Dot-coms are going out of business at a frightening rate. Dozens of click- and-mortar companies are scaling back their Web presence. Consumer confidence is at a five-year low.1 The economy and the e-business revolution seem to be seriously sagging at the moment. Is it time to play it close to the vest and cut back spending at every level, including information technology (IT)? Many companies seem to think so these days, as layoffs are seemingly rampant in the auto, manufacturing and dot-com sectors. I, for one, don't think it's time to wildly slash spending. I think it's time to wisely allocate spending.
The decisions you make today, especially those regarding your IT systems, will affect your bottom line no matter what happens to the economy in the next couple of years. However, if you make good decisions and spend your dollars judiciously, you may be in a better position to weather any economic storm. There are several ways to sensibly spend your precious IT dollars that will net you big returns in the long run. These returns although they may be "soft" at first will eventually lead to either actual savings or increased revenue. Either way you win. Two initiatives that will net you positive savings or revenues are a corporate-wide IT systems audit and a corporate-wide IT application and process integration initiative.
How many IT systems do you have? Do you have any statistics on how much it costs to run them versus what they're worth to the company? It's a simple business school cost/ benefit analysis. If you have dinosaurs for IT systems that cost more to maintain than they're worth, you have problems. To determine if you have dinosaurs lurking in your company and sucking away big chunks of badly needed capital, conduct a corporate-wide IT systems audit.
This is a relatively simple process that won't cost you a lot and will provide a quick, accurate (if it's done right) analysis of where you are and where you need to be. Some issues to examine in an IT audit are: importance to the organizational mission, platform compatibility with other systems, utilization percentage versus maintenance cost, hardware and/or software costs, and telecommunications costs. When you examine all these issues, build an IT cost model. If you have systems that aren't compatible with the rest of your infrastructure or if you have systems that are costing you a fortune but are providing little benefit, the model will tell you. When you build the model, build an IT plan to fix the problems exposed by the model. I guarantee that a big part of this plan will include an EAI and process integration initiative.
Your IT cost model is bound to tell you one thing loud and clear: your systems aren't communicating the way they should to provide you with timely, accurate information in order to make long-term (and sometimes short-term) business decisions. Problems that arise from this IT miscommunication may include inaccurate demand forecasting which leads to poor inventory management, inaccurate product costing estimates which lead to under/over-pricing, inaccurate production data which leads to waste and inaccurate financial data overall which leads to investor edginess. There is a way to solve this; I harp on it all the time. Make your systems communicate by integrating them.
I can't say this enough. You must, if you do anything, undertake an EAI initiative at least with your core business systems such as marketing, accounting, customer service and distribution. Contrary to what you may think, this is not a high-cost initiative when you consider the benefits you will reap from it. Just imagine a world where you can get data from all your mission critical systems without spending the two-or-so million dollars and an entire year (or more) creating a corporate data warehouse. With an integrated systems architecture, you can retrieve data from your systems including a data warehouse if you have one and be sure that it is recent, relevant and accurate for decision making.
The best EAI tools out there, when coupled with powerful reporting tools, can create a seamless information infrastructure for your organization. Some of the best EAI tools out there are: IBM MQ Series (which includes MQ Inte-grator), BusinessWare from Vitria Technology Inc., webMethods Enterprise from webMethods Inc., Business Inte- gration Suite from iWork Software Inc., and ActiveEnterprise Suite from TIBCO Inc. Trust me, in this time of alarming uncertainty, confidence in your IT systems and their ability to enhance your decision making is priceless.
Where you go from your IT audit and EAI initiatives is up to you. There are many projects you can consider once you have the power of integrated systems a CRM/data mining initiative being the first on that list. You have to get the integrated information first though. That means you have to spend, and that's a scary thought considering the state of the IT industry today. However, if you spend wisely, you will see the rewards.
1. As quoted in an article dated January 30, 2001, by the Conference Board, the producer of the Consumer Confidence Index (www.conference-board. org/whoweare/frames.cfm?main=/search/dpress. cfm?pressid=4616).
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