Consensus reached: 2002 will be a year of IT efficiency realisation

This year, companies will seek technology effectiveness by focusing on business justification when evaluating current and future IT investment. Emphasis will be placed on immediate, technology value extraction, backed up by financial evidence of business benefits gained. This was the key message conveyed at the KPMG Consulting and Oracle Business Breakfast held in Johannesburg late last week.

According to the opening keynote speaker Herman de Kock, senior analyst at BMI-TechKnowledge, the IT sector in SA can expect to see a slight market recovery starting from the second quarter of 2002. "SA`s tech sector experienced a 10% compound market growth last year, a 1% growth increase can be expected for 2002," said De Kock.

He also mentioned that the impact of the negative rand, dollar exchange will heavily effect foreign currency-based product spending.

This in turn will lead to a greater adoption of local operation management services such as outsourcing and integration services as well as invested market acceptance of the application service provider (ASP) model.

CIOs and management will be forced to re-budget every quarter to adjust to the uncertainty in the local business environment-forcing IT plans to adapt as the financial outlook changes. As a result of the changing economic climate, technology distributors might feel the pinch and the IT market will be forced into greater consolidation with smaller players being acquired or becoming insolvent.

Ian Beaton, partner of KPMG Consulting, reiterated that the optimisation of investment will be key throughout 2002. "IT investment in performance optimisation is the correct decision to make for the year to come. We envisage that companies will be focusing on streamlining transactional processing as well as implementing embedded controls into operating and processing systems. The technology empowered decision-maker will now more than ever reign over business success."

Beaton further mentioned that the majority of local corporations and large organisations have already invested in some form of an enterprise resource planning (ERP) system such as Oracle. "The systems are in place and the money has been spent. However, efficiency and true benefit is not always being derived. Companies are not necessarily utilising all the functionality offered as part of its enterprise software licence.

"Additionally, we are finding that employees are trained by osmosis. This means that they learn through observing and do not necessary understand how to make the most of the system. Companies need to identify key people with in each department and develop their understanding of the system, it`s performance, and other possibilities offered by the system," said Beaton.

Oracle offered further insight by mentioning that companies should utilise its propriety methodology called the Capability Assessment Tool or CAT. "Rapid ROI is what the market demands and tools that assist in value extraction should be utilised to mine hidden value," said Mohamed Cassoojee, e-advisor, Oracle Corporation SA.

The CAT process starts with a facilitated workshop that allows Oracle users to easily map corporate imperatives such as generating revenue and cutting costs, for each of the three CRM domains namely marketing, sales, and service. These domains and key imperatives are then mapped back to a business flow chart, thus allowing customers to identify supplementary IT solutions if necessary and to identify if they are leveraging fully on the existing investment made.