While CFOs still grumble about the billions of dollars Y2K siphoned from the bottom line over the last four years, forward-looking CIOs are already designing new systems that could pump those dollars back into the company several times over. For some CIOs, Y2K was an opportunity to clean up decades of system patchwork and to streamline networks, as well as to identify the true mission-critical applications and unplug the rest. Others side-stepped the process by investing millions in ERP.
But what now? Even with the new year three months away, CIO can hear rumblings in the distance. It's not the sound of panic but that of executives running to the CIO's door to ask about their pet projects, the applications that have been left twiddling while Y2K burned. You've had a reprieve from the requests, but don't expect to rest on your laurels. You now have to prioritise what comes next. As one consultant says, "Y2K was a time to contemplate our navels.
Post-Y2K is a time to reassess what we learned from the greatest technological migration in the history of man and put it into action." Generally, CIOs are organising the backlog of applications into three distinct areas: the Web, corporate-knowledge mining and customer relations. Naturally, some of these overlap. And of course, there's an overarching goal, undoubtedly affected by how much companies have been spending on technology recently. CIOs report they're examining all new projects in terms of improving the organisation's ability to compete in a new Web-dominated world.
Circumventing the Yo-Yos
While Y2K efforts have been roiling, there's been a push to serve customers better, made more urgent by the fact that competitors on the Web can communicate more easily with them. As one retailing industry executive admits, "If we don't do something about providing better and easier service to our customers, some yo-yo is going to set up a kind of www.storefront.com and take away our business." At the same time, CIOs are trying to maximise their goals post-Y2K, looking for applications that provide value internally and externally. For example, one long-distance telecommunications carrier is working on a Web-based billing system that will save about $US750 million, according to Janet Wylie, president and CEO of HCL James Martin, the Fairfax, Virginia, firm that's developing the application. That's a hefty chunk of the customer's annual $US1.8 billion billing costs. "Companies can't allow Y2K to eclipse what they must do to remain competitive," says Wylie.
Although the new application is in an early specification stage, slated for deployment in 2000, similar systems have capabilities where customers can download and print their invoices and mail in payments or click on a button to authorise an automatic withdrawal from a cheque account. A typical company spends an average $7.50 per customer bill, whereas it will cost this company less than $1 with the new system.
Even state governments are getting on the bandwagon of combining customer service with internal savings, making e-business systems a priority when it comes to licence renewals, taxpayer support services and financial assistance.
In the latter scenario, aid recipients can use debit cards for supermarket purchases and ATM cash withdrawals instead of food stamps and cheques, which are easily lost or stolen. George Boersma, CIO for the state of Michigan in Lansing, says this electronic system will reduce fraud and streamline the antiquated paper process.
While systems like these would have evolved over time, says Don Heiman, chief information technology architect and officer of the state of Kansas in Topeka, they were accelerated as a result of Y2K. "It gave us the opportunity to re-architect our computing infrastructure and determine how many different agencies could share core business applications." Of course, it's easy to deem a project a priority that so clearly aids both internal and external groups. But internally, the same bugaboo that CIOs have faced time and again pops up -- how do you determine the value of an IT project? Even now, it all goes back to alignment with the business: understanding your company's goals and translating them into the applications and technologies that support those initiatives. The key question to ask baying executives when setting priorities is, What business goal does this application support? What Hath ERP Wrought? One lingering question about priorities relates to ERP and the value it brings, or was supposed to bring. Companies that went with ERP to handle Y2K and want to build on that foundation have a whole raft of software available to improve sales, productivity, order fulfilment and customer relationship management, notes William Ruckle, director of systems innovation and integration with Ernst & Young LLP in Detroit. Other companies, stunned by how much structure ERP imposes, may not want to extend the end-to-end solution even further into their organisation.
While ERP systems were being implemented, the Web sprang up almost unexpectedly. Many CIOs are tackling intranets and extranets to improve customer communications and manage supply chain relationships. Web applications are almost the antithesis of ERP applications: Deployment times are shorter, and value can be measured more quickly. And should business trends change, Web-based systems can be adapted in months, not years.
Is it possible to combine the best of both worlds in this regard? NCR (US) vice president and CIO Sam Coursen thinks so. With business units operating in 130 countries, NCR was burdened with hundreds of different reporting systems ranging from financials to HR to data repositories, which it had developed and redeveloped over the decades to take advantage of new technologies and ever-changing business conditions.
To overcome the hurdles of reconciling a tremendous volume of disparate operational data, Coursen decided to implement Oracle Financials R/10.7 across the enterprise. In a second phase, during which Coursen will bring in version R/11, the company is deploying Web access to the system. "We'll be able to do faster profitability analysis and opportunity tracking," says Coursen. "This will substantially improve our ability to understand on a very current basis how we're operating around the world." Learn from the Past If there's a fundamental key to Y2K prioritising, it's to make sure you don't repeat the mistakes of the past. Here's the challenge, though: you're under pressure to bolt out of the starting gate and get results. But if you spread one message around your company in the new millennium, let it be that application development efforts throughout the organisation have to be coordinated carefully. It's a march, not a scavenger hunt.
If you give in to the impulse of OK'ing applications here, there and everywhere -- even if their priority is carefully considered -- you run the risk of ending up in the same place you were before the turn of the century. You could be stuck with a plethora of systems that were created in a vacuum, as opposed to a system that was developed in a technologically balanced world where information is shared on a regular basis. Computer Technology Associates' Sy Inwentarz warns, "Prioritise on building applications and systems that integrate with your company's workflow instead of building more stovepipe systems that gum up the works." vPost Y2K LocallyPeter Hind, CIO columnist and manager of end user programs at IDC, is interviewing Australian CIOs regarding their post Y2K priorities. Hind will report on the results of this Computer Associates-sponsored survey in the November issue of CIO.
CIO also wants to know what you learned from Y2K -- that is, what you're doing differently because of experiences dealing with the millennium bug. It could be the way you manage projects, people, assets, applications, relationships -- or something we haven't considered. Please send your thoughts via e-mail to deputy editor Cass Warneminde at email@example.com