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3/29/2002
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Business Technology: Answers Real Or Absurd

Alan Greenspan is sounding perky and feisty these days about the economy--I won't say exuberant because that would be irrational--and that's good. Housing starts are up, capital spending is up, unemployment is improving, revised gross domestic product figures show higher-than-expected growth in the fourth quarter of last year, consumer confidence jumped in March, and InformationWeek's own IT Confidence Index spiked this month as well.

But what about those 100,000 workers who got laid off by the airline industry in a single week last year? What about the 35,000 cut by Ford a few months ago? The thousands shed by Enron, Global Crossing, and other once-booming companies? Has the economy yet felt the impact of those workforce reductions, or are they more like a virus that's working its way deliberately through the system until it finds the optimal place to dig in and explode?

The CPA industry association has been running full-page ads in The Wall Street Journal of late to boost its image and restore confidence in the profession, its standards, and its credibility. Andersen's corporate travails are the very stuff the company was supposed to keep its clients from experiencing. Is that an isolated case, or should investors and employees look at all corporate accounting and financial statements with distrust and cynicism? Will one more high-profile corporate implosion more fully undermine the confidence investors have just begun to place in the stock market?

And what about hitting very close to home: what role has business technology played--or failed to play--in this ball of confusion? And what about the people behind those decisions--you, me, all of us? Have we been contributing to the uncertainty and murkiness, or have we somehow helped to keep a dangerous situation from becoming catastrophic?

In the April issue of Optimize, InformationWeek's monthly magazine that helps business-technology leaders blend business strategy with IT leadership and execution, one of our main articles states that companies in the last two years overspent on technology by (please sit down and remove sharp objects from both hands) $130 billion. Written by Charles Phillips, the managing director of enterprise and Internet software at Morgan Stanley, the article describes the current atmosphere as one in which rationalization and clear-headed thinking are paramount: "Another strong hint that it's time to consolidate, simplify, standardize, and reduce the number of moving parts in your IT operations is a huge consulting bill. If you've ever built systems you have to pay other people millions of dollars to decipher and run, you're overinvested" (see "Stemming The Software Spending Spree," April 2002, p. 56). That article is an eye-opener in these uncertain times, and makes particularly interesting reading in the context of other pieces in that issue on how to ignite and sustain constructive change in large organizations, and how to make strategic, enterprisewide use of customer knowledge.

These double-headed questions were everywhere at the recent InformationWeek Spring Conference (see "Attitude Adjustment," March 25, p. 20; and events coverage) as the several hundred attendees who came to wrestle with the topic of Collaborative Business: The Big Picture had to confront calls on the one hand for rationalization and simplification, and on the other for increasing investments in business-technology projects during a soft economy as a way to differentiate themselves and leapfrog competitors. InformationWeek's cover headline a week ago said, simply, "Optimism!" as we began to see at the conference and in our IT Confidence Index and in other metrics that perhaps things are coming around. But everyone also acknowledged that the current mood could prove to be very temporary.

So, dream big but step carefully, right? The questions won't go away; the deciding factor will be how well we've absorbed over the past couple of years the answers, the real ones along with the absurd ones.

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