The future is out there

The days of the low-profile IT department are gone forever - e-business has transformed it into a profit generator and...

The days of the low-profile IT department are gone forever - e-business has transformed it into a profit generator and expectations have risen accordingly. Each year brings with it a slew of new technologies, new business models and new opportunities, and 2001 will be no different. Computer Weekly's expert team outline the issues that will be making demands upon your time over the coming 12 months. Are you ready to meet the challenges?

Desktops: Daniel Thomas

In the coming year, suppliers will continue to release faster and more technologically advanced products, but there will be a continued move away from the reliance on the PC.

Chip speeds will rise to 2GHz and above as the main chip providers Intel and AMD will continue their tit-for-tat war to be the fastest in the market. Intel currently "leads" with the 1.5GHz Pentium 4 chip, which the company claims will rise to 2GHz by the middle of this year. AMD's Athlon chip will not be far behind, and do not be surprised to see other chip manufacturers, such as Transmeta, joining the clock speed race.

However, the main concern for businesses will be chips that enable them to run the usual applications, and for the majority, 1GHz chips such as the Pentium III will be suitable for next year at least. Intel expects Pentium 4 to cover "all mainstream segments" by the end of next year with the P4 outselling the P3 by early 2002.

Continuing the pattern of last year we can expect less reliance on desktop PCs as more companies adopt legacy-free technology such as thin clients and Internet access devices. We can also expect to see dents in the monopoly of Windows as more companies turn to Linux. IBM has committed to spending £670m on Linux this year and this may well act as a green light to companies that were not sure about implementing the open source technology. However, implementations of Windows 2000 will continue to increase.

Another factor forcing companies to rely less heavily on desktops will be the slow but sure corporate uptake of wireless mobile devices as prices come down and wireless technology providers focus on functionality as well as technology. Bluetooth will be put to the test of business practice.

The major software release for desktops will be Office 10 from Microsoft. Designed to help companies use the Internet best for business advantage, Office 10 is a stepping stone to, part of the overall .net strategy.

Manufacturing: Antony Adshead

This year holds dangers and opportunities for IT in manufacturing. The danger is that some enterprises - and hence their IT departments - will not survive the already harsh economic conditions that are now being made harsher still by the e-enablement of manufacturing. The opportunity is for IT departments to be at the forefront of putting UK manufacturing on the map as a high-tech world leader.

IT in UK manufacturing emerged from Y2K spending in 2000 and begin to command outlays greater than that being spent on plant and equipment.

But fear was the most prominent motivation to invest in IT. Directors worried about being left behind and began spending on IT projects - though the bulk of these amounted to little more than establishing a Web presence.

But not in all cases. Inside the enterprise, the most forward thinking companies have been making moves to squeeze out cost all the way through the production process using manufacturing execution systems.

And on a larger canvas, the vanguard of the manufacturing sector globally has been moving towards supply chain efficiencies using IT. Last year was the year of the B2B exchange, with chemicals, aerospace, automotive and other vertical trading hubs established. Much activity was illusory, but the direction is a real one - top-tier manufacturers are beginning to force more efficient e-procurement on suppliers.

The opportunity exists to use IT to squeeze cost out of manufacturing all along the chain from customer order through production to fulfilment - but many companies do not have the knowledge or resources to adopt a winning strategy and may lose out to overseas firms that do.

IT departments need to seize the opportunity to gain greater influence in manufacturing boardrooms by convincing them that "top floor to shop floor" IT can stop the downward slide of UK manufacturing.

Retail: James Rogers

For all retailers, especially those of the online variety, the first couple of months of 2001 are a crucial time. Some will be licking their wounds after struggling to cope with the demands of the festive season, while a lucky few will be joining the likes of Tesco at the forefront of e-tailing in the UK. Sadly, some will go to the wall.

At the other end of the scale, the likes of Kingfisher are expected to continue in the same innovative vein, with the retail giant expected to add other sites to its already extensive online portfolio. "I think that 2001 will be a strong year for online retailing and it will only get stronger," says Jo Tucker, managing director of industry body Interactive Media in Retail Group (IMRG). "The message that we are getting is that there are a lot of retailers that have made a significant investment in 2000. Some will sit back and see what happens while others have realised that they really have to go for it in 2001."

The Internet, however, will only be one part of next year's equation. The last few years have seen the rise of a number of different technologies, including digital TV and Wap. Expect to see an increasing number of retailers linking more and more technologies during the coming year. From consumers right through to high street stores and dotcoms, it looks like being a busy time for all concerned.

Finance: Nick Huber

The robust growth of online financial services will continue this year as companies refine their Web-based services.

  • Banks. Online banking customers will double from around 4.5 million to nine million over the next year, according to analyst firm Gartner. Security and the scalability of online services will remain the big issues. After last year's rash of security breaches and delays to online baking services banks need to prove that their IT systems and software testing are vigorous enough to avoid Web site crashes. The online services also need to have watertight security. Meanwhile, the banks will continue to push a wide variety of other services over the Web, including Wap banking and share dealing.

  • Insurance. It is crunch time for the insurance industry with the launch of government-backed stakeholder pensions in April. The pensions are being targeted at people on lower incomes and any employer with five or more staff will be obliged to provide access to a stakeholder pension.

    With customer charges limited to a maximum of 1% of the stakeholder fund's total value, pension providers will be relying on Web-enabled pensions to squeeze a profit.

    But selling and administering stakeholder pensions over the Web will not be easy. Key IT challenges include integrating real-time Web front-end systems with ageing back-office systems and establishing a common system for transfer monthly pension contributions over the Web.

    One of the easiest ways to target stakeholder packages at large numbers of employees is through Web links from company intranet sites. This sales tactic, known as worksite marketing, is set to be big.

    Financial companies will also team up increasingly with companies from other sectors to cross-sell products and services over the Web. Legal & General, for instance, plans to target Web enabled stakeholder pension product at thousands of Powergen's small to medium-sized enterprise (SME) customers via the utility's Web site.

  • The Markets. Last year was the year of living dangerously for the London Stock Exchange (LSE). There was the failed merger proposal with the Frankfurt exchange and the successful but protracted battle to see off a hostile bid from Swedish technology supplier OM Group.

    Whatever new bids or merger plans are floated over the next 12 months the LSE is set to press ahead with some major IT projects. These include a move to an Internet Protocol-based (IP) network and an upgrade to its main electronic trading platform, Sets.

    Security: Bill Goodwin

    Looking through last year's headlines you could be forgiven for thinking that 2000 was a bad year for IT security. Powergen, Egg, Barclays, Reed Employment and Microsoft were just a few of the companies to face serious criticism for security blunders on their Web sites.

    Surely things can only get better this year, right? Wrong. All the signs are there will be a host of new glitches, blunders and hacking attacks just waiting to descend on unsuspecting companies.

    IT security is now a top priority for both IT directors and chief executives. But the commercial pressure to establish a Web site as quickly as possible last year means that there are still many flaky sites out there. Combine this with some of the first big roll-outs of PKI in 2001 and glitches look almost inevitable.

    IT directors can at least attempt to improve the security of their own Web sites, but off-the-shelf packages are a different matter. The list of vulnerabilities discovered in even the best software grows daily, providing ready-made opportunities for hackers and crackers. Experts predict that the number of breaches will grow dramatically next year.

    Although there will be more security issues to worry about, IT budgets will face further squeezes. The difficulties directors are having recruiting top-notch security staff will continue, making a growth in outsourcing IT security seem inevitable.

    If hackers do strike, then at least from April 2001 companies will be able to complain to the police's new hi-tech crime unit. New computer crime legislation will make it easier for police to investigate international incidents. Look out for a cybercrime treaty from the Council of Europe, and a communication on cybercrime from the European Union.

    Meanwhile, the publication of further codes of practice under the Regulation of Investigatory Powers Act and a new code from data protection commission on workplace surveillance will ensure that IT directors will not be short of reading material next year.

    Telecoms: Antony Adshead

    The year ahead in mobile telecoms, like the one just gone, will be characterised by modest uses of simple technologies. Fixed broadband Internet access will still not be rolled out nationally.

    It did not take long in 2000 for the Wap bubble to burst. But as the hype died down we began to see solutions coming to market that reined in the expectations of users. Instead of leading customers to believe they would be surfing the Net, companies began to offer limited-functionality Wap services with Yellow Pages-type services for consumers and remote messaging options for corporates.

    Among the success stories of 2000 was SMS. It does not look much but it does work. Recent prominent retail implementations with shoppers being pointed in the direction of bargains have shown the commercial viability of solutions that get the job done cheaply. SMS will continue in 2001 as the leader of e-commerce in the real world, particularly in conjunction with location-sensing technology.

    On the fixed telecoms front BT will allow access to some of its exchanges to competitors for ADSL equipment this year. But as with the wireless broadband auction, carriers will cherry pick the best areas so consumers and businesses in large chunks of the country will find themselves unable to use the Internet to its best advantage.

    And do not expect Oftel to help. The toothless watchdog is likely to be wound up and replaced by an overarching communications body. Unless Ofcom can map out a nationwide strategy and force action from the carriers, then UK businesses will have to face the fact that they cannot reach all of their potential customers with high-speed Internet services.

    Management: Ross Bentley

    These are the best of times and the worst of times for IT managers and directors. On the one hand, you are growing increasingly in stature. IT has never been more crucial to the business and the pressure to have an IT presence on the board has never been so strong. In short, e-business is fast becoming "the business".

    On the other hand, all this attention can be tough. The pressure to deliver innovative projects on time is immense, and senior IT people are now expected to have a finely tuned business mind as well as impressive interpersonal skills. There is also the small matter of sourcing qualified Web developers.

    On the legal front, IT directors have to walk a minefield. All of a sudden, e-mail, for example, has become one of the most regulated forms of human activity. RIPA, Human Rights, IR35 and data protection all have implications for the IT manager, and will need responses early in the new year.

    Skills: Roisin Woolnough

    Ask any IT professional what their key priorities are and they will say skills and training. Therefore, skills and training need to be top of every IT director's list as well.

    Some think that there is little point in spending money on training employees and equipping them with the latest skills when it only makes them more attractive to other employers and might land them another job. However, research shows that training is so important to ITers that they want to work for companies that take it seriously. Investing in training reflects well on employers and is likely to inspire loyalty in staff.

    Moreover, many industry pundits say that investing in skills is the only way that companies are ever going to alleviate the skills crisis. If the situation carries on as it does now - a huge shortage of professionals with the most sought-after skills and companies reluctant to train existing staff in the necessary skills in case anyone else poaches them - the skills crisis will remain. In fact, according to Microsoft research, the skills crisis is only going to get worse this year.

    It says demand is still high for certain skills such as XML or HTML, and supply low, but to exacerbate the problem there are new technologies emerging all the time. IT staff also need to understand the overall picture, how to design and implement an IT solution, business needs, commercial practices and so on. Employers need to make sure staff are thinking about technological solutions to business requirements, and not just products.

    Any technologies used for e-commerce will be in high demand. Employers need to keep one eye on the future so that they can anticipate which skills they need as soon as possible. Every company, from blue chip organisations to Internet start-ups, need to be pushing ahead in e-commerce to stay in the market, so they need the right skills on board.

    The situation today is, of course, a little different from last year. This time last year, dotcoms were still all the rage. Now that this bubble has burst, the industry has become much more serious. With that seriousness has come an increase in corporate structures at some dotcoms, such as management tiers and training procedures.

    Software: Eric Doyle

    Operating systems will be at the forefront of IT managers' minds over the coming year. Whether the aim is forging an e-business strategy, improving reliability or speeding up transaction processing, the key issue will be the selection of a suitable platform.

    Microsoft .net and Oracle 9i will feature strongly in e-business strategy. Both companies are trying to quicken uptake of their respective products and strategies but they have a lot of spade work still to do if they are going to bury fears of an expensive lock-in. Though the key phrase of the year will be business agility, users need assurances that they can leap from platform to platform if their initial choice fails to deliver the expected benefits. Possibly to this end, there was a top-level meeting between Steve Ballmer, Microsoft's president and CEO, and Larry Ellison, Oracle's chairman and CEO, towards the end of last year. If the customer's suspicion that the definition of agility is swinging from bar to bar in the jungle gym of a supplier's framework is not dispelled, sales will suffer as the larger corporates embark on extended periods of testing and comparisons.

    Another stopper, especially on the .net front, is the arrival of 64-bit Itanium processors from Intel. Supplies are currently being ramped up to meet expected demands but this may not reach capacity until Microsoft delivers its Whistler 64-bit operating system. In the transaction processing arena, the new chips promise faster, or at least cheaper, throughput but 64-bit chips have been available for several years in the Unix world and it is Windows compatibility that Intel is pinning its hopes on for reaching a wider market. The big question, apart from a delivery date, is whether Whistler will be reliable enough and what effect its introduction may have on the rest of the .net products. The result may be that some companies may decide to continue with their current strategies until Whistler has been fully tested and only then will they move towards .net.

    The rise of Linux looks like continuing but even this upstart could be stalled by the interest being shown in peer-to-peer (P2P) networks. Championed by the grey-market music distribution system Napster, P2P has proved that accessing individual desktop computers across the Internet is feasible and has rekindled the flame of distributed computing. This was the unfulfilled dream of the 1990s where the network truly becomes the computer and not only resources are shared but also processing time. This could well be the talking point of 2001 but there are many issues - such as security, bandwidth and desirability - that need to be addressed and it will probably be way beyond the end of this year before these systems are taken seriously in the business world.

    For many IT departments it looks like the early part of this year will be a time to consolidate and experiment while the market settles down.

    E-business: Mark Lewis

    This year IT directors must start to see the wood for the trees. Tomorrow is no longer deemed too late to be doing e-business, be it B2C or B2B. IT chiefs must avoid the temptation to follow the pack and only undertake the e-projects that make sense for their enterprise. This will be more important than speed of delivery.

    The issue of emerging e-business standards will be crucial this year, as organisations attempt to forge online relationships with their business partners' IT systems. Will the integrity and worth of XML be compromised by the many schemes currently springing up? The increase in information sharing with third parties will inevitably throw up concerns over the protection of intellectual property, and regulation will cast more shadows across the year in the shape of privacy and data protection legislation.

    The problem of integrating e-business systems into the back office will not go away. Nor will the dull but worthy job of storing and capitalising upon the business intelligence e-presence spawns. Where is this intelligence to be harvested? From PC users? Via digital TV or radio? Or through mobile commerce? E-business initiatives will soon need to exist on multiple channels.

    Underpinning all these concerns is that hardy IT perennial of security. How can e-business hope to flourish if means of encryption and authentication are not standardised?

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