In fact, if we take a look at the economy, we can make some generalisations about specific trends. But the days of being able to categorically say that everything is either one way or the other are over. Of course, if you were in this business before the last sustained boom, you will recognise that what was once always the case is now the case again.
If we look back in time, it was very rare to see every segment of the IT industry doing well simultaneously. In fact, the normal state of affairs is that one segment typically does better at the expense of another segment. With the latest economic upswing, many people seem to have forgotten that this is the natural state of the industry. So rather than seeing every segment of the industry doing well at the same time, we are beginning to see some segments outperform others as we move technologies through their normal life-cycle process.
So where are we in this post-dot-com economy? Well, we are right where we’ve always been. Once again we are seeing Global 2000 companies assert themselves as leaders when it comes to technology adoption. But rather than merely buying technology products and services in a knee-jerk reaction to perceived threats from dot-com startup companies, the Global 2000 is reverting to its usual process of slow, methodical technology evaluation before mainstream adoption.
Rather than deploying a CRM (customer relationship management) application across the enterprise in the name of e-business innovation, Global 2000 companies are taking the time to study how these applications really affect business processes through extensive periods of pilot testing. Similarly, the fundamentals of supply-chain processes are now being tackled before blindly creating digital exchanges that impose business requirements that most companies can’t support.
In the short term, instead of rushing to deploy the latest and greatest line-of-business application, the focus will be on optimising the investments that have already been made. After all, most of the first wave of CRM implementations have been less than successful, and in our rush to deploy ERP (enterprise resource planning) and e-commerce applications, little attention has been paid to integrating those applications with each other. Yet these applications become truly useful across the enterprise only through integration.
The overall downturn in the economy might be accelerating this process, but there is no doubt that this day was long in coming. Constantly deploying new line-of-business applications without taking the time to assess their impact and integrate them with existing IT assets is not a sustainable economic model. So in the short term we may see a fair amount of rationalisation of the hundreds of companies that create line-of-business applications. At the same time, companies that make integration tools seem to be faring better than most, and companies such as IBM cite their focus on integration services as the primary reason it has not been hit quite as hard.
Although a fair amount of disagreement swirls around what impact the economy will have on IT budgets, one thing is clear: it is important to pick your spots. If you are working on IT projects that show a tangible benefit to the company within a reasonable time frame, you’ll probably be just fine. If not, the merits of the project might have been dubious to begin with. And it only stands to reason that in a downturn most companies will try to make do with as much of their existing hardware as possible, regardless of the best-laid product life-cycle plans of the people at Intel and Cisco.
So at the end of the day this is a time to reassess, re-evaluate and rethink our priorities and forget the torrid pace that we have been on for the better part of a decade. That is not such a bad thing after all.