Were you holding the purse strings tight . . . salting away funds in case of disaster? Now
that those Y2K contingency funds are up for grabs, it's high time you put them back in the IT
budget and redoubled them.
Let's put away that three-character symbol of doom and gloom and
remember the age-old adage "it takes money to make money." In short, technology investments
pay off, so it's time to get back on track.
Everyone read the headlines last year about how
companies were holding off IT spending in anticipation of Y2K problems. Nonetheless, The New York
Times recently reported third-quarter Commerce Department figures that put capital spending at
$1.2 trillion annually, or 12.7% of the entire US economy. More than $900 billion of that investment
goes toward equipment and machinery including a high percentage of computers and software. This is
not irrational exuberance, it's good, sound investment in the future.
Where's all that money going? A study released late last year by Xplor International
(www.xplor.org) gives some indication. Self-described as the
"electronic document systems
association," Xplor polled more than 300 members to compile its annual Technology Directions
Survey. The study found that the number-one future investment priority — by a two-to-one margin
— is "e-commerce via the Internet." Lesser-ranked investment priorities included
telecommunications infrastructure, LAN/ WANoffice systems, mainframe/centralized computers and
knowledge managment, in that order.
What motivates a company to invest in technology? "Reduced cost" was the number-one
anticipated benefit. Executives put cost reduction ahead of "anticipating customer
requirements" by more than a three-to-one margin. Other, lesser-ranked benefits included
retaining customers and increasing revenue by creating and selling additional services.
It is not surprising that e-commerce and reduced cost should show up together as top executive
priorities. Most believe — and there is ample proof — that Internet-based methods of
distributing information and products are much more cost-effective than traditional methods.
Just what does "e-commerce via the Internet" mean? For readers of this magazine, the big
story isn't in online shopping carts and catalogs as much as it is in efficiently sharing
information with customers and business partners.
As described in this month's cover story,
companies are investing in portals to give employees and business partners unified access to all
relevant information and applications. This will lower training costs, reduce retrieval times and
enhance productivity.
Others are investing in electronic bill presentment and payment and Web-based account and order
information systems. This will cut call center costs, improve customer satisfaction and gradually
reduce paper and postage costs.
Still others are adding Web-based capture streams to paper-based processes. These will eliminate
paper handling and data entry costs while improving accuracy. Workflow technology will tie electronic
and paper capture streams to customer relationship management tools (as explained in "Integrating
& Automating Customer Processes"). This will speed service and improve customer
satisfaction while adding cross-sell and up-sell opportunities.
Looking beyond all these practical advantages, there are also the incalculable advantages that will
come from a better-informed workforce and a happier customer base. All it takes is confident
investment in finding a better, more cost-effective way of doing business.
