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.