Will
corporate IT spending come roaring back now that the economy is
growing again? Probably not. Technology continues to become
commoditized, and many corporate buyers have learned a critical
lesson about how to buy and use technology.
Metaphorically, they are choosing the right car for their
journey.
A Business Week article this week titled "Less Bounce in
This Tech Rebound" quotes Steven Minton, director of the
worldwide IT market research group at tech tracker IDC in
Framingham, Mass.: "We could have a very short-term return to
previous growth if the economy really booms, but after that, we
think that IT spending will settle around the 7 to 8 percent
growth range."
Minton's group predicts that world business IT spending,
including services, hardware and software, will grow 5 percent in
2004, from $874 billion to $915 billion and "unlike in past
tech binges, that rate of increase would correspond more or less
with U.S. and global economic growth," the magazine said.
The allure of investing in new technologies continues to tempt
executives, of course. For those fearful of change in their
marketplace, new technologies hold the promise of leading a
company into the future; for those enamored with being on the
leading edge, the temptation to be an early adaptor is powerful;
for those seeking to radically reengineer a company's internal
performance, technology holds the promise of speeding the pace of
change.
But corporate executives are becoming more sophisticated about
buying technology. ERP ,CRM and SCM are no longer buzzwords that
Pied Piper vendors can toss around with abandon. (For the IT
uninitiated, those acronyms usually refer to "enterprise
resource planning, "customer relationship management"
and "supply-chain management.")
Here is this most critical lesson: Technology doesn't improve
operations; it magnifies them -- good and bad. Automating
inefficient or poorly understood processes is not just ineffective
-- it can actually threaten a business.
The sophisticated executive knows that technology has the
impact of a race car: a skilled driver will go faster; a mediocre
or unprepared driver will hit the wall faster.
So imagine you've entered a 1,000-mile rally car race, with no
speed limit, driving any car you like. The race is run on rutted
dirt tracks winding through small towns, forests, and country
roads. It is the unpredictable real world, just like business.
Do you choose a Ferrari? It is the fastest at accelerating from
0 to 60, and it has the highest speed. But you don't know how to
drive a high-performance car. At home, you drive a family sedan.
So the odds you will drive the Ferrari into a ditch are pretty
high.
But let's assume you own a Ferrari, and race it on weekends at
a local track. You know how to handle it and won't crash it when
it bucks like a horse. Still, is it the right car to race in a
1,000-mile race? Probably not. At home, you treat it like your
baby, transporting it on a trailer to and from each race. The odds
of it breaking down during a 1,000-mile race are high.
Do you choose a Porsche? Car and Driver, citing their racetrack
tests, says you should. It is powerful and responsive.
If the race was on the Autobahn, you would jump at the chance.
But this a rally race, on a variety of surfaces and driving
conditions, including gravel and mud. And the Porsche is still
more car than you are used to. Are you prepared for the first time
it spins out in a tight turn?
What about the Subaru WRX? It's a frequent rally champion, the
Swiss Army knife of cars. Will you drive the WRX to victory?
Maybe. But by now you will have realized that the best use of
your time will be training to improve your driving skills and your
mental and physical endurance.
The sophisticated executive knows that, in technology
automation, as in any operational improvement project, you must
first optimize, then automate. They are comfortable with advanced
technologies and excited about their possibilities. But like a
good poker player, they will fold any hand that their analysis
doesn't support as a winner.
If a business process is poorly understood or poorly managed,
applying technology as a solution will be unhelpful at best, and
disastrous at worst. This explains why e-commerce investments have
been effective only when used to automate already smoothly
functioning organizations.
But what about corporate realities such as speed to market,
project deadlines, and the political frustrations of reengineering
long-standing workflow? Isn't there a time to simply build a
state-of-the-art solution and hang on for the ride?
No. You'll still crash the car. Driving the Ferrari won't seem
like a good idea when it's in a ditch, and you are hanging upside
down by your seat belt.
Next time you are in a planning meeting and you find yourself
seriously tempted to follow this foolhardy path, imitate Bill
Murray in "Meatballs."
Get on a chair and start chanting: "It just doesn't
matter! It just doesn't matter! It just doesn't matter!"
Because it doesn't. Turbocharging a car with unaligned tires will
make you crash faster.
Sure, you'll embarrass yourself, but you'll save your company
millions.
