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October 10, 2003

The Strategic Bond

IT growth depends on better understanding of what people need to meet objectives

by David Stodder

What does information technology really contribute to the strategic and competitive prowess of an organization? After the smoke clears, the mirrors shatter, and the hype no longer thrills, what does it take for technology to further business objectives?

Perhaps as a ritual act of cleansing and refocusing, the IT industry periodically grinds through a fever of angst about the limits of its current success and what it will take to do better. Nicholas Carr's Harvard Business Review article, "IT Doesn't Matter," has been the talk of the industry since the beginning of summer. For advanced IT and intelligent systems, the newest barriers are societal and political. In his Decision Support column, Seth Grimes offers an excellent discussion of experience encountered by the U.S. Department of Defense's short-lived notion of a futures market devoted to terrorism and the potential of other destabilizing political events around the globe. Before a decent explanation could be made, the mainstream media and some elected representatives determined that the program was repugnant and the Pentagon pulled the plug.

Riding a clear strategic business need, CRM became the highest-flying sector of the enterprise applications market. Now, however, the sector struggles to escape negative associations with unsatisfactory return on investment.

Terry Jabali's feature, "Relationship Dynamics: The Savior of CRM", delves into what may be the biggest impediment to CRM: the failure to see technology implementation as merely an extension of employee behavior and the organizational rules by which employees respond to customers. The bottom line of Jabali's article is that few organizations considered how much they would have to change their processes and behavior to be serious about raising customer value.

Jabali discusses how performance incentives might direct employees and, potentially, external business partners to put a higher priority on customer relationship objectives. This brings Jabali's observations and recommendations into the domain of business performance management (BPM), which is the subject of our IntelligentBPM editorial supplement that subscribers received with this issue. BPM is a good example of how business and IT strategists, aided by software application providers, are forging a higher-level bond that could make IT "matter" a great deal.

On the Cover: Web Services

The maturation of Web services technology is itself overhauling the relationship between IT and strategic objectives. As Doug Barry explains in his feature "Web Services: It's About Connections", the transformational potential of Web services integration cannot be understated. Integration has been the Achilles heel of the IT industry, which Michael Hudson's E-Business Developer column explores from a software development perspective.

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This brings us to Stewart McKie's cover story, which describes well the business service provider (BSP) potential currently unfolding as Web services integration becomes more mainstream (see "BSP: First-to-Market Opportunity"). In many industries, BSPs will break new ground — that is, they will enjoy first-to-market privileges by inventing entirely new "products" and sales channels.

IT will grow once it regains relevance to immediate business objectives. The most fascinating chapters of this story are surely ahead of us.