Just-in-time is out; gap-year thinking is in and so is revealing
the naked truth. John Riley reports
The whole future of just-in-time systems needs rethinking to cope
with potential disruption from terrorism. That is one legacy of the
11 September outrage in the US, when several over-taut systems
failed, said Gartner Group chief executive Michael Fleischer, at
the company's European conference in Cannes last week.
"Toyota and Ford shut plants not because of a decrease in demand,
but because of reliance on just-in-time processes that ceased to
function with the global transportation stoppage," he said.
"Instead of focusing on greater efficiency and lower cost, the
opposite is now the case."
The aftermath of this tragedy is one set of challenges currently
faced by IT directors, Gartner's analysts emphasised. They also
have to adapt to at least two other major areas of change. These
are the general economic downturn and the ongoing, fundamental
churn as the e-business revolution merges into mainstream
business.
Delegates heard that the US tragedy was not the start of the IT
industry's precipitous decline. IT budgets were being reduced
across Europe before September and have not been cut significantly
since then.
In the dotcom boom capital markets did not reward research and
development, resulting in a lack of innovation from IT suppliers
today. "The IT industry was sliding before then. We all knew it,
but nobody would say it," said Fleischer.
According to Gartner vice-president Peter Sondergard, the market
will not return to normal conditions until well into 2003, and
Gartner predicts that 50% of all IT companies will crash in the
next three years.
As a result, he said, IT directors now have a "gap year" from now
until at least the end of 2002. "IT directors should take advantage
of this to do all the things they should have done to clean up
their act," he said.
Sondergard told IT directors to concentrate on five key areas:
- focus on applications and systems integration
- revise e-business strategy to support strategic business
needs
- delay new projects until existing investments pay off
- focus on quality, not speed n prepare to invest in new
initiatives from late 2002.
The gap year would also give IT directors a chance to catch up on
the issues of scalability, interoperability and security, outsource
non-essential tasks, get their act together on customer
relationship management and prepare for the "always-on"
economy.
Organisations must focus on the "edge economy", said Sondergard,
where companies look outwards to the margins. "We need to focus our
resources on our suppliers and customers and on the needs of the
marketplace," he said.
IT directors must adapt to three fundamental trends, he said,
globalisation, virtualisation and transparency. "We are entering
the striptease economy," he said, where buyers and sellers need to
see each others' systems.
Gartner, which forecasts a 14% growth in outsourcing, said IT
directors should outsource all their non-strategic tasks. "As a CEO
the only time I will trust my IT director is when he has 100%
delegated non-strategic tasks, so that he can use his brainpower
and intellect strategically," said Fleischer.
British IT directors did not buy all Gartner's ideas. Douglas Ball,
director of IT for the Newcastle-based Prescription Pricing
Authority said, "We do need time for strategic thinking, but we
also need to understand the mundane things. How do we keep our
business knowledge if we outsource everything?"
David Houston, former IT director of Nottinghamshire County
Council, said public sector IT in the UK is on the up and up.
"With the e-government objectives and the huge number of innovative
Pathfinder bids, there will be more development in local government
than ever before. I suspect the health sector will be similar," he
said.