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Smart IT investments will eventually pay off for the entire company |
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By Philip Brittan
06 Nov 2003 | SearchCIO.com
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Industry gurus who claim that technology no longer matters to corporate America may be drawing the wrong conclusion from the wrong evidence.
They cite a slowdown in corporate spending during the past few years as proof of IT's declining importance. They fail, however, to take into account that the continuing rapid pace of innovation is creating some of the most profound changes in our computing model in 20 years. Far from declining in importance, technology matters more than ever.
A recent study by MIT establishes a strong link between IT investment and productivity gains. The study found that these gains come five to seven years after the actual IT investment. As a result, corporate investments made back in the 90s are still contributing to productivity growth today. Few other investments can make a similar claim. Technology matters to corporate America's bottom line because today's investments fuel tomorrow's growth.
Companies can ensure that their IT investments continue to contribute to productivity gains by implementing three important strategies:
Embrace open standards. The open standards movement is gaining acceptance because companies are value-conscious. They want to simplify IT, control costs and ease system integration. A recent study by Juniper Research found that one in five small and midsized businesses uses the free, open-standards Linux operating system. Open systems help customers connect and combine the IT systems they already own, avoiding the high costs of ripping and replacing when changes are needed. Integrated systems also support the entire business, not just individual silos or a single business process. Not long ago, integration was considered principally a benefit for large companies with multiple divisions and a global reach. Now the Web brings the benefits of integration to smaller companies, helping them more easily manage their supply chain of vendors and partners.
Without open standards, best-of-breed IT integration just can't occur. Open architectures allow customers to deploy applications -- such as payroll or supply chain management -- that are able to run on any platform, over the Internet, and work easily with other software regardless of vendor.
Recognize that the network, not the desktop, is now the backbone of corporate computing. Adopting applications that deliver services over the Web can create a sea change in how companies operate and can drive the attributes of the Internet -- speed, responsiveness, flexibility and collaboration -- into your business model. The concept of "on demand" business has the potential to become the standard companies use to differentiate themselves from competitors.
Be certain the technology you adopt is easy to use. More often, software products fail because they are too difficult to use, not because they lack this feature or that function. Workers simply won't use software that is difficult to learn or doesn't operate easily with the other software they use every day. If software products don't win over the workers, they remain underutilized and evade an ROI. In contrast, when a product is simple to use and thus encourages user productivity, businesses get a faster ROI.
Using these strategies, companies implement technology that matters -- technology that helps them fuel tomorrow's growth and remain effective, profitable enterprises well into the future.
Philip Brittan has been writing software and running software companies for more than 15 years. He grew up on a ranch in Montana and has a degree in computer science from Harvard University. He is currently chairman of Droplets Inc., which he founded. Previously, he founded and ran software development firm Spheresoft Inc., and before that he was lead developer and CEO of financial software firm Astrogamma.
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