Management Highlights From Around the Web

Sweeter deals: The hyper-competitive telecom market (not to mention a few bankruptcies) makes this a good time to renegotiate contracts, says a lawyer who seems to know just how to go about it. His column is in The Business Journal in Kansas City. And The Aberdeen Group says it's time for IT shops to do a better job of managing telecom costs. Aberdeen's research indicates that the typical Fortune 500 company spends more than $116 million a year on telecom services and processes more than 15,000 invoices. Yikes!

ERP teams: The key to ERP project success is teamwork among the internal IT staff, the software vendor and a systems integrator, according to this column in the Business Courier in Cincinnati.

Supply chain risks: The dual threats of terrorism and war may be able to achieve what anti-globalization forces have not -- a significant decline in global trade and investment, according to an analysis by The Conference Board. And that is putting stress on global supply chain systems. A Computerworld story addressed this same issue 16 months ago, noting that just-in-time inventory systems are giving way to more flexible supply chain systems that can monitor cargo in transit and re-route the cargo to avoid geopolitical hot spots.

March 27

The privacy chasm: Why are the U.S. and Europe so far apart on the privacy issue? In this article, Wharton management professor Stephen J. Kobrin says the two sides are divided, not by tactical or strategic considerations, but by fundamental differences over the role of government and the meaning of privacy.

The Y2k effect: There was steep run-up in IT spending -- such as buying new ERP systems -- in advance of the Y2k deadline. Now, with systems three to five years into their life cycle, companies are starting to think again about ERP upgrades. But the high costs of implementation, and the lack of a compelling reason for change, mean that companies are still reluctant to upgrade, says this report summary from Datamonitor. Plus, the ERP systems are finally stable and functional, so why go messin' with 'em?

Outsourcing errors: Failure to monitor whether work is being performed correctly after it moves outside a company can result in massive and costly errors. But the author of this Wharton article says the risks can be managed.

Simplicity is power: Consultants at Cap Gemini Ernst & Young say that removing complexity from your IT organization lowers costs and improves operational effectiveness. A simpler IT infrastructure is not only more efficient; it's more flexible. After overspending on IT a few years ago, too many companies today are burdened with overly complex architectures and multiple-vendor platforms.

Tracking the economy: In the last half of the 1990s, the nation was swept up in dot-com fever. Now there's the opposite extreme: IT pessimism, says the Progressive Policy Institute (PPI). The reality is that IT can be the engine of economic growth again, according to speakers at a PPI conference on the digital economy. You can view the presentations on CRM and grid computing, utility computing, as well as IT in transportation and health care.

March 17

Tracking the economy What will it take for corporate IT spending to pick up? A poll of 100 IT executives says the No.1 factor is "improved revenue growth" in their own companies, according to the March 2003 IT Spending report by Goldman Sachs. The No.2 factor is a heightened conviction among CEOs that there's a connection between the IT investment and profitability. And nearly half (48) of these IT executives don't expect the IT spending recovery to come until 2004 or later.

CRM too important for the CIO? Customer relationship management used to be the preserve of IT departments, but now it's being viewed as too strategic for that. This Gartner2 bulletin says CRM may migrate to the marketing or customer-service department instead.

Offshore outsourcing becoming mainstream Okay, maybe you knew that already. But did you know that 20,000 to 25,000 IT jobs in the UK will be lost over the next few years as a direct result? That's what UK analyst Phil Codling says in this Ovum bulletin. "If things can be done more cheaply in other countries, the work will inevitably migrate," he says. "This is a long-term trend, and governments and unions will find it difficult to stem the tide."

The accidental project manager: Many folks are thrust into the "project manager" role without really understanding that that's what they've become. Here's a guide from Gantthead.com to "getting stuff done" as a new project manager.

Looking in the crystal ball: Futurists and management gurus say that corporations over the next five years will face more restructuring and more mergers and acquisitions, according to a story in Exec magazine. That means corporate IT systems will have to be much more modular and flexible to cope with the waves of change, says David A. Smith, CEO of the Global Future Forum.

Another headache from Microsoft: Redmond's new "digital rights management" policy for Windows Server 2003 doesn't seem grounded in the real world, says AMR analyst Scott Lundstrom in this analysis. "In an effort to protect digital information, Microsoft creates a requirement for lock-in of the entire technology stack," he says. "Imagine a world in which, in order to be accessible, protected information must be created in Microsoft Office, distributed in Microsoft Outlook, and supported by Microsoft Web and directory servers. This just doesn't work for any of the large enterprises that AMR Research works with." Ouch!

The "frequent cruiser" credit card: Taking a page from the airline marketing handbook, cruise company Royal Caribbean International has introduced a credit card through which users earn points toward merchandise, onboard amenities, upgrades, cruise discounts and free cruises. That probably required a significant IT investment to keep track of the points earned. Cardholders earn one point for every dollar they charge to the card and double points when they use the card to book a Royal Caribbean cruise or make purchases onboard any Royal Caribbean ship.

Despite hard times, retention is key: It may seem counter-intuitive, but now's the time to worry about IT staff retention, since morale is likely to be low. This story has some tips for keeping your IT staff relatively happy, even when the money dries up for raises and bonuses.

First-day jitters? The first day of an IT project can set the tone for the entire effort. And you'll get off to a bad start if there's a first-day scramble for workspace, Internet access and documents. This article from Gantthead.com gives some pointers on how to hit the ground running.

February 7

10 signs your finance department is second-rate: Guess what? One sign is manual data entry. Another sign is being slow to close the books. Sounds like an IT problem to me. Check out this story from CFO magazine.

IT alignment or IT innovation? This essay at Babson College's executive insight Web site says IT alignment with business goals is nice, but actually producing innovative IT requires an entrepreneurial culture that many traditional IT shops don't have. It's a bit academic, but it will get you thinking about whether your organization really fosters innovation.

This sounds familiar! Market researchers at Aberdeen Group have set up a free CIO Knowledge Center for access to research, e-newsletters, online conferences and analysts.

The best companies at cost control? Southwest Airlines, Coca-Cola, Six Flags, DuPont, Praxair, Gillette, 3M, Caterpillar, Campbell Soup and Clorox are among the best at cost management, according to CFO magazine's study. Whether this is good news or bad news for IT is your call. Some of these companies may just be cheapskates, and some may use IT in brilliant ways to cut costs.

Thrifty CIOs? CIOs are a penny-pinching lot -- who knew? An AMR Research report indicates that CIOs at large American companies spent, on average, only 92% of their 2002 budgets by year-end. The cuts fell largely on outside consultants, which don't seem so important in a sluggish economy.

SAGE advice: The Council for Excellence in Government has formed a group of more than 25 former government CIOs to give advice to the folks now in the same positions. It goes by the unwieldy moniker of "CIOs -- Senior Advisors to Government Executives," or CIO SAGE. The senior advisors have already had a meeting and visited the Massachusetts IT shop.

December 11

Scanning for savings: Self-scanners help retailers save money, but labor unions worry they may lead to mass layoffs and worse customer service, according to this story in the Dayton Business Journal. Jill Cashen, spokeswoman for the United Food and Commercial Workers International Union, says cashiers can catch pricing mistakes, bag groceries and provide some old-fashioned human interaction.

Storage is hot: Asked to rank where their IT spending growth will occur, 100 CIOs put storage first, services second and servers third. They also gave a lukewarm initial response to IBM's grand plan for on-demand computing, according to Merrill Lynch's TechStrat Survey.

Oops! Insurers have poured resources into Web sites to sell insurance products, but it turns out consumers are more interested in getting quotes than actually buying insurance online, according to this story in the Cincinnati's Business Courier.

November 12

Software moves the candy: Halloween wasn't spooky for Hershey Foods this year -- as it was in 1999, when a malfunctioning SAP system cost the company $150 million in lost sales. According to The Philadelphia Inquirer, Hershey's distribution systems ran smoothly this year, thanks in part to a recent upgrade of its SAP system.

Be bold, invest in IT! This article from Exec magazine says that, instead of postponing key IT projects in the face of cost control, you may be better off making strategic IT investments now.

Supply chain disruptions: Last year's 9/11 attacks -- and temporary shutdown of the nation's airlines -- had ripple effects throughout the supply chain and just-in-time inventory systems. So MIT is holding a Dec. 5 conference entitled, "Supply Chain Management Under the Threat of International Terrorism." Executives responsible for any facet of supply chain management are encouraged to register. Research on the topic is available from MIT's Supply Chain Response to Terrorism Project.

Risk: It's not just security When CIOs think of "risk management" they usually think of IT security. But it's more than that, says an article from researchers at the Robert Frances Group. Risk management also covers business continuity, compliance with laws and regulations, contracts, customer data management, intellectual property and vendor selection.

October 29

Retail smart tags: Too clever? The latest development at upscale Manhattan retailer Prada -- a place with $500 shoes -- is adding radio frequency ID tags to merchandise so that clerks can build a profile of what shoppers try on in the dressing rooms. Privacy invasion or personalized service? You decide, after reading the Associated Press story.

CIO as business strategist. These days CIOs are supposed to be boardroom-level strategic planners while still maintaining excellence in the IT shop. In this column, Meta Group analyst Karen Rubenstrunk describes how to meet that challenge and develop a good relationship with the CEO.

Free Web seminar. Learn the 12 key elements of a disaster-recovery program at this Nov. 12 seminar from BetterManagement.com. The presenter is Angela Devlen, who's responsible for corporate disaster-recovery planning at Partners HealthCare System and an expert on emergency preparedness.

Take back the e-neighborhood. Online merchants -- tired of losing $1 billion a year to credit-card fraud -- have formed the Internet Merchant Fraud Roundtable to blacklist the bad guys, according to this story. As one organizer put it: "We're trying to construct a neighborhood watch."

The envelope please. The Turnaround Management Association has given one of its Turnaround of the Year awards to Robert Hoyt, a member who whipped struggling Associated Grocers Inc. into shape over the course of 15 months and avoided bankruptcy. One of the company's earlier problems was "management information systems failures," but those problems seem to be fixed.

October 9

Volatility leads to outsourcing: A survey by Cap Gemini Ernst & Young and IDC finds that companies in sectors that are especially volatile are 40% more likely to turn to outsourcing. The most popular functions to be farmed out are applications, infrastructure, payroll, the IT help desk and logistics.

Cost-cutters: The Chronicle of Higher Education has compiled a list of 10 ways to cut IT costs. Some of the tips are specific to universities, but some are quite applicable to the corporate environment -- if you have an open mind. Limit printouts! Cap bandwidth! Read this story!

Fight money-laundering: New software from SAS Institute Inc. will help banks and other financial institutions detect unusual behavior, such as deposits of large amounts of cash in multiple accounts by one person. The software can also check customer identities against lists of bad guys. Here's the story from The News & Observer in Raleigh, N.C.

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