InformationWeek
Defining The Business Value Of Technology
August 23, 1999
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For many companies, the growth in Internet technologies and changing business models necessitate a new attitude about leading-edge technologies. David Butler, CIO of Whirlpool Corp., says there are three reasons his company has become more technology aggressive: "The first, second, and third on my list would be Internet, Internet, and Internet.''
Whirlpool, in Benton Harbor, Mich., plans to implement SAP's Web-ready Business-to-Business Procurement supply-chain software later this year. The software will let the $9 billion home-appliance manufacturer communicate with its suppliers over the Internet. Next on Whirlpool's list is knowledge management, with which the company aims to capture both the data that exists within its enterprise systems and the knowledge that exists within the minds of employees. "We're in the early stages of picking the right spots where we want to apply knowledge management," Butler says.
Limited Risk
Whirlpool's attitude reflects that of the average adopters in the InformationWeek study. Butler says Whirlpool limits its risk to projects that are somewhat isolated to one part of the business, in an effort to make any potential deployment problem easier to manage.
Marriott International Inc. also practices caution. Barry Shuler, senior VP of strategy and planning at Marriott's information resources department, says Marriott can't afford to take risks with what he calls "frontier technologies" that are in the early adoption stages. Why? Because technology has become such an integral part of Marriott's business, it's critical that any new technologies are first stable and proven. "If anything, we're more pragmatic than we were three years ago," Shuler says. "We realize as a company that we're more dependent on technology. We're not looking to implement bleeding-edge technology."
Another reason companies are adopting leading-edge technologies sooner, according to the survey, is the rapid pace of technology itself. Nearly half of all leaders and laggards cited rapid technology changes as a reason why their organizations had become more technology-aggressive. "The whole world of buying and selling is rapidly changing, and it's all being triggered by the technology," says Bill Rosser, an analyst at Gartner Group. "Companies are feeling pressured to adopt technology faster than in the past. And it's accelerating."
Ken Lacy, CIO at United Parcel Service of America Inc. in Atlanta, agrees. "A lot of CIOs do feel that if they don't spend the money on leading-edge technology, they're going to be left behind," he says. "We're pretty aggressive. We've spent a lot of money just because we need to stay in the game."
That kind of measurable success increased senior management's confidence in technology and let IT managers pursue other projects. In April, Colgate-Palmolive became the first company to implement SAP's Advanced Planning and Optimizer supply-chain management application.
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However, while companies such as Whirlpool are more aggressive about leading-edge technologies, most are cautious about the amount of risk they'll take. For both laggards and leaders, risk was one of the top three reasons for avoiding leading-edge technologies, the study found. "We're not using leading-edge technologies to make the big bets," Butler says. "It's lots of small bets being made."
Thinking Ahead
Marriott recently determined that object technology is stable enough for the development of long-term projects. The Bethesda, Md., hotel company is moving ahead with a three- to five-year plan to integrate its key enterprise applications, such as its property-management systems and central reservations systems, using object-oriented tools from Forté Software Inc. The goal is to ensure that all its custom-developed, legacy, and packaged applications can leverage objects. That way, Marriott's apps can more easily share data, scale to thousands of users, and be moved into Web environments more easily. By gaining control of--and access to--its data, Marriott is in a better position to make decisions that will lead to greater profitability and more efficient operations, while exceeding customers' expectations, Shuler says.
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