InformationWeek
Defining The Business Value Of Technology
June 14, 1999
 Print this story |
More Projects, Less Time
continued...page 3 of 3
Champion's latest initiative is spending $3 million to $4 million--at least 10% of its $30 million annual IT budget--over the next two years to implement J.D. Edwards & Co.'s manufacturing and enterprise re-source planning systems for its ordering, planning and scheduling, and shipping processes. Ricks says the company's product-tracking systems in the mills have to be running at all times. "We have orders from customers, and in order to keep our customers happy, we need to produce and ship orders on time," he says.
Electronic-commerce efforts, up sharply in the last year, are expected to become more pervasive as Internet competition spreads across industries. Spending on E-commerce applications will increase at 59% of the sites surveyed. Accordingly, four of five survey respondents say their companies' Web sites are among their organization's most important post-Y2K technology priorities.
The E-commerce push resonates with consultants like Bain's Tobkin. "More than half of our clients have E-commerce and E-business initiatives under way," he says. "An increasing number are selling and taking orders over the Internet."
Burger King launched a redesigned consumer-focused Web site in December that, in addition to publishing restaurant locations and community activity updates, now contains nutrition information on every Burger King food item--right down to the last ingredient. Burger King hired Internet Communications Network Corp., a creative and technical consulting company, to revamp its Web site to serve a wide range of interests such as common consumer questions and investment inquiries. Among the new sections on the site is the Nutritional Information Wizard, a chart that breaks down nutritional value by serving size, calories, grams of fat, sodium, carbohydrates, and protein. The Wizard also lists all the ingredients of menu items.The fast-food chain is continuing to explore ways to advance its Web site and is hiring staff with Internet expertise. Will it improve the bottom line? "There are arguments against it that say you can't sell hamburgers over the Web; however, I know you probably can," says Burger King's Cope.
PG&E has been aggressively pursuing its E-commerce and Web strategies, and plans to continue that through 1999 and beyond, Keast says. The company's major business customers can look at how much energy their facilities are utilizing and can even get notices if a plant or store exceeds its energy usage profiles. Going forward, PG&E wants to add advanced online billing capabilities.
"We want our [business] customers to be able to configure bills online, not just so they can see that they've spent $10,000 on electricity this month, but also so they can see comparisons with prior years, or even see what the average temperature was for that area during that billing cycle," Keast says. "Customers want a lot more than the ability to buy electricity and gas. They want a complete one-stop shop for energy and products and services around that energy."
The Coming Millennium
Priority-setting will undoubtedly be much different a year from now, when IT executives have recovered from Y2K work and IT budgets are restored to their pro-development bias. But this year, 83% of the survey respondents conceded that Y2K projects remain key implementation priorities. Looking at the typical IT budget pie, Y2K isn't exactly a minor line-item. The IT organizations surveyed plan to spend, on average, 11% of this year's IT budgets on year 2000 date-conversion efforts, behind only IT worker salaries and benefits, at 24%, and product and technology purchases, at 14%.
"I consider this an abnormal year, and the thing that's abnormal is the Y2K work," says Visa's Downing. While Downing says Visa's systems are up-to-date, the process is affecting new deployments. "One of the things Visa and other companies are doing is going into a freeze period for Y2K," he adds. "We'll have lots of development projects, but we aren't going to implement any new applications until after February 2000."
That freeze, which goes into effect this month, is compressing IT implementation schedules. "We normally have a freeze period for our peak season, which is Thanksgiving to New Year's, so typically we have to have projects completed by October," says Downing. Now, IT is working even more quickly to meet the new deadline.
Y2K is also causing Visa to scrutinize every project. The acid test? "Does the business reason outweigh the risk of changing what we consider to be a tested Y2K environment?" Downing says.
All the priority setting, juggling, squeezing, rearranging, and fast-paced moving is enough to unhinge any mortal IT manager. What keeps PG&E's Keast up at night isn't just the setting of priorities, it's selling them to management once they're determined and then mobilizing forces for the implementation. These efforts require classic leadership plus a whole set of nontraditional IT skills: diplomacy, politicking, and motivating workers. And Keast uses these skills in a variety of communication venues: formal presentations, informal discussions, in E-mail, over dinner, and on the telephone. His efforts have earned him the nickname The Great Persuader.
Not every IT manager can muster those rhetorical skills. But IT's current close relationship with business management may mitigate that. And with compelling priorities such as E-commerce and customer satisfaction, IT shouldn't have to do that much persuading.
return to page 1, 2
Back to This Week's Issue
Send Us Your Feedback
Top of the Page
Featured Microsite
