Executive Briefs: February 2004
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
By John Parkinson
The most obvious finding from research regularly conducted by columnist John Parkinson, the chief technologist for the Americas at Cap Gemini Ernst & Young, is that almost no one expects to be spending more on technology in 2004 than they did in 2003. Much more intriguing, however, is the fact that almost everyone expects to be starting up major new projects in 2004 after a couple of years of deep drought. Parkinson's respondents point to infrastructure and application consolidation and rationalization, corporate portals and updated ERP systemsall with the expectation that their efforts will bring quicker measurable returns than in the past.
Organizational Behavior: The Best-Practices Trap
By Robert I. Sutton
The argument for adopting "best practices" seems irrefutable: If you want your company to get better, look at what great companies do. But don't jump to conclusions, says management expert and CIO Insight columnist Robert Sutton. There's no guarantee that management practices that worked wonders in other firms will translate successfully to very different environments; indeed, the attempt can harm, and even kill, a company. Before importing someone else's best practice, look for more solid evidence, perhaps in the form of controlled studies of other companies or pilot programs at your own firm, before you make the conversion.
Expert Voices: Richard L. Nolan A Committee of One's Own
With Allan Alter
The accounting scandals that dragged down Enron Corp., WorldCom Inc. and others in recent years have led to a variety of fixes to shore up investor confidence. But Harvard Business School Professor Emeritus Richard L. Nolan doesn't think it will be enough to avoid the next corporate calamity. Boards of directors must now extend their oversight to information technology by establishing board-level IT committees, similar to the audit and compensation committees most companies have. Nolan, who has sat on the boards of eight different companies, describes how these committees should work, who the members ought to be, and how they can help companies gain strategic advantage.
Trends: Supply and Demand
By Jeffrey Rothfeder
Big changes are afoot in the software industry. The perpetual license is inexorably giving way to yearly or even monthly subscriptions as well as more radical fee plans in which companies pay for software based on how much they use, like they purchase electricity from a utility. And more and more companies are acquiring their programs from vendors who manage and maintain the software on their own computers and deliver it via the Web. Delivery options will only grow more complex, says Contributing Editor Jeffrey Rothfeder, as corporations demand greater cost variability and user flexibility from the vendors they buy from.
Case Study: Blue Rhino Corp.
By Jeffrey Rothfeder
For a company whose prime strategic advantage is its built-for-speed corporate culture, the passage of the Sarbanes-Oxley Act has served to slow down the processes that made it what it was. That may not significantly affect market share, notes Contributing Editor Jeffrey Rothfeder in his analysis of how Blue Rhino is revamping much of its IT systems as it ensures compliance with the act. After all, Blue Rhino's competitors are bound by the same restrictions. But it will certainly force Blue Rhino to be less aggressive in its relationships with customers.
Research: IT Spending
By the editors of CIO Insight
The IT spending freeze is over now that the economy is improving, but the thaw will be gradual, judging by the results of our annual survey on IT spending. IT budgets for 2004 are 2.2 percent higher on average than in 2003, with budgets rising most in the service sector and in companies with revenues below $100 million. Spending on mobile and security technologies, along with web services, should be up 15 percent or more over 2003. Still, 35 percent of IT executives worry that their company isn't spending enough on IT to benefit from the economic recovery.
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