InformationWeek
Defining The Business Value Of Technology
January 3, 2000
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Along with a focus on boosting Web-server performance comes added concerns about network security, which ranked No. 3 among technology priorities. Solectron's Mathaisel says he expects there will be a lot of progress in network and Web-security products during the next year, including products that protect against network hackers and Internet pranksters.
On the matter of consumer privacy, businesses seem content to let companies monitor their own behavior--only a minority of IT managers surveyed say the government needs to step in to establish policies that protect individuals' privacy on the Internet. In all, 71% of IT managers surveyed say privacy protection can be accomplished without government intervention. However, the numbers vary significantly depending on who's asked. While only 24% of small companies say the government will have to get involved, that figure jumps to 34% of large companies. Among services companies, 35% say the government needs to intervene.
Health care is one area where industry-specific government security and privacy regulations are on the minds of IT managers and CIOs. The federal government's Healthcare Information Portability and Accountability Act, which sets rules about the level of security required to protect patient confidentiality in medical records over the Internet, will be carefully watched by health-care companies. It includes protection from unauthorized access to patient records; however, details about who is considered authorized are still being worked out.
Other proposed regulations involve restrictions on the use of Social Security numbers to identify patients' medical records via the Internet and instead using ID numbers with nine to 36 digits. If that system were implemented, it could produce "a nightmare worse than Y2K," says one health-care IT executive. "This would blow up every one of our systems."
For some IT executives, the Internet is also creating a demand for wireless products that let mobile users access the Web. And Solectron's Mathaisel says personal digital assistants will begin encroaching on the popularity of notebooks, particularly among executives who use their portable systems mainly to check E-mail.
Prudential's Friel says wireless technologies will be important this year as his company offers new services. Since November, Prudential has been providing wireless access to insurance, investments, real estate, and retirement planning information on the Web for users with Palm VII organizers from Palm Computing Inc. This year, "Wireless will continue to allow us to reach out toward the customer," Friel says.
Dave Bent, CIO at Visteon Automotive Systems and InformationWeek's 1999 Chief of the Year, also says wireless technology will be key in the near future. "Wireless communications will change the world again," he says, letting the Internet connect with small devices. Visteon, in Dearborn, Mich., is working with SAP, its enterprise resource planning vendor, so plant managers with handheld devices can be paged and communicated with.
"What I envision is connecting people to information more effectively by having applications broadcast information to personal digital assistants using wireless technology," Bent says. "This could be general information or alerts about business processes that require intervention or attention. I see this as taking hold in 2001-2002, rather than this year."
Aberdeen Group's Willmott says wireless technologies such as PDAs and cell phones will continue to grow in popularity in the United States--though their use in the United States still trails Europe and Asia, where wired infrastructures don't exist or aren't well developed.
Another widely discussed technology, voice over IP, is getting mixed reviews from managers. Converged voice and data networks and voice over IP are at the bottom of the priority list, according the InformationWeek Research survey. Still, at UnitedHealth, voice over IP will be used this year for internal voice and fax traffic and external voice connections that let customer-service representatives answer questions via voice over the company's Web sites.
Other key technologies taking the spotlight this year at UnitedHealth are data warehousing in a massively parallel environment and a workflow productivity application. Like Solectron, UnitedHealth is converting its application-development environment so applications are built with more reusable code and components. "This is more than using objects," CIO LeFort says. The "emphasis will be to reduce our unique code by at least one-third over the next several years." That will be accomplished by using a combination of internally developed software and third-party products.
As for services, only 24% of IT executives surveyed rent or lease applications from application service providers, though many analysts see this as a huge growth area this year. Large businesses rent or lease far more apps than midsize or small companies.
Solectron's Mathaisel says the use of ASPs will grow as businesses turn to other companies to run their ERP and other enterprise applications while stretched in-house IT organizations focus on core competencies.
"As a CIO, I'd prefer to have a reliable application infrastructure that someone else provides and maintains," Mathaisel says. "It's like telephone systems. We don't want to be our own phone company." Turnkey solutions and services supporting Oracle, Baan, SAP, and other ERP packages will become more popular this year, he predicts.
While Firstlook.com's Dinsdale says ASPs are building momentum and becoming a "growing paradigm," there is a caveat. "You don't want to outsource something you don't know how to manage yourself," Dinsdale says. "That's like handing over a problem, which can just lead to more problems."
It's only logical that with all this work ahead of them, companies will seek whatever outside assistance they can find to get their E-businesses up and running.
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Illustration by Dave Plunkett
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