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June 14, 1999

Emerging Enterprises Set Their Own IT Agendas

By Alan S. Horowitz

T executives at small and midsize companies share an imperative to achieve business goals with their colleagues at large companies, according to InformationWeek Research's most recent survey of 300 IT executives. Projects that create marketing advantages and improve product development score high on all companies' list of IT priorities for this year, regardless of size (see chart).

However, there are significant differences. Large companies logically place a higher priority on issues such as global architecture, supply-chain management, and outsourcing IT support. Small and midsize companies--those with less than $100 million and those with $100 million to $1 billion in revenue, respectively--are interested in ensuring that technology training is conducted companywide. "It's not a priority," says Dianne King, director of IT at Sebastian International Inc., a midsize hair-care and cosmetics distributor in Woodland Hills, Calif. "It's a given."

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The way IT priorities are set at small and midsize companies is decidedly different than at larger ones. "We're small enough that we can get away with heads-up meetings in the hallways," says Nevin Anderson, IT manager at Mity-Lite Inc., a $25 million manufacturer of lightweight institutional furniture in Orem, Utah. Many of IT's priorities at Sebastian International are determined by monthly brainstorming sessions between IT director King and her boss, the CFO. When setting priorities, says King, "we try to say how important it is--is it a `need' or `nice to have.' Usually the needs get priority."

At the need level, though, small, midsize, and large companies aren't that far apart. "Our No. 1 priority is Y2K--that's at the very top," says Charles Garner, head of IT at Lesco Restorations Inc., a $30 million facilities-maintenance company in Spartanburg, S.C.

And just like large companies, small and midsize companies are looking to exploit electronic commerce and the Web. At Mity-Lite, for instance, the Web is a high priority because it offers the opportunity to open new markets. The company focuses on larger customers, such as convention centers and schools, but E-commerce promises to expand its market to smaller customers. "The Web will make it more economical to service smaller accounts," says IT manager Anderson.

On a technology level, small and midsize companies have priorities particular to their circumstances. The top technology priority this year at the U.S. Railroad Retirement Board, an independent federal agency in Chicago with an annual budget of $100 million, is automating backup and data management along with adding storage and other infrastructure improvements. "We're looking to save money by going to a lights-out operation," says CIO Bob Rose.

Lack of space has a CD-based storage project atop the technology list at Transwestern Insurance Administrators, a 55-person insurance administrator in Fresno, Calif. "We've got two buildings filled with paper forms," says senior systems specialist Mary Ann Baker.

If nothing else, IT executives at small companies have an advantage in terms of cutting through red tape. This year's technology priority at Benefit Systems Inc.--migrating from NetWare to Windows NT--was one step removed from a no-brainer for the privately held insurance administrator in Indianapolis. "In this company, 20% of IT priorities are driven by user demand," says CIO Dan Bent. "The rest come out of my head."

Return to main story, "More Projects, Less Time."