Owens & Minor Inc. a huge health care distribution and logistics company with annual revenues of nearly $4 billion, will use “RescueWare” software from Relativity to update its aging, complex legacy systems.

“We needed a tool to help us with this effort as opposed to modernizing our systems via the ‘brute force’ method,” David Guzman, chief information officer at Owens & Minor, tells Local Tech Wire.

Rather than gut its systems and implement a complex enterprise resource planning (ERP) project, Guzman says the company opted to use Relativity’s software.

As its name implies, RescueWare seeks to understand, document and modernize old software running on legacy systems.

“RescueWare documents the legacy systems and helps us understand them,” Guzman says. “This was incredibly important to us.”

The good news jump starts a new year for Relativity, the Cary-based firm which struggled through difficult times in 2002 and lost the services of Chief Executive Officer Vivek Wadhwa for months after he suffered a heart attack.

“This is a big deal for us,” says Wadhwa. “This deal is worth a few hundred thousand dollars immediately and has lots of long-term potential. They have signed up for software so far, and we shall work with their partner Perot Systems on implementation.

“This project plays to our strengths,” he adds. “They will start off by an analysis of their existing infrastructure, and shall start modernizing parts of it over time. We have done this many times before and don’t see any particular difficulties. It is great to be working with technology leaders. These guys have a great vision and know how to succeed.”

Beyond the dollars, Relativity also will benefit from the news that Guzman and the information technology governance team at Owens & Minor selected Relativity.

“David Guzman is regarded as one of the best in the industry,” Wadhwa says.

ComputerWorld recently named Guzman as one of the 100 “Premier IT Leaders” today, and he was recently featured in a Fortune magazine story about challenges facing the software industry. He’s also been listed as one of the top paid CIOs.

Guzman and Wadhwa also are old friends. They worked together at CS First Boston in the 1980s and collaborated on a $100 million project to develop the firm’s trading system and infrastructure. “We built a system that was a decade ahead of its time,” Wadhwa says, “and that still gives First Boston a strategic edge.”

RescueWare is not ‘snake oil,’ Guzman says

Guzman acknowledges their friendship but stresses that Relativity had the solution for his problems. Relativity had worked with Owens & Minor before, and Guzman recalls talking with Wadhwa about his plans for 2003.

“We were talking about my problems and he started salivating and said the he had the answer to my prayers,” Guzman says. “I had the team look at the solution and they were incredibly skeptical at first, but eventually they were won over.

“You could hardly blame them,” he adds. “It does sound like ‘snake oil.’ When I went to our Board of Directors to get approval for modernizing our systems with Relativity as the centerpiece, I thought of how I could describe it to them.

“I called it a ‘sausage grinder.’ In one end goes the raw products [old programming languages] and out the other side comes the neatly wrapped ‘sausage’ [modern programs, such as Java and HTML.]”

Many firms need legacy updates

Owens & Minor is only one of many companies that face the challenges of updating legacy systems. Not only do they need to modernize, improve efficiency and therefore cut costs, they also must update in some cases to meet requirements of the new Sarbanes-Oxley Wall Street reform act which dictates better accounting and reporting from companies.

Dale Vecchio of Garnter Group wrote in a recent report that updating is necessary and not easy.

“As companies find business flexibility increasingly important to their success, they look to leverage their existing systems to meet this new need,” he said. “However, this is easier said than done because of the complexity of the systems and the aging technologies which can limit business adaptability. Automated solutions are an important ingredient in overcoming those challenges.”

Gartner predicted that legacy modernization programs will increase “eight-fold” in 2003, including 40 percent of “all enterprises.”

The December of CIO Insight Magazine also predicted a surge in legacy update spending this year, citing Sarbanes-Oxley. A CIO Insight survey found that 59 percent of finance departments still relied on older legacy systems. Gary Riske, a partner in KPMG Risk Management, told the magazine that legacy modernization “could be the single biggest spending item of the first quarter.”

CIO also reported that almost one third of IT spending will be directed to legacy systems .

Relativity is positioned to exploit that demand, Wadhwa says. He cites a recent Garner report that listed Relativity as a leader in legacy understanding and legacy transformation.

Guzman certainly favors Relativity, saying he will recommend the company to others.

“Absolutely. If you have to change your information systems due to business requirements, then you have three options:

“One, you can go the ERP route and pray.

“Two, you could use the brute force method

“Three, you could use a tool that will cut down the time, money, effort and increase the quality of the outcome.

“Relativity provides that tool.”

See related stories:

A Q&A with David Guzman in “The Daily Skinny”: www.localtechwire.com/article.cfm?u=3023&k=12&l=30

A sidebar explaining terms and acronyms: www.localtechwire.com/article.cfm?u=3022&k=12&l=30