It's hard to believe two years have passed since we launched Technology & Business, but if I dig around the pile of magazines on my desk long enough, there's the November 2001 edition with Bill Gates on the cover. Two years may not be a terribly long time in the grand scheme of things, but you couldn't have picked a more tumultuous period in the IT industry. Or maybe it just seems that way.
Back when we started, the dot-com boom was hanging on to the edge by its fingernails, before spectacularly crashing down a matter of months later. By that stage, a new mindset was already emerging: "No more hare-brained schemes without a business plan!" businesses finally said, putting their feet down. "No more spending without clearly defined returns!"
But like all backlashes, the last two years of financial obsession have gone too far, and the pendulum will swing back again. What's going to happen when it does?
The IT industry's current obsession with return on investment has passed its peak and is well on the way to the trough of disillusionment, to borrow from Gartner's hype cycle. Analysts are describing these penny-pinching days as "the new normal", as if it's always going to be this way, so we'd better just get used to it. This is particularly short-sighted of them, particularly the same analysts who tell us about hype cycles.
We're beginning to realise that if we judge IT projects simply by whether or not they can generate a fast and easy return, we'll end up neglecting the projects that--though long term--will allow us to transform our businesses and give us competitive advantage. That may sound like a hangover from the dot-com days, but the last two years has not dulled my belief that IT can make radical changes and have sweeping benefits to businesses that do it right.
Speaking of the hype cycle, it's about time there was a hype cycle for hype cycles. Currently, Gartner analysts and journos are fond of applying the hype cycle to just about every new technology or idea that comes along. I've been guilty of this myself, obviously. But in the end the hype cycle is merely a descriptive tool, not a prescriptive one. Although all technologies, presumably, go through this cycle, the cycle can't tell us which of them will emerge at the end making a difference to people's lives, and which will be all hot air. And the irony of spin-meisters like Gartner talking about hype is--I hope--not lost on you.
| Analysts are describing these penny-pinching days as “the new normal”, as if it’s always going to be this way, so we’d better just get used to it. This is particularly short-sighted of them, particularly the same analysts who tell us about hype cycles. |
For those of us who entered the industry in the last five years or so, it's hard to see. All we've known is the steep slope up to the peak of the dot-com craze, and then the subsequent crash. Having a sense of perspective--that there have been crashes before, and there will be peaks again--is a reassuring thought. On the other hand, it doesn't help make the car payments when we've had to take a salary cut to get a job--if we're lucky enough to have one.
I think the IT industry will grow out of its current doldrums when people start to state the business benefits of IT as more than simply a financial return. When we talk about IT in terms of what it will allow us to do that we couldn't before, the money will--eventually--flow again.
I've only been in the IT industry for about 30 years, so I probably lack sufficient experience to make a cogent comment on "hype cycles". But I learned, as a former editor on a number of computer magazines, that a lack of experience doesn't stop anyone standing on a soapbox.
There have always been "hype cycles". Some have been generated by the IT press, and some by the market itself. There have been hype cycles within hype cycles (for example, the IBM PC initially was a hype cycle withing the overal desktpp computer ype cycle; Lotus 1-2-3 was itself a smaller hype cycle within the IBM PC hype cycle). In 1979/80, "distributed processing" peaked in its mainframe hype cycle, and returned to a new peak in 1985/86, this time with mini-cpmputers and mid-frames as its emphasis.
Overall, IT spending has been running on a very long hype cycle, but the strength of the cycle has been disguised by the dramatic lowering of hardware and software costs that matched an increase in personnel costs. Quite often, the benefits of IT to business have been negated by the problems caused by ill-planned implementations and unforseen side effects. For example, few people saw how much time would be spent on answering e-mails, and even fewer understood that there were 12 chances in 365 that the company accounting system would crash on the last day of the month.
Today, virtually all businesses, and even government departments, are suffering from "economic rationalism", and justifying IT expenditure is becoming harder when everyone else has been forced to make economies. While retailers understand the benefit of "loss leaders" in increasing overall sales, few financial controllers see the value of having management information provided more quickly (perhaps because their companies do not have managers capable of using this information). Adding to the woes is the increasing specilatisation of "IT professionals", to the point where we may soon see advertisements for people with specific expertise in (say) "Windows 2003 Service Pack 3, alternate Wednesdays; ability to tie own shoelaces an advantage but not essential."