The arrival of the year 2000 should be a cause for celebration in IT departments around the globe. For although many may have had a busy New Year’s Day squashing the last of the Y2K bugs, the good news is they’ve rid their budgets of a huge resource drain.
With Jan. 1 safely passed, corporate technology spending budgets can refocus on launching new projects — in particular, new e-business ventures. According to Cap Gemini America senior vice-president Jim Woodward, “Those resources that were aimed at year 2000 remediation are going to be redirected to strategic, IT-based business initiatives. And e-business will play a major role.”
This is especially true in industries heavily reliant on Y2K-vulnerable legacy systems, such as healthcare. “One of the things Y2K did was pull a substantial amount of good money away from e-business projects,” says Mark Caron, CIO at Blue Cross Blue Shield of Massachusetts. “And while e-business is an area many companies still found resources to invest in this year, they’re going to invest even heavier by the end of first quarter 2000.”
Richard Putz, executive vice-president and chief strategy officer for C-bridge Internet Solutions of Cambridge, Mass., says CIOs need to start preparing their e-business technology strategies soon. “Sometime around April 1, the CEOs are going to turn to their CIOs and want answers — now that there are no more Y2K problems — concerning what the company is doing to maximize e-business benefits.”
A positive side effect of the Y2K remediation exercise is that, for the first time, top-level management at many corporations came to understand the strategic role IT plays in their businesses, says Cap Gemini’s Woodward. “E-business has so much to do with core strategy and company market positioning that CEOs are now taking the time to figure how they’re going to use e-business to restructure along their core competencies in the Internet economy,” he says.
Eric Jackson, a spokesperson for Andersen Consulting, says corporations that have fallen behind on e-business investments are going to “finally put it in fifth gear” after Jan. 1. And those that already have a strong e-commerce presence on the Web? Their focus will be to invest in Web-enabling their legacy back-office systems for fulfilment, inventory and accounting. Companies that have heavily invested in flashy Web-page order forms, only to find themselves getting a clerk to re-enter orders into their systems, are going to work feverishly to streamline their businesses.
“To call these initiatives ‘projects’ doesn’t do them justice,” Jackson says. “It really boils down to deciding what kind of business they want to be in the new economy and whether they’re going to survive.”