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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
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Tech Analysts: What's in store for 2002 By Staff, Special to ZDNet January 14, 2002 URL: http://www.zdnet.com.au/news/business/soa/Tech-Analysts-What-s-in-store-for-2002/0,139023166,120262926,00.htm
Top tech industry analysts tell IT decision makers what they should expect this year, and how they can make the best of a tight budget. Tough times mean tough IT decisions. A persistent recession and national security concerns contribute to what was already a tall order for IT: Improve existing processes and deliver ROI on a limited budget. We asked top industry analysts what will impact IT departments the most in 2002, and how they should respond. The following analysts offer their thoughts:
This year won't be any easier for IT than 2001, and large enterprise projects will be put on hold. You'll see some innovative application integration, but beware of obsolete mobile applications. Across industries, geographies, and businesses, the use of IT as an engine for efficiency, growth, and opportunity will remain undiminished in 2002, although healthy scepticism and smarter planning will accompany it. Gartner predicts three crucial areas will shape business investment in IT in 2002 and beyond: external forces, business behaviour, and applications and technologies. External forces
Business behavior
Applications and technologies
Forrester Research: Try Web servicesYou should experiment with Web services in 2002. But you'll need to rise above the hype and confusion.
During 2002, many firms will push for ROI from previous investments. As a result, eProcurement, supply chain, and CRM efforts will remain active--albeit in bite-sized projects. Also, the combination of terrorism and virus attacks will keep IT departments busy with security audits, patches, and disaster recovery plans. As these efforts continue, look out for the emergence of Web services, which Forrester defines as: "Software designed to be used by other software via Internet protocols and formats." The idea behind Web services isn't new--firms started linking apps via the Internet years ago. What's new is a fresh batch of XML-based standards - led by SOAP, WSDL, and UDDI--that can dramatically lower the costs. Hype will go wild in 2002 as every major vendor announces Web services capabilities. So IT departments must brace for the result: confusion. Web services are often described as applications using public registries to find and link with other applications. The standards for this public discovery process, however, are still many years away. Nirvana may not exist, but IT departments should experiment in 2002 with simple Web services that link to known partners and between internal systems. Start with Web services that: 1) Read from enterprise apps without writing any data--avoiding the need to recover from failed transactions. Good candidates: tasks like checking prices, inventory levels, or order status. 2) Leverage well-componentised code--COM or J2EE. Vendors like Cape Clear Software generate Web services interfaces from existing components.
Giga Information Group: Squeexing ITCutbacks are nothing new, but this year's need for hard ROI will require an ingenious balancing act. This year, companies need to improve existing processes, not technology.
Reducing growth in spending, which will drive IT to cut back and squeeze more value out of existing resources, will be critical for IT shops in 2002. This requires that all investments have a hard ROI, near-term payback, and a more rigorous assessment of costs, benefits and risks, resulting in projects in the following areas: Consolidation and integration. Along with a reduced number of systems and increased centralisation of accountability of IT, this means investment in tools to integrate operational applications and data. Automation. Project examples include human capital management systems to automate labour-intensive processes around recruitment and resource allocation, and storage systems to automate managing data based on corporate policies. Client retention. Projects will be in CRM, data analysis, and profiling that attempt to manage, understand, and anticipate customer needs at a detailed level. Knowledge sharing. Fewer people doing more, and the need to reduce loss of knowledge through turnover will lead to greater investment in sophisticated search, data categorisation, and data visualisation tools. The need for greater security will drive all forms of security to be combined under one group. That group's increased importance will be seen by the addition of security architects as part of the core architecture team and the creation of a chief security officer, primarily with technology vendors. With products, the emphasis will be less on cutting-edge technologies and more on improving existing processes, including implementing software patches, maintaining tight configuration control of servers, and injecting security reviews into project management processes.
AMR: Securing your boundariesExpanding the boundaries of the enterprise will expand business opportunities--but security can't be an afterthought. It needs to be a top priority.
The majority of organisations' IT budgets will remain flat from 2001 to 2002, which is on average somewhere between 5 percent and 10 percent of revenues. This will certainly affect the choice of IT projects as CIOs are determined to see a quick ROI, while maintaining and improving the current infrastructure. Security has traditionally been a top priority, but the size of the security budget does not always match a company's security concerns. As organisations look to expand their boundaries in 2002 to include partners, suppliers, and customers, IT will need to develop strict, proactive security policies in order to maintain the security of channels, as well as intellectual property (IP). The ability to work closely with partners will increase business opportunities and improve the visibility of the supply chain for organisations, but security measures can't be an afterthought and need to be included as part of business planning. Virus protection, intrusion detection and firewalls are normally the first line of defense, and AMR Research expects to continue to see investments in those areas, however, IT also needs to update external access policies. More importantly in 2002, IT departments need to focus on addressing the strategic concerns of the business, such as authentication and authorisation to applications from external constituents. Ensuring secure extended boundaries should be a top priority for all organisations. Playing with new and improved security gadgets might be tempting, but choosing those over strategic initiatives is not the wisest way to spend dollars that are already tough to come by.
Hurwitz: Emerging technologiesMoney will be hard to come by in 2002, but to save money in the future, IT still needs to invest in emerging technologies.
Probably the most common, overarching challenge concerns adding more value to the business during 2002 with roughly the same budget as 2001, and in some cases less budget. Thus, the most important development for IT during 2002 involves human process and management, not technology. The trick is to somehow balance the tactical demands placed on IT with strategic and even political objectives. This implies that the CIO and IT department need to do a brilliant job of prioritisation. Allocating resources so that IT aligns optimally with business goals is the primary objective. "Must haves" must take complete precedence over "nice to haves," but IT should confirm that the "must haves" reached that lofty designation through business justification. In past years some IT departments have been dragged through business justification of IT investments by the finance and line-of-business arms; in 2002 IT should champion the idea of business justification. At the same time, IT should stand its ground on long-term architectural standards, and continue investing, albeit carefully, in emerging technologies. Commitment to standards and adopting emerging technologies at the right pace together set the foundation for more effective IT performance long-term. In terms of emerging technologies, certainly Web services, grid computing, and advances in storage software, security techniques, and management software automation all promise to save money, create opportunity, and add effectiveness to IT's value proposition in the years to come. 2002 is the year to at least gain some familiarity with these technologies, and even implement them on a selected basis.
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