Increasingly more and more organizations
are attempting to make information more accessible and shareable among employees.
According to Bill Gates, “(SharePoint) is based on a vision of letting workers
share information in a better way.”
The
latest version is SharePoint 2010 (SP 2010), while earlier versions introduced
by Microsoft included SP 2001, SP 2003, and SP 2007. SP 2010 offers a number of
new features and functionality over previous editions. According to Microsoft’s
Steve Ballmer, “SharePoint 2010 is the biggest and most important release of
SharePoint to date. When paired with Microsoft Office 2010, Share- Point 2010
will transform efficiency by connecting workers across a single collaboration
platform for business.” Although Microsoft Office sales have been declining, SharePoint
sales have been increasing. More specifically, Microsoft reported that
SharePoint sales have seen 20 percent growth and revenues topping $1.3 billion.
In addition, Microsoft claims that in 2007 it has shipped over 85 million seat
licenses to approximately 17,000 customers since SP 2001. As Alan Pelz-Sharpe
points out, “If there was ever any lingering doubt that SharePoint was having
an impact on the market, these numbers put that argument to rest.”
The
popularity of SharePoint is that it makes it easier for people to work
together. SP 2010, for example, allows individuals to set up their own Web
sites to share information, manage documents, and publish reports. According to
Microsoft’s Web site, SP 2010 provides the following capabilities:
■ Sites—allows for a single
infrastructure to support all of an organization’s Web sites. People can share
documents, manage projects, and publish information.
■ Communities—provides enterprise
collaboration tools found on the most popular social networking sites. Users
can locate key contacts and information, join groups, and create wikis.
■ Composites—supports the use of
tools and components that allow individuals to build business applications
without having to write code.
■ Content—supports content
management with features like document types, retention policies, and automatic
content sorting that works seamlessly with Microsoft Office.
■ Search—allows users to search
for information and documents based on a combination of relevance, refinement,
and social cues.
■ Insights—gives people access to
information stored in the organization’s databases, reports, and business
applications.
Large
companies like Sony Electronics (a division of Sony Corporation) have upgraded
from SP 2007 to SP 2010 to take advantage of its improved search, social
networking, and document sharing features. According to Jim Whitmoyer, business
applications manager at Sony Electronics, the improved search capabilities of
SP 2010 has been welcomed by many of Sony Electronics’ 180,000 employees across
the globe. The updated search filters now provide results by document type,
author, or within a specific time period that can narrow down thousands of
documents down to a relevant dozen. In addition, the new search features now provides
results for search terms such as a company expert’s profile.
With
the hiring of younger workers and the popularity of social media sites, Sony
wanted to encourage the use of My Sites to allow for a more progressive work style.
As Whitmoyer points out, “All our worldwide users are dealing with the conflict
of distance. But SharePoint 2010 provides better social connections and richer
profiles through My Sites. So if someone is searching for a subject they can
get help from colleagues quickly.” Moreover, Whitmoyer says, “SharePoint 2010
represents an opportunity to remake the Sony landscape, where employees will chat
and post on discussion boards instead of e-mailing, and use wikis instead of
tracking revisions made to various Microsoft Word docs sent as e-mail
attachments. We’ve been preaching about sending links to each other instead of
attachments.” The use of SharePoint has allowed Sony to communicate more
effectively and efficiently by curbing the reliance on sending emails back and
forth.
On
the other hand, small and midsize size businesses have been adopting SharePoint
technology. For example, the Greater St. Louis Area Council of the Boy Scouts
of America serves close to 60,000 kids and 15,000 adult volunteers with only 80
staff and an IT department of one. Their SP 2010 Web site allows scout leaders
in 15 different regions to coordinate activities and update their own blogs. Although
the Council considered several other solutions, including open source tools,
Joe Mueller, director of public relations, said, “We realize that in the blink
of an eye we could set up 15 WordPress blogs for our districts, but when you
look at everything from an information management standpoint, SharePoint just
made sense.”
The
SP 2010 Web site enabled a culture shift toward collaborative content
development. As Mueller points out, “That’s a huge change in our culture here.
We have been a top-down organization from a communication standpoint, and now
we’re opening the gates.” However, this would only be possible because of SP
2010’s administrative controls that allow only authorized people to have access
to troop activities and scouts’ personal information, as well as controls that
ensure that blog posts meet certain organizational standards.
However,
SP 2010 will allow the Council to have broader capabilities, which will come in
the next phase of the project. Aside from enterprise content management, Mueller
contends “The other part of the project is to do online reservations, and
having SharePoint as our platform will facilitate that. When a scout is in a
church basement with his troop leaders planning a campout, and they want to use
our equipment to go rock climbing, they can use their mobile phones to log onto
our Web site to make a reservation, possibly pay with a credit card, and boom,
they’re done.”
According
to Toby Bell, a vice president of research at Gartner Inc., SharePoint has been
“nothing short of a phenomenon.” Unfortunately, while there has been a high interest
in the product, there has been confusion about its value. As Bell points out,
“For Microsoft and its partner ecosystem, it’s easy to see SharePoint becoming
the billion dollar baby in ECM [enterprise content management], but estimating
the potential ROI for SharePoint and related products for enterprise buyers is
harder.”
Russ
Edelman of Corridor Consulting believes that the true costs of deploying and
supporting SharePoint are not well understood. Moreover, he contends that many executives
believe that SharePoint is a “shrink-wrapped” product that can be easily
installed and configured within days. Edelman believes that it cannot, and
provides a breakdown of the true costs that need to be considered when
deploying SharePoint or with rolling out any new software solution:
Expected
Costs:
■ Product Licenses Microsoft,
for example, offers different licensing options for SharePoint, and these
options can vary considerably. Even though some versions are free, the version
selected should depend on the functionality required and the number of
instances the server software will need to run and the number of users.
■ Microsoft SQL Server Licenses The cost of SharePoint does not include the cost of Microsoft
SQL Server a database management system (DBMS) that is required to store the
SharePoint content and metadata. In some instances, organizations may be
already running SQL Server, but an additional SQL server database may be needed,
depending upon scalability, redundancy, and performance. Pricing will depend
upon the configuration and type of licensing agreement.
■ Windows Server Software SharePoint
also requires Windows Server 2003 or Windows Server 2008, and can be on
physical or virtual machines. Again, pricing will depend upon the configuration
and type of licensing agreement.
■ Virus Protection and Backup An organization’s information must be secure. Virus and backup
protection can be purchased from Microsoft or another third party, but the
price of these products can vary and can be user or server-based or both.
Hardware
and Infrastructure This includes the actual computers need to support a
SharePoint environment. Certain computers may be servers for SharePoint or SQL
Server databases, as well as the necessary network hardware and workstations.
■ IT Staff In general,
IT staff will be required to support the SharePoint environment. If the
SharePoint users build their own basic applications, then the cost of support will
be lower. However, if the organization plans to build more sophisticated
business applications, then the cost will increase significantly because more
staff, like developers and quality assurance testers, will be required.
Depending on the size and complexity of the projects, project managers,
business analysts, and help desk staff may be needed as well.
■ Third Party Products SharePoint
is not perfect and may not solve every problem directly. Therefore, third-party
vendors may provide specific products to fill such gaps. This may include tools
for image capture or workflow enhancements, and the price of such products varies
widely.
■ Consulting Costs Organizations
that wish to implement SharePoint may not have all of the requisite skills or
knowledge, and, as a result, may need to hire consultants to configure
SharePoint or to integrate third-party products.
■ Quality Assurance Testing
must go beyond out-of-the-box functionality and include testing of any custom
development, the integration of third-party products. As a general rule,
organizations should allocate five to 10 percent of their SharePoint project’s budget
to quality assurance.
In
addition, Edelman outlines a number of unexpected costs in order to gain a true
cost of ownership picture:
Unexpected
Costs:
■ Governance Although one of SharePoint’s strengths is its simplicity and
ease of use, a drawback is that it can be used inconsistently. Therefore,
design and governance standards and policies need to be developed and implemented
throughout the organization.
■ Change Management Users will
have to change the way they manage and share information once Share- Point is
deployed. People often resist change, so a change management plan is highly
recommended. This could be as simple as a formal communication such as an email
or newsletter or a highly visible campaign to promote the proper use of
SharePoint.
■ Training All users
will require at least some training, and can be performed by internal staff or
outside consultants.
■ Community Participation The
SharePoint community of users has been described as collegial and growing. For
example, a number of SharePoint conferences are being hosted around the world,
so user travel may have to be factored into the true cost of SharePoint.
Although
there a number of costs associated with a Share- Point (or any other IT solution)
project, it is important to develop a business case to determine if the
benefits really outweigh the costs. Russ Edelman also provides a framework for
understanding the specific challenges of building a business case for
SharePoint. He believes that although SharePoint deployments can lead to
process improvements, it’s not always easy to quantify the value of those
improvements. Edelman suggests that the benefits for any software solution
should include three core areas: The hard savings, the soft savings, and risk
mitigation.
Hard
Savings A well-framed model of the true costs of a SharePoint project
is the first step of developing a good business case. Without it, a business
case will fail to pass the “sniff test” by most financial analysts. The first step
for any business case is the cost savings that will result. For example, an
organization may deploy Share- Point for imaging-based solutions. Here, the
hard savings would focus on how the organization would save money by eliminating
or reducing physical storage and retrieval cost or shipping costs if documents
no longer have to be mailed or shipped to other locations. In addition,
SharePoint may allow an organization to eliminate other systems the
organization may be using. This would result in a hard savings on support,
maintenance, or software licenses.
Soft
Savings A business case should also include the soft savings—that is,
the less tangible benefits that the software solution provides. This may
include efficiency improvements, such as the amount of time a person or group
will save as a result of using SharePoint or any other system to replace a
manual business process or retrieve stored documents. These efficiency claims
can be backed up by using time and motion studies that track how long it takes
a person to perform a specific task before and after the software is
implemented. This may include, for example, the closure of a case from five
days to one day.
Risk
Mitigation The third element should include a description of how using
the product will mitigate certain risks. For example, SharePoint can provide a
redundant repository for storing electronic copies of original documents. If
disaster recovery and business continuity are important concerns for an
organization, then a portion of the system’s costs could be amortized over the
time a catastrophe may be likely. Moreover, since SharePoint is used many
organizations world-wide, deploying Share- Point can reduce the IT staffing
risk since a pool of talented people who can support it exists.
The
main point your business case wants to make is that the organization will be
doing more for less. In addition, the key capabilities and the benefits those
capabilities will provide are important to justify the costs of the investment.
For example, global non-profit Conservation International was able to show how
SharePoint’s functionality reduced the time and cost of implementing a Web
site. As Alexandre Dinnouti, director of Web applications, states, “Ultimately,
we realized that we would never finish the project. We redirected the resources
to utilize SharePoint, and we had the first version of the system ready in just
under six months.”
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