What you do with your business applications is just one part of
this year's IT strategy
The technology sector may be only just starting to recover from its
slump, but user organisations have been spending at close to their
normal levels.
Nearly all of the projects that were postponed will go back on the
active list since whatever the situation in the supply-side, life
in the demand side of technology goes on.
There has, however, been one change that has permanently influenced
IT departments. They are going to have to work harder than ever
before to justify investment in technology. The confidence of the
business in IT is at an all-time low, driven down by tales of the
e-commerce goldmine and the radical impact of application software
like customer relationship management (CRM) packages.
Frustratingly, these two things remain among the most important
items on the agenda for IT managers and chief information officers.
I would also add infrastructure to the list, to complete my "three
things you should be thinking about in 2002".
Application software is clearly a great way to deliver improvements
to the business, at a fraction of the cost of custom development.
But beware the habit suppliers have of describing their
applications as "solutions". This is more than a little misleading
since solutions cannot be bought.
There are plenty of good technologies that will help you to build a
CRM system, but do not make the mistake of assuming that all you
have to do is pop the CD-Rom into one of the drives on your server.
When implemented effectively CRM can and will transform your
business. However, of all the initiatives and strategies you
pursue, CRM is the one that will require you to work most closely
with the business, and communicate most effectively with it in
order to achieve the results that are promised on the box.
CRM solutions offer you a framework. It will be up to you to
integrate that framework with your existing systems. Then you need
to fill it with the business processes that will enable you to
exploit all the information that your customer service team and
your sales staff now have at their fingertips.
Infrastructure represents a broad range of products and
technologies, from your network to your servers and the way you
glue them together. You should be looking at business-focused
improvements as boards find it increasingly difficult to approve
expenditure that is not going to see a return within a few months,
let alone two or three years.
This apparent short-termism may cost more in the long run but by
limiting your ambitions you can significantly reduce risk. In the
words of one of my clients "the decision to do things in shorter
steps is like insurance - it costs more if everything goes 100%
right, but if things go wrong you will be glad you opted to pay a
little more to minimise your exposure".
In many companies management has learnt by pain association that
big is not always better, indeed big is not always what you
originally asked for either.
The way to overcome this is to have a plan, but to present it as a
series of linked deliverables, ensuring that each phase can be
justified in its own right. Justifying each phase is a question of
establishing the business value and being clear about the costs.
If you are unsure about the costs and the business case is marginal
be clear to management about the extent of the risk, and
demonstrate the ways in which you intend to minimise it.
And finally there is e-commerce. Christmas 2001 saw e-commerce
spending up by more than a third on last year. Interestingly five
out of the top 10 sites belonged to companies that have been in
business for decades rather than the brash funded start-ups that
promised so much 18 months ago.
Of course e-commerce is about much more than Flash-enabled Web
sites targeted at consumers. Business-to-business e-commerce comes
in a number of guises - from e-business procurement to supply chain
management - all pointing to the fact that e-commerce is about
buying and selling intelligently.
E-commerce is as easy as riding a bike, and just like riding a bike
it makes sense to pick it up in stages. Be prepared to get some
help from time to time and expect to fall over once in a while.
My advice here is, once more, not to promise too much.
Business-to-consumer e-commerce requires thoughtful targeting,
changes to your business processes, and frequently a willingness to
go into partnership with third parties.
Business-to-business e-commerce has the advantage of allowing you
to work with your existing suppliers (people you already have a
relationship with) to create simple solutions that save everyone
time and cost. Once you have got things going with them you can
consider taking the stabilisers off and venturing beyond your
established partners.
So perhaps the one thing we should be thinking about is not a
technology at all. Instead maybe we should be thinking about how we
can apply our skills in those ways that directly, and demonstrably,
deliver value to the businesses we support?
Gary Barnett is a principal analyst at Ovum