Although CIOs interviewed late last month said they were deeply concerned about the potential business impact of the war with Iraq, few foresaw any significant effect on international IT projects currently underway or in the pipeline.
But some IT executives warned that could change if the war causes travel problems for their companies’ employees or customers.
For example, Cardinal Health Inc. in Dublin, Ohio, is working on multiple enterprise resource planning (ERP) projects “that may experience travel-related impacts to their schedules,” said Richard Gius, the medical equipment supplier’s senior vice-president of IT.
The most at-risk projects are those that require consultants or other external workers to travel from country to country, Gius said. IT projects contained within individual countries on any of the five continents where Cardinal has operations should see little impact from the war, he said.
Mark Hedley, senior vice-president and chief technology officer at Wyndham International Inc., said the Dallas-based operator of hotels and vacation resorts doesn’t have any major IT projects in the works in the U.S. or internationally that are likely to be adversely affected by the war.
However, Hedley said that if the war were to continue for more than a week or two and adversely affect the travel industry, Wyndham would have to make adjustments in order to shore up its finances. “I’m most concerned with domestic air travel and lack of passenger activity,” he said. “Airlines are feeders to our hotel markets.”
MasterCard International Inc. doesn’t expect the Iraq conflict to affect any of its international projects, including an ongoing conversion of its European systems to its global IT architecture, said Jerry McElhatton, president of global technology and operations at the credit card company’s data centre in O’Fallon, Mo.
If international travel disruptions do arise, Purchase, N.Y.-based MasterCard plans to expand its use of teleconferencing, McElhatton said. Teleconferencing technology “is not always a suitable alternative” to travel, but it can facilitate communications when necessary, he said.
Three of MasterCard’s IT staffers have been called up to active military duty thus far, and a few more could follow. But McElhatton said he hasn’t had to replace anyone with interim contractors, nor has he had to create internal workarounds to support MasterCard’s operations.
There are signs that the uncertainties preceding the war affected IT spending by some companies. For example, Oracle Corp. earlier this week reported a four per cent decline in sales of new software licences for its third quarter, which ended Feb. 28. Jeff Henley, Oracle’s chief financial officer, said the looming war led corporate users to hold off on purchases in February after relatively strong business in December and January.
Unisys Corp. has already completed the bulk of a global rollout of Oracle’s ERP applications and Siebel Systems Inc.’s customer relationship management software, with the exception of putting some final touches on an ERP implementation in Latin America. “So a great deal of our heavy lifting is behind us,” said John Carrow, CIO at the Blue Bell, Pa.-based IT vendor.
Like many other companies, Unisys has cut back on corporate travel because of the weak economy and is now “very adept” at conducting IT-related business via teleconferences, videoconferences and the Web, Carrow said.
The war in Iraq won’t slow IT spending, but a quick resolution of the war won’t boost spending either, according to U.S. and European chief information officers (CIOs) surveyed by Merrill Lynch & Co. Inc. Of the 100 respondents, 73 said the war in Iraq would not slow spending, while 17 said it would. A quick end to the war would only lead to a spike in spending with 10 of the respondents, while 90 said it would not, according, to the survey. Investment bank Merrill Lynch released the results in a report in late March. Of the 100 CIOs surveyed, 75 work in the U.S. and 25 in Europe.