Back to basics for new millennium
Back to basics for new millennium
With the bug beaten, organisations are now developing strategies for an online future that will deliver concrete returns.
The past 18 months have brought enormous change to the way many organisations' business systems have to work. For more than a year, Y2K compliance issues forced the public and private sectors to direct resources toward infrastructure overhauls.
Now, pre-Goods and Services Tax (GST) concerns have become an immediate priority for many organisations that may have looked to the new millennium as a chance to embark on proactive strategic development.
"Organisations had an amount of bandwidth post-Y2K," said Fred Balboni, practice leader of management consulting services at PricewaterhouseCoopers. "GST will be a bigger factor for many companies, because they will have to dedicate a lot of bandwidth to it to ensure their systems comply."
Other industry members, such as Delphi Consulting managing director Jeff Sussman, maintain humans and their organisations will always react to an external factor, responding to a squeaking wheel so that it will be oiled.
"Lots of organisations were no doubt kicking themselves, thinking that just after going through processes [of] redevelopment for Y2K they now have to go through it again, and many don't have a longer term strategic approach."
"It will take a tremendous amount of willpower to enact strategic development"
Deloitte Consulting's global service line leader for document management and workflow, David Moldrich, agrees. "Businesses will accept GST as an application they have to accommodate, but it shouldn't be a major hurdle," he said.
However, according to Mr Balboni, the GST has the potential to be the most debilitating external factor many organisations have had to face. "It will touch a lot of people, and can't just quietly be done by the technical department," he said. "For every dollar an organisation spends on GST, it will spend two dollars on managing the transition with its people."
This means that organisations are outlaying money for strategic development for which they will see no return. It will also keep them in sync with Federal Government requirements and with their competitors, rather than delivering a benefit above them.
For this reason, strategic projects undertaken in the wake of GST are under greater pressure to deliver some return on the organisation's investment. The fastest way to do this is not to save on expenses, but to stop dollars from leaving the organisation in the first place by streamlining business processes in the name of efficiency.
This factor is beginning to force still somewhat conservative Australian business to become more proactive in determining the future of their management processes.
"It will take a tremendous amount of willpower to enact strategic development," said Mr Sussman. "It goes back to the knowledge management idiom of 'no fear' management - having to be brave with business decisions, and needing to respond quickly. This requires a strategically focussed manager."
NEW YEAR, NEW STRATEGIES
One of the most natural directions for strategic development is online. For the past few years the public and private sectors have started delivering services electronically, although most of these have been consumer-focussed transactions.
"Organisations are starting to look at what electronic interaction will do for their businesses," noted Cambridge Technology Partners' director of interactive solutions, Kevin Hanvey. "The Internet offers lots of opportunities in terms of how to manage their business."
"Banks are particularly realising now that business to business transactions are also important. You can only do so much with online shopping," said Mr Sussman.
Through its mandate to electronically deliver most services by 2001, the Federal Government is also increasingly sharing and managing information between departments online, and beginning electronic publishing projects.
"The important part of business to business is automating processes," said Mr Sussman. "For the first time you can create time with business to business vertical portals, as they manage discontinuity and prevent you wasting time looking for a service."
The ability to manage processes online is a direction in which industry pundits expect most growth for strategic development. "E-business will break into a supply chain context," said Mr Moldrich. "Supply chain is an old approach, but in a new paradigm."
This approach involves understanding where one organisation fits into the matrix of suppliers, and how the organisation's information on its business processes influences its ability to affect control over the chain.
In order to develop a strategic approach to take advantage of this online business environment, an organisation needs to understand how to manage its data for its benefit, as well as the new business framework in which it plans to operate.
Mr Moldrich said that organisations cannot really take advantage of the new business paradigm e-business opens, as many do not fully comprehend e-business itself and how it will change their processes. "This kind of understanding is vital before they can develop in a new environment," he said.
"I don't think anyone's really sat down and defined e-business, what it means and what impact it will have. E-commerce used to be about a transaction of business, but who owns that transaction and how do we ensure information around that transaction is captured for auditing?
"To a degree, we're still in a black box in the corner, until we understand e-business and how to apply it to a supply chain," said Mr Moldrich.
This need to manage information reinforces the role of document management and workflow as foundations for further development. Conni Christensen, director of Synercon Management Consulting, expects document management and workflow to grow this year for this reason. Even beyond this, Ms Christensen stressed the importance of a standard language across solutions, as it "affects how the one system integrates with others".
"Every different technology has its own glossary of terms. These versions need to be translated back to standard terms," said Mr Moldrich.
With a standard language, it may also be easier for organisations to adopt a 'best of breed' approach, and integrate many solutions seamlessly.
WHERE'S THE BUYER?
Although many strategic IT projects focus on developing internal processes, the customer has not been removed from the picture. Rather, customer management relationship (CRM) systems have become a middle ground, as they manage information and empower staff with greater knowledge of their clients, while customers meet a more informed interface that can deal with queries more intelligently and increase loyalty to the organisation. The combination of e-business, CRM and supply chain is powerful, and shaping up to be a popular course of strategic development this year.
"E-business is turning supply chain around, as customers' demand shapes supply, and not vice versa," said Mr Hanvey.
"CRM is a hot area, but it is a point-of-time project. It is like enterprise resource planning (ERP) is at the moment - it is part of a business solution, and necessary to effect a good supply chain," said Mr Moldrich.
Mr Balboni also believed that CRM would be a "number one hot item" for organisations to focus on developing this year.