Speeding Up the Future

We continue to be impressed by the overall optimism of CIOs as they contemplate the future. Perhaps it’s in their nature: After all, people who deal professionally with technology are bound to believe not just in the virtues of technology but also in its ongoing progress. This month’s research on the future of IT (page 70) makes clear the direction in which CIOs believe progress will take us: IT will become an even more critical part of corporate strategic success, more efficient and more fully integrated into business processes. And it will continue to get cheaper.

This month’s issue features two case studies, both of which illustrate the beginnings of how IT might look in the future. The first case analyzes the branch-banking strategy of Commerce Bancorp, a regional bank with national aspirations that’s growing quickly by marrying the mind-set of the fast-food industry with the financial services industry’s transactional foundation. The result is what may be the world’s first “fun” bank, complete with glass-windowed lobbies, eye-catching coin-counting machines and branch-opening parties. The fun stuff is underpinned by Commerce Bank’s devotion to service and efficiency; the bank’s IT systems were intentionally designed backwards, from the point of service delivery to the infrastructure that backs it up.

JDS Uniphase, a darling of the dot-com bubble, is the subject of the second case study. A manufacturer of optical equipment, JDSU was created through a strategy of serial acquisitions, and its fortunes faded rapidly as the bubble burst. Back in May 2000, JDSU made a deal with Oracle to outsource its ERP software, using the equally hyped application service provider model, and that deal has been critical to JDSU’s survival. The technology, which has since lost its ASP stigma and been rechristened application hosting, or on-demand computing, has brought significant cost savings to JDSU at a time when the company desperately needed to cut costs. Just as important, it’s made the integration of JDSU’s many acquisitions easier, while letting the company’s executives concentrate on its recovery strategy.

How much more efficient can IT get? These two companies are harbingers of a world in which transactional speed and outsourced computing power will become standard. The competitive advantages IT can bring depend on CIOs helping their companies achieve those advantages first.

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