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8/23/2002
08:17 AM
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Focus On The Process

In today's tight economy, IT managers and vendors have to deliver better business processes, not just better technology

OK, so the enlightened business-technology executive is always going to examine possible business-process changes first, then pick the technology, right? Not necessarily, thanks in part to two events of the past half-decade: the year 2000 remediation problem and the Internet boom. Y2K problems spurred many companies to buy or expand ERP systems, even if they hadn't yet redefined the way they conducted business. With the dot-com excitement, many companies bought the hype that technology would dictate how they did business. "During the bubble--and we saw that again and again--there was an overemphasis on technology and how technology becomes the business model," says Faisal Hoque, CEO at software company Enamics Inc. and author of The Alignment Effect: How To Get Real Business Value Out Of Technology, which will be published Aug. 30 by Financial Times Prentice Hall.

Now, many companies are left with expensive IT systems that might not meet all their business needs. Consultant Ramsdell normally tells clients to develop a business process, then purchase the technology to implement it. But for a business that's already invested heavily in a certain technology, tailoring the processes to fit the technology might make more sense.

Ramsdell tells of a large bank client that implemented an automated purchase-order system two years ago. The rollout took longer than planned because IT staffers found it harder than anticipated to integrate the system into the bank's back-end systems. And bank employees made relatively few purchases through the system, so the return on investment didn't meet expectations. Bank managers raised the possibility of pulling the plug, but Ramsdell advised against such a move because the bank had made a large investment in the technology. Instead, he suggested the bank rework the underlying purchase-order business processes to exploit the system.

The Internet facilitates collaborative business, which can speed up process change. As companies began using the Internet to work together, such as by sharing inventory and forecast data along a supply chain, they were forced to change how they worked. They also began thinking about how Web technology could influence internal business processes, such as using an intranet for workers to file expense reports. "Technology is so pervasive that it shapes business process. We have business processes we couldn't have had before," says Carl Wilson, executive VP and CIO at hotel company Marriott International Inc. "It doesn't matter if the chicken arrives inside the egg or the egg arrives inside the chicken. Today, they arrive at the same time."

At Standard Register, Patterson is exploring technology that lets managers change business procedures with the mere movement of a mouse. For instance, the process of sending supplies destined for one manufacturing plant to another one can be easily changed using such tools. That's because the tools separate the application layer from the business processes, no longer requiring programmers to rewrite core code when a process changes. That, he says, empowers business managers in developing processes without needing IT to intervene. These new technologies, though, come mostly from tool vendors and not from the big ERP companies, Patterson says.

With businesses so focused on business-process change, it's not surprising that technology vendors have picked up the lingo. And some executives think it's nothing more than that. "It's a different orientation in the jargon," says John Glaser, VP and CIO at Partners Healthcare System Inc., Massachusetts' biggest health-care group. All that's new is that ERP and customer-relationship management software vendors have honed their sales pitches to appeal to cash-strapped, efficiency-minded companies. "Clearly, businesses are thinking differently," Glaser says. "All these financial shenanigans caused people to say, 'I can't just financially engineer my future; I might have to improve the way I do things.'"

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