Executive Briefs: November 2002

By CIOinsight  |  Posted 11-02-2002

Case Study: General Electric Co.
By Dave Lindorff
General Electric Co. is one of the few companies on the front lines of the real-time revolution, attempting to use IT to squeeze time from the ways it makes, buys and sells everything from plastic to jet engines. The attempt so far has led to huge time- and cost-savings: CIO Gary Reiner says GE has cut nearly $2 billion so far, and has eliminated weeks, if not months, from the elapsed time of various processes. Writer Dave Lindorff profiles how GE is using so-called "digital cockpits" and other data-tracking methods to shrink not just assembly-line times, but decision-making and execution times as well. Lindorff looks at the real-time movement and its goals, and the lessons managers can learn from GE's grand experiment.

Expert Voices: Christopher Meyer
With Terry A. Kirkpatrick
The overall pace of the economy is accelerating as more and more businesses wire up to the Web and other new forms of information technology in order to become more productive and improve their time to market. But executives beware, says Christopher Meyer, vice president and director of the Center for Business Innovation at Cap Gemini Ernst & Young: The leap to the next level of cross-industry automation will demand a fundamental re-think of the way companies are structured and managed. Meyer says companies will have to learn how to be driven by events rather than try to control them.

Whiteboard: How to Value An It Project
By Christopher Gardner and Ray Trotta
Given the sluggish economy and spending constraints at most corporations, CIOs are looking for new ways to defend their IT projects. But deciding which projects to push and which to shelve is tough. In the past, such calls were highly subjective: There was little hard data to show how a project might affect the bottom line. But what if CIOs were to think more like investment managers, who spend every day of their working lives using quantitative analysis to calculate the value of potential investments? This month's Whiteboard, by consultants Christopher Gardner and Ray Trotta, presents a way to determine the value of an IT investment to a company's bottom line in terms of its likely addition to the company's share price. It's based on the notion of discounted cash flow—how much money the new system would bring in over the course of its life, and how much that money would be worth today.

Research: Managing Vendors
By CIO Insight editors, analysis by Terry A. Kirkpatrick
Are your vendors delivering maximum value? Most of the 305 IT executives participating in this month's survey say they're content with their vendors, but the reality is that about a fifth are dissatisfied with the reliability of their vendors' products, more than a third think vendors respond too slowly to requests, and a quarter feel they're not getting the ROI they want. As Terry A. Kirkpatrick reveals in an accompanying article, CIOs are overwhelmingly concerned with reliability, and that may be causing them to overlook the larger question of value as they manage their vendors.

Strategic Technology: Fixing CRM
By Gary A. Bolles
The differing perceptions about what CRM can do and how to measure success, along with the inability of executives to agree on CRM project goals, have led to cost overruns and applications that don't live up to expectations. But CRM shouldn't be this hard, writes contributing editor Gary. A. Bolles. All CRM can do, he says, is one or more of three basic things: cut what it costs to service customers and sell to them; increase sales; and boost customer loyalty and satisfaction. If companies can focus on the value of CRM and the customers they're trying to woo, success would be much easier to achieve.

Due Diligence: The End of Growth
By Eric Nee
Don't expect too much when IT spending turns around. Columnist Eric Nee says we might be reaching the end of an era of technology as a growth industry, with spending over the long haul likely to grow at just half the 13 percent rate it grew during the last four decades. The result Nee predicts: less innovation, more consolidation and greater rivalry among IT vendors.

Leading Edge: Common Ground
By Warren Bennis
Leaders are products of their time, and that is why the youthful leaders who came of age with the Internet and the dot-com gold rush differ so much from those of the World War II generation. Columnist Warren Bennis, who recently studied the two groups, predicts this decade's recession and political conflicts will give this new crop of leaders a deeper appreciation of authentic heroism