In today's tight economy, IT managers and vendors have to deliver better business processes, not just better technology
Other executives are more charitable. Acterna's Bent says the business-process modules embedded in mySAP's ERP system weren't an option a few years ago. And in recent years, SAP has hired more people with business experience as consultants to help customers leverage their products. "They offer a high level of competency to help customers get to the right solutions," Bent says.
ERP and CRM packages require less customization to fit how a business operates, Marriott's Wilson says, because vendors tailor products to the business processes of individual industries. His lament: No major vendor has developed such a system for the hospitality industry.
By moving its purchase orders online, Children's National Medical Center forced staffers to follow the same procedures, says Pardue, director of development and support applications.
Cheri Pardue, director of development and support application at Children's National Medical Center in Washington, has benefited from software built to work within the processes of a specific industry. The medical center uses Lawson Software Inc.'s modules for its payroll and human-resources systems that are adapted to the health-care industry. The modules "offset the need for us to develop them ourselves. It's a great benefit to us, especially when we see the cost savings," Pardue says.
Top IT executives tout business-process change as central to the value their systems can add. PeopleSoft tracks the results of public companies, and CEO Craig Conway says 85% of those that improved their bottom line in the first half of 2002 did so by improving their internal processes, not by increasing revenue. Cisco Systems CEO John Chambers says companies still have a lot of potential to wring productivity gains out of existing technology investments. Cisco is using its experience to show customers how to make those changes. "Merely putting in the applications, the infrastructure, doesn't get you productivity," he says. "It's fundamental change of business or government process where you really get your leverage." (For more, see "What's Next," Aug. 5, p. 34).
Rick Bergquist, chief technology officer at PeopleSoft, is spending a lot of his time helping customers try to optimize business processes. He cites Web services, technology that uses standards designed to make it easier for applications to communicate with each other, as one reason that business-process change will get easier. Using Web services to link PeopleSoft apps will let companies change processes more often without considering whether the underlying IT system will allow a different kind of information sharing, he says. "Ten years ago, people did a lot of customization," Bergquist adds. "The problem with that is customization doesn't keep them current with the best business practices when they change."
PeopleSoft will soon introduce a set of offerings built to manage entire business processes that the company says won't require much customization. For example, Order-to-Cash will manage nine functions and the business processes that underlie them: marketing, sales, order entry, inventory, invoicing, shipping, accounts receivable, collections, and after-sales support. Among the other offerings will be Procure-to-Pay, Inquiry-to-Resolution, and Customer Service. Oracle is promising similar modules in its 11i E-business suite.
Comergent's process-oriented software was a key selling point for Seagate's Remley, but he knows the technology will support even a bad business model.
Vendors making products that can change more easily with companies' changing business processes makes sense to customers such as Jay Remley, director of E-business at Seagate Technology LLC, a maker of computer storage devices. Seagate uses Comergent Technologies Inc.'s E-Business System, a Web services-based partner-relationship management software suite, to develop a portal to more efficiently serve its customers. It includes applications that support business processes such as customers ordering online and negotiating prices. Comergent's process-oriented software was a key selling point, Remley says. Yet he knows that the software also is flexible enough to support a really bad business decision. "Technology will support whatever process you define," he says, "whether it's a good one or a bad one."
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.