Time to deliver business value

What you do with your business applications is just one part of this year's IT strategy

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

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