InformationWeek

September 14, 1998

Defining IT Innovation

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Many of these organizations have launched enterprise resource planning projects. Six of 10 have standardized on a single ERP platform or supply-chain product. In companies that have rolled out ERP projects, two of three users have access to at least one portion of the enterprise system.

But what are tomorrow's priorities among the InformationWeek 500? There's still much concern about leveraging past resources. In a July 1998 follow-up survey of 250 of the InformationWeek 500, 94% of executives cited year 2000 conversion as a major priority when it comes to supporting key business processes. The InformationWeek 500 will devote an average of 10% of their 1998 IT budgets to year 2000 efforts.

Joseph Smialowski, senior VP and CIO at $41.3 billion retailer Sears, Roebuck & Co., says year 2000 work is so important that if the retailer fell behind on its conversion efforts, he would have no choice but to suspend other IT-related projects. So far, however, conversion is on track. "We expect to get the bulk of the work done this year," Smialowski says. "We don't have to divert people from other projects."

"Both year 2000 code remediation and preparing for the euro (the new European monetary unit) have been a very high priority for us for the past year," says Mary Alice Taylor, corporate executive VP for global operations and technology at $34.7 billion financial services firm Citicorp in New York. "We had to [convert] 500 million lines of code, and the large majority is back in production. We're testing internal systems, as well as external systems, with our customers. We feel pretty good about where we are," she says.

E-Business Surging While 94% of companies in the InformationWeek 500 mentioned year 2000 fixes as a key support function, nearly as many-92%-of IT managers mentioned E-commerce. Despite its hefty year 2000 efforts, Citicorp is still pushing forward with online ventures, including a joint effort with Netscape to provide a personal finance "channel" on Netscape's Netcenter Web site, due to be launched this fall.

Third on the list of key support functions in the survey is customer service. Many of the executives surveyed also chose establishing global architecture and standards, streamlining business processes, creating marketing advantages, and organizing and utilizing customer data to create new and better ways of serving customers.

Sears touches many of these areas with its non-year 2000 work. According to Smialowski, efforts include a statistical modeling environment that uses a 14-terabyte data warehouse to forecast sales and determine merchandise placement in stores; geographic mapping, computerized routing, and interactive voice-response technologies to schedule merchandise delivery to customers' homes; and kiosks that use radio frequency and scanning devices to speed merchandise pickup in stores.

The focus on the customer is touching all industries. "Customer service and reliability are a big concern for us as we move into a deregulated environment and we no longer have captive customers," says Paul Anders, VP and CIO at Northern States Power Co., a $2.7 billion utility in Minneapolis.

In its effort to keep customers from defecting to other energy sources, Northern States has begun to install automated meter-reading systems for gas and electric service. The result: more-accurate records of customers' utility usage-especially during heavy snowstorms, when Northern States' meter readers can't travel. In addition, Anders says, "information we gather from automated meter reading will allow us to do proactive work, such as analyzing energy use and improving efficiency for customers."

Also high on Northern States' development list is converting the paper maps used by service personnel into geographic information systems, to speed response to power outages.

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