Overwhelmed, underappreciated, overexpectant, underdone--2001 was a year of dramatic extremes. Here's an overview of some of the trends and strategies that flew high or flamed out.

InformationWeek Staff, Contributor

December 14, 2001

13 Min Read

Let's face it, 2001 was a tough year. In terms of a momentum shift, the pendulum didn't just swing back; it turned tail and ran. What started out as overexuberance ended up looking like underachievement. As an oversupply of venture capital disappeared, an undersupply of confidence became apparent. Finally, a hard-won pragmatism overcame an underlying sense of frustration.

It was a year of dramatic "overs" and "unders." Some technologies and business trends--CRM, wireless connectivity, Web services--overpromised easy returns and undersold the difficulty involved in implementation. The overexpectations for some E-commerce strategies undercut their practical application. And an understaffed IT workforce was overwhelmed with new priorities.

Yes, 2001 was a year of extremes. But for every overinflated technology or strategy, an unheralded or underappreciated one came to the fore. Thus, the editors of InformationWeek provide our picks for the most overrated and underrated of the past year.

Most overrated management skill: Vision
Most underrated management skill: Communication
President Bush (the elder) called it "the vision thing," the ability to foresee trends, predict developments, and act on a strong belief in how the future will unfold. The Internet, with its enormous potential and rapid pace of change, put a premium on vision. Indeed, the early days of the Internet explosion were nothing but vision: How the world of online commerce would change every aspect of business, from delivering groceries to selling steel.

Some of those changes came about, though more slowly than anyone anticipated. But almost nobody foresaw the dramatic economic downshift that occurred in the first quarter of this year. And absolutely no one foresaw the events of Sept. 11. That put vision in perspective. If there's a theme in terms of management style for 2001, says Kerry Moynihan, managing director of executive search firm Christian & Timbers, it's this: "Keep your visionaries. Give me proven bottom-line managers."

This isn't to suggest that vision has no value. Far from it. Vision is what drives business forward. But a surfeit of vision to the exclusion of other business attributes can be deadly. Exhibit A: a little company called Enron. While shady accounting was probably the root of Enron's undoing, the company's imminent demise is a cautionary tale of hubris and ambition.

Enron also illustrates the other side of the equation: the importance of communication. The energy company was infamous for its cryptic communiques with outsiders. "In difficult times, it's important to communicate more frequently and more effectively," Moynihan says. That applies to all aspects of a business--communicating with shareholders, business partners, and employees. Enron is an extreme example, but the lesson is universal. Says Moynihan: "Overcommunicate when times are bad."--John Soat ([email protected])

Overrated Web feature: Personalization
Underrated Web feature: Performance
It's your sister's birthday. She loves gardening. At Amazon .com, you find a book on growing organic vegetables. You buy it. You hate gardening. The last garden you stepped into was Madison Square Garden. But Amazon doesn't know that. How could it? It's pegged you as a dirt-under-the-nails, green-thumbed fool. Now, whenever you visit Amazon, there's a pitch for more gardening books that you couldn't care less about. That's personalization. But who is that person?

Most of us don't care whether a Web site knows our name or whether we prefer Beethoven to Bela Fleck. What we really want are Web pages that load fast, shopping carts that glide through checkout, and a site that's easy to click through and tells us the shipping cost before we have to pay. Flash plug-ins? Ugh.

"I'd argue that technology is almost an inhibitor right now," says David Schehr, Gartner G2 research director. "Consumers want to get in, get on with it, and get out." If the sweater from Gap.com doesn't fit, can I return it at a store? If the DVD player costs $20 to ship, could I could pick it up at a store? That's not too much to ask. Besides, half the time we're online just to check prices anyway. Let's not make it more complicated than it needs to be.--Christopher T. Heun ([email protected])

Overrated management challenge: IT skills shortage
Underrated management challenge: Keeping top performers happy
What a difference a year and a recession make. The IT job market, and its salaries, perks, and the number of unfilled jobs, soared along with the roaring '90s economy. At least it did until the economy pooped out. Earlier this year, the Information Technology Association of America estimated that 400,000 IT jobs were still unfilled because of a lack of talent--down from 1.6 million openings a year earlier. The ITAA won't have new numbers till next spring, but the prospect that a shortage remains is doubtful. Some people question whether a shortage ever existed, but there's no denying IT managers put up a lot of money for people whose resumés still included "High School Debate Club."

"The pay was astronomical for many people who were, at best, wet behind the ears," says Victor Janulaitis, president of management-consulting firm Janco Associates. With the pressure off growth-oriented IT projects--at least temporarily--and on basic strategies such as stabilizing operations and cutting costs, many managers are less worried about keeping their best people happy. More-enlightened managers are doing what they can, such as being creative with incentives even if they don't have cash. But those who buckle under short-term pressures will find themselves throwing money at lesser talents when the economy rebounds. "A lot of companies have the attitude, 'if you want to go, then go,' even with their stars," Janulaitis says. "It's really bloody."--Marianne Kolbasuk McGee ([email protected])

Overrated telecom service: Broadband
Underrated telecom service: Dial-up
Broadband was going to change the way we access information. Gobs of venture capital chased broadband technologies in the belief that the market was about to explode. We started thinking that, pretty soon, we wouldn't be able to live without broadband.

Hogwash. If ever a technology has fallen victim to its own hype, it's broadband, which has been the subject of a potent Catch-22: Users want broadband service only if it provides access to information that's unavailable via dial-up connections, but no one wants to develop broadband services until the audience is large enough to warrant the investment. Most consumers haven't seen a reason to jump on the high-speed bandwagon.

According to a recent Parks Associates survey of the 46 million dial-up subscribers in the United States, nearly three-fourths are content without broadband. It doesn't help that broadband service isn't always possible to get, and that once you've got it, it's not very reliable. "You need a Zen alignment for everything to work," Gartner analyst Kathie Hackler says.

And what's benefitting from broadband's failed promise? The much-maligned, often-ridiculed dial-up connection, which continues to be the connectivity method of choice for most telecommuters. "You can poke fun at dial-up," Hackler says, "but it works more consistently than DSL or cable modems do."--Tony Kontzer ([email protected])

Overrated collaboration tool: Videoconferencing
Underrated collaboration tool: E-mail
Videoconferencing is a cheap alternative to business travel, and it's gotten tremendous buzz since Sept. 11 as companies curtail travel. But the rave notices for videoconferencing are overblown.

Videoconferencing's main feature offers little more than talking heads. True, there's a certain comfort factor talking to people face-to-face, even when they're virtual. When discussions get heated, seeing a colleague's eyes narrow and lips quiver adds a dimension that's lost on the telephone. But are these video gatherings worth the thousands of dollars companies must invest in hardware and software? The price of videoconferencing technology has plummeted in recent years, but videoconferencing services still can cost $50 an hour vs. $10 an hour for a teleconference. That still looks expensive to many these days. An InformationWeek Research survey of 150 business-technology managers taken after Sept. 11 revealed that only one in five will consider implementing videoconferencing technology.

Perhaps E-mail remains the best collaborative tool of all. Hal Varian, dean of the School of Information Management at the University of California, Berkeley, used it recently when he gave a lecture via telephone about the information glut to a Massachusetts Institute of Technology class. Varian simply E-mailed a PowerPoint presentation to MIT professor Erik Brynjolfsson, who then projected the slides onto a screen. The lack of a video link didn't hurt the give-and-take between Varian and the MIT students. "Even if I were there," he says, "it would have been in a dark room."--Eric Chabrow ([email protected])

Overrated IT strategy: Wireless
Underrated IT strategy: Security
Untether computing is supposed to let us access any application, anywhere, anytime, and raise productivity. But other than ubiquitous E-mail access, wireless services still have a long way to go to reach their potential. Much-hyped third-generation technology represents the next era of wireless data access, promising speeds of up to 1 Mbps compared with today's 14 Kbps.

But exactly when carriers will deliver 3G as a viable wireless networking option is still in question. The best-case scenario, analysts say, is 2004--three years behind schedule. Aside from a few successful applications, such as sales-force automation, wireless applications have yet to become a business mainstay. Perhaps that's a good thing, considering how insecure most wireless networks are.

On the other hand, who appreciates each day that goes by when the corporate network hasn't been hacked and sensitive customer data remains intact? Ever hear a financial analyst ask about a company's information security strategy or praise the CEO for protecting corporate assets? Employees, stockholders, customers, and bosses don't worry much about security until something goes wrong. So, who cares when everything is going right? You do, because you know security is the bottom line of a successful IT strategy.--George V. Hulme ([email protected])

Overrated emerging technology: Web services
Underrated emerging technology: XML
Pssst. Buddy. Do I have a deal for you! The future's not in plastics. It's in Web services.

That's the pitch from Hewlett-Packard, IBM, Microsoft, Oracle, Sun Microsystems, and all the other vendors trying to convince the IT market that Web services will change our Internet experience. They'll prove themselves right eventually, but for now, the sales pitch sounds like the same old story of raising expectations for products still on the drawing board. There's work to be done to make Web services viable. For instance, vendors need to agree on standards to ensure the interoperability Web services promise--always a dicey proposition. And vendors need to do a better job of educating their customers on this complex set of technologies.

The Extensible Markup Language is a technology that Web-services advocates have adopted, but it's capable of standing on its own. XML is real and relatively straightforward to use--and therein lies its success. Companies are deploying XML to mitigate the incompatibilities of databases, network-management systems, and Web apps. XML works because its creators kept it simple.--Antone Gonsalves ([email protected])

Overrated money-management tool: Online stock quotes
Underrated money-management tool: E-billing
Here's a quick test of your acronym acumen: What's TMI? Too much information--as in real-time streaming stock quotes. For the average investor, the online stock-quote ticker is a mind-numbing reminder of one of the Web's larger lessons--more information doesn't always equal more informed decision-making. Streaming quotes are meaningless to folks who aren't particularly concerned about short-term volatility, says Dennis Ceru, director of retail brokerage and investing at the TowerGroup. "It's just movement on a screen," he says.

For real value, look to E-billing. Can 32 million Americans be wrong? That's the latest estimate of online users of this service, says Gartner analyst Avivah Litan. The credit-card industry enjoys the largest share of users at 26 million. E-billing makes perfect sense for this sector, since the information on credit-card bills is dynamic, unlike other businesses that have relatively static billing.

E-billing activity experienced healthy growth in the past year, up 60% according to a recent Gartner survey of 4,500 consumers. But businesses aren't saving as much money as they could, because about 99% of them still send paper bills to customers. Until they scrap the paper, they won't realize the hoped-for savings.--Sandra Swanson ([email protected])

Overrated business tool: Knowledge management
Underrated business tool: Knowledge
This was supposed to be the year that knowledge-management technology took off. Or was that last year? The imminent arrival of a coherent knowledge-management platform always seems to be just over the horizon.

That's not for lack of trying by vendors such as IBM's Lotus Development Corp., which offers three tools for the job: Discovery Server document engine, K-station client, and QuickPlace shared workspace. The expense and complexity of deploying knowledge-management tools is only one part of the problem--perhaps one that Lotus recognizes. Early next year, Lotus plans to integrate K-station, QuickPlace, and the WebSphere Portal Server into an extranet framework for accessing apps running on IBM's WebSphere application server.

But knowledge management as a technology suffers from the bigger problem of being less about tools and more about culture. What's required for knowledge management to gain widespread acceptance is a massive cultural shift in businesses. The emphasis must be on workers' willingness to share their expertise and on rewarding them for doing so. Only then will the enabling technology become valuable. That's when corporate data becomes that elusive but most highly prized corporate asset: knowledge.--Jennifer Zaino ([email protected])

Overrated CRM attribute: Quick ROI
Underrated CRM attribute: Complexity
Companies implementing CRM software regularly underestimate the complexity of these projects. Gartner estimates that upper management views almost 70% of CRM deployments as failures. The keys to a successful CRM deployment strategy are to get executive buy-in, change the corporate culture where necessary, and make business processes more effective. Barton Goldenberg, founder and president of Information Systems Marketing Inc., says the people factor can account for half of a CRM project's success; changing appropriate business processes can account for 30%, and technology only 20%.

Anthony Candito, senior VP and CIO at Metropolitan Life Insurance Co., is in the midst of altering MetLife's CRM strategy. MetLife is integrating all 30 of its businesses by creating a master database that will store all of its data on each customer in a single record. While others work to complete the implementation, project evangelists are traveling to MetLife offices to explain system changes and get employee feedback. That's a smart strategy, since user rejection is at the root of many CRM failures.--Jennifer Maselli ([email protected])

Overrated job skill: 24-by-7 availability
Underrated job skill: Making yourself scarce
We've all heard enough whining for one lifetime from people complaining about cell-phone users. They endanger us while we're driving, they talk too loudly--and they think they're so important. But this isn't about them, is it? It's about us. We're not happy talking on the phone while the ticket agent asks whether we packed our own bags, but this job's a pressure-cooker and people need to reach us, right?

Here's a thought: Let's make ourselves scarce. Being unreachable once in a while might be just what our careers need. It builds respect. It forces independent thinking in co-workers. It might just make us sane.

Respect? Ever hear someone answer a cell phone from a public rest room? That won't impress the boss. Independence? Co-workers won't make a decision if they can always reach someone who'll make it for them. Sanity? Let's ask ourselves whether by taking two minutes to brief a co-worker about a potential problem, we can spend an afternoon without eyeing the phone as if it were the sword of Damocles hovering overhead. We tell ourselves we need to be reachable because we're needed. More likely: We fear we might not be. --Chris Murphy ([email protected])

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