to go ahead with the installation and perform an update in mid-December. Because this would require a second trip to each site, Anne asked one of the internal company project sponsors for an additional ´20 million. In early January, Anne got a call from the Asia Pacific Director of Sales saying that - due to a new customer-oriented approach mandated by management - each site needed access to all customer information. By late January, the project was nearly \50 million over budget and Anne - formerly an up-and-coming future CTO - found herself suddenly reassigned. Her new desk didn't even have a phone. Thin is in How could something like this happen? In fact, this type of problem is very common in industries where business requirements are constantly changing - and whose aren't? - but some IT managers here have been able to avoid Anne's fate when involved with similar multi-country rollouts. Their secret? Hard work, just a dash of luck, and the decision to deploy thin client technology. What is a thin client? Thin client technology is a computing model that provides for PCs and other devices to connect to a server using a highly efficient network connection. Through this connection, users can perform operations using software that is stored on the server, eliminating the need for IT staff to physically visit each machine for installation and updates. And it doesn't matter whether the server is located across the room or across the ocean. Further, because older PCs and devices can be employed as clients, companies can enjoy even larger savings by utilizing existing IT assets and avoiding costly visits to multiple sites. Through a thorough consideration of IT- and non-IT-requirements - and by using thin client technology - managers can obtain savings that will easily outweigh incremental costs, with the added bonus that thin client technology can provide competitive strategic advantages. Much of the thin client discussion to date has focussed on using it for small, "light" applications distributed from a remote server, running locally with automated version control. Industry pundits touted the new technology as the eliminator of bulky word processors, spreadsheets, presentation software, and their associated files, relieving users from the routine system hangs and downtime experienced today. At first, thin client computing sounded like an IT manager's dream. Although early results from case studies - involving order-entry systems - were successful, where the companies involved used thin client solutions to run small programs to transmit information using custom-developed or packaged client-sever applications, the model didn't satisfy all potential users. The problem? Great platform, but very little software was available to leverage the model. Consequently, widespread use of thin client solutions did not start to catch on in Japan until September 1998, when Citrix and Microsoft released localized Japanese versions of their thin client products for the first time, creating new ways to use thin client technology. What are the actual benefits of using thin client technology? How can you apply thin client solutions to your organization? Let's look at two companies who recently experienced success with thin clients. Case 1: Major chemical company A large chemical company recently formed a new division that was to operate globally. The new division needed to be operational in a matter of months and wanted to minimize the risk associated with staffing and overseeing operations related to accounting and IT. My firm - Ernst & Young (E&Y) - was asked to implement and operate the ERP application and supply the accounting personnel worldwide. This was a situation tailor-made for thin client deployment. The chemical company's central Asia-Pacific site was hosted in Singapore, one of four locations worldwide. The Asia-Pacific location supported company sites in five other Asian countries, including Japan. Because of the time constraints associated with the project, the ERP package selected for implementation was Scala (to be replaced by SAP in several years). The configuration also included Btrieve for the Scala database, and custom-developed reports written with Crystal Reports and MS Access. The non-Japan-based users will run Citrix WinFrame to access the English-language application server in Singapore. A separate pair of Japanese-language data and application servers was installed in Singapore for Japanese users. There are three 128Kbps WAN connections to the Japanese-language server in the Singapore data center. There are currently four users in the outsourcing center and seven to eight users in each of the two Japan locations. Some Japanese users access the English-language WinFrame servers, whereas two out of the four users in the outsourcing facility use the English-language ICA client to access the Japanese-language MetaFrame server. What about performance? The performance for the WAN users was more than acceptable. I performed tests using a low-speed modem with an older 486-class machine. Initially, users experienced some confusion with remote drive mapping, but this was solved with modifications to the server. Remote printing created problems also, but these were overcome with simple workarounds. Although some scalability issues remain, patches will most likely be available by the time you read this. The benefit for the new organization was a consolidation of their applications in a single data center for the region. The client side of the applications can be updated without making changes at the client locations. The E&Y outsourcing facility in Singapore - staffed by accounting and IT professionals with language skills adequate to support the entire region - provides a single point of contact and focus of accountability. The thin client solution also allowed for the rapid deployment of branch locations across Asia. Case 2: International semiconductor manufacturer A large semiconductor manufacturer had implemented Oracle applications at its US headquarters. Since the manufacturer had already developed the skills necessary to operate and support Oracle, it wanted to leverage this knowledge for the development and support of similar Oracle software to be used in its Japanese subsidiary, without having to develop an entirely new local capability. The English-language version of Oracle was used, and the parent US company's configuration was modified for the Japanese subsidiary. When the Japanese subsidiary came online, it simply accessed servers located in the US using WinFrame through a WAN connection. As a result, an expensive enterprise-critical application package was seamlessly integrated into the local country environment - without requiring local Japanese expertise to maintain the servers. For its Oracle application support, the company implemented what I call a "shared service center." A shared service center is any center where support functions - IT-related or other - are combined for multiple offices or multiple country locations which would normally maintain redundant individual capabilities. Having another company manage such as service is referred to as outsourcing. Similar to the first case study, better utilization of resources through consolidation, a single point of accountability, and a faster rollout were achieved. Again, the competitive and cost-saving advantages of the thin client solution were obvious to those involved with this project. Still waiting for widespread usage Although it has been proven to generate substantial savings - especially when deployed via low-end PCs, Java Stations, or other devices - enterprises are not embracing thin client technology for this reason alone. I am seeing organizations put more emphasis on being able to structure the support and deployment of applications in easy-to-manage ways, taking advantage of outsourcing and building shared service centers when appropriate. I am also seeing a strong reluctance to go "totally Java" in the enterprise. One possible reason for this hesitation is that, although Java is an open standard and offers a great deal of flexibility in regard to platform support, a substantial percentage of packaged applications is now available only in Windows versions. (Or else, the most tried and trusted client version for a particular package is the Windows version.) Reduced deployment costs Nonetheless, IT and other managers need to keep the thin client solution in mind when considering client application delivery options for ERP or for any project that implies substantial delivery costs and need for local country expertise. Further, corporations wanting to move to Java computing in the future will have several choices if the thin-client route is selected. For example, using a Java Station combined with an ICA client for Java would give users the best application availability for today and a solid base for tomorrow. Recently, low-cost ICA clients have appeared in the US costing around $200. ICA clients are not Java, but they are lightweight, have no moving parts, and have fast boot times. However, the low cost of device hardware is not the primary driver for adopting the thin client model. Rather, it is the greatly reduced deployment costs now and in the future as businesses grow and evolve. For companies considering implementing a thin client solution, it is important not to isolate the technology issues from people and process issues. It is important to fully evaluate where the most substantial benefits can be derived. Through careful analysis, strategic competitive advantages can also be achieved. So spare a thought for Anne, the ex-IT project manager. With luck, she'll be back. With plenty of time on her hands and no bothersome telephone, she's had a great chance to read up on thin client technology. Next time, she'll be much better prepared. John Linehan has nearly 8 years of software development and consulting experience and works in the Management Consulting Practice of Ernst & Young Consulting Japan. Contact him at 03-3279-9263 or john.linehan@eycj.co.jp. Back to the table of contents