Innovative tech projects won't slow down for some

What recession? These IT shops are pressing ahead with emerging-technology initiatives with a keen eye on future revenue potential.

Like a lot of organizations, Aspen Skiing Co. has zero-based all of its operating budgets for 2010, so approval is needed for any expenditure at all, not just increases in spending. And that, of course, means justifying all areas of IT spending for the new year.

But that austerity doesn't mean that the company, which operates four resort mountains in the Aspen/Snowmass, Colo., area, will scrap its investment in emerging technologies.

In fact, Aspen Skiing plans to expand its deployment of state-of-the-art radio frequency identification technology. Last season, it embedded RFID tags in its customers' season passes and installed automated access gates at the resorts. This winter, it's including RFID in all daily lift tickets as well. One potential future project involves using RFID tags to track all rental skis and boots at the four mountains. The company will also extend the RFID program so that ski passes can be used as stored-value cards in any of its retail shops and restaurants, says Paul Major, managing director of technology.

The expanded use of RFID technologies "helps us to identify our truly loyal customers," says Major.

Aspen Skiing is also designing smartphone applications that send alerts to customers' mobile phones when they're at one of its resorts, offering them product or service discounts and notifying them about upcoming resort activities, says Major. The types of iPhone and BlackBerry applications the company is developing "are potential revenue drivers," which could easily justify the small amount of money the company has set aside for such skunk works projects, says Major. (Read "7 smartphone predictions for 2010".)

Aspen Skiing is hardly alone in its efforts. Computerworld's 2010 Forecast survey of 312 IT executives found that despite tight budgets and a gloomy economic outlook, most companies (65%) aren't hesitating to try new technologies, and 32% of the respondents said their companies will continue to value experimentation with new technologies. Meanwhile, 51% said they won't cut back on efforts to use technology to create new business innovations.

As companies continue to scrutinize their IT spending through at least the first half of this year, they will generally spend "a little bit less on R&D stuff and on blue-sky innovations," says Alex Cullen, an analyst at Forrester Research Inc. As with Aspen Skiing's skunk works project bucket, funding for emerging-technology initiatives often falls under "untracked spending" at many organizations, says Cullen.

Still, he adds, it's important for CIOs to tie emerging-technology initiatives directly to the company's business strategy to gain executive buy-in.

Russ Finney, vice president and CIO at semiconductor manufacturer Tokyo Electron U.S. Holdings Inc., says a tough business climate doesn't necessarily mean that emerging-technology investments have to generate a higher ROI. But senior management is more closely scrutinizing IT spending these days, he adds.

"If you had a couple of people looking at the hurdle rate before, now it's twice as many," says Finney. "So you'd better have a good story."

At Tokyo Electron, advanced search filtering and retrieval systems, such as the Thunderstone Search Appliance from Thunderstone Software LLC, let engineers scan a wide range of data sources using a single search bar, says Finney. A Google search on the same topic by two engineers would probably yield similar results, he says. But using Thunderstone's search tools, "we'll likely get different results based on their specific roles in the company," he says. "It's another step forward in knowledge management."

Persuading senior management to invest in emerging technologies in tough times is a lot easier when you have at least one technology champion in your corner, says Edward W. Marx, senior vice president and CIO at Texas Health Resources Inc. That's true within his organization: Incoming Chairman Leonard Roberts was previously CEO of RadioShack and is an ardent supporter of IT initiatives.

That type of commitment is enabling the health care provider to test out new technologies for clinical applications. For instance, the company set up a two-day demonstration of Microsoft Corp.'s Surface multitouch computer at one of its hospitals in Dallas in September 2008. Nearly 200 clinicians stopped by to check out the device, which responds to natural hand gestures and real-world objects, and to offer their suggestions for potential applications, says Mike Skupien, an application architect for the Arlington, Texas-based company.

Skupien and his team then worked with Microsoft and a third-party developer to create a clinician/patient portal where physicians could open patients' records in their presence. Texas Health Resources is exploring two uses for the system this year: for orthopedic surgeons to provide background information to candidates for knee or hip replacements, and to help educate patients with chronic diseases such as pediatric diabetes.

Social Marketing

With offices in Arizona and New York, McMurry Inc. competes with just a handful of custom publishers around the U.S. But while most of its competitors are "hunkered down in survival mentality," McMurry is making "exploratory investments" in social media and content aggregation tools for marketing purposes, says Saul Morse, vice president of client services for the company's interactive division.

Most of the investments McMurry is considering for social media applications are focused on creating effective strategies for clients, with little to no additional hardware or software investments required, he says. "It's pretty hard to monetize social media and content aggregation and come up with an ROI model," says Morse. "Our clients know they need to do it. It's about coming up with a business case for them."

Like many organizations, Korn/Ferry International is investing more in collaboration tools this year to drive tighter communication between its internal consultants and with its clients. As a Microsoft shop, Korn/Ferry is considering Office Communicator 2010, a unified application that allows users to communicate and collaborate across different locations and time zones via instant messaging, voice, desktop sharing and video.

The system could be useful for the executive recruiting firm and its clients, says Senior Vice President and CIO Dan Demeter. Because the system detects and manages each user's presence, Korn/Ferry could use it to determine when a client is online and coordinate videoconferencing calls to discuss potential job candidates, says Demeter.

"We're serving clients around the world, and they want visibility into the search process," he adds.

While shrinking revenue has forced some companies to cut back on emerging-tech investments, other organizations, such as BlueStar Energy Services Inc., continue to expand their IT operational and capital expenditures. BlueStar, a Chicago-based energy services company, plans to double its capital expenditures in 2010 and open a second software development center in either Chile or Costa Rica, says Chief Technology Officer Tom Keen.

BlueStar, which already operates a software development center in Lima, Peru, is looking to establish its own private cloud this year to improve the resiliency and scalability of its production environments, says Keen. The company is currently evaluating a technology called Puppet from Reductive Labs LLC to help manage and administer the cloud, says Keen.

By establishing a private cloud, BlueStar expects to leverage its existing server virtualization investments and invest about one-fourth what it might have otherwise spent to build out its technology infrastructure, says Keen. "We're re-leveraging a lot of our assets," he says.

Hoffman is a freelance writer in New York. Contact him at tom.hoffman24@gmail.com.

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