Sector guilty of overselling ITself

For years, the IT sector has oversold itself and has comprehensively failed to understand the needs of its customers…but firms still maintain their enthusiasm for the Internet despite dotcom doldrums.

For years, the IT sector has oversold itself and has comprehensively failed to understand the needs of its customers, an industry expert has claimed.

Mike Roberts, former director of business process improvement at Rolls-Royce, said the IT industry, as a cash-rich sector with a large marketing budget, has sold products based on what they will be able to do in the future, rather than what they can do now. And because companies are used to having to upgrade their IT every couple of years, the industry has been able to get away with it, he told The Engineer.

Roberts, who recently retired from Rolls-Royce, also raised these concerns at a recent industry seminar held by analysts Cambashi. IT companies fail to understand the impact and overall cost to their customers of buying new software, he said. ‘They don’t seem to recognise that their product is only part of that cost.’

Training and communicating with staff, and revamping business processes to use the new software dramatically increase its cost, he said.

‘IT companies need to be a bit wiser, and more in tune with these issues, and the whole impact of IT on industry would be seen as much more beneficial.’

Peter Thorne, director of consulting at Cambashi, said the IT industry could do itself a favour by paying more than just lip-service to understanding the business into which they are selling, he said. But IT departments within companies can be just as blinkered, he said.

‘In the worst case scenario, there are IT departments who will act as a barrier between the vendor and the users, and believe their sole reason for existence is to translate what the users want into the language of technology for the IT firms,’ Thorne added.

Valerie Cumming, managing director of the Computer Suppliers Federation, said the IT industry was now facing up to the need to gain a long-term understanding of its customers’ business, rather than simply going for the quick sale. ‘However, it is a question of balance,’ Cumming said. ‘In any business there are short-term demands that have to be met.’

The success of IT companies in the long-term will come from developing a relationship with their customers, she added.

…But firms maintain enthusiasm for net despite dotcom doldrums…

The Recent dotcom sector slump has not dampened companies’ enthusiasm for e-business, according to a recent survey.

The report, by e-Mori for BT Ignite, showed that firms are still committed to e-business despite recent high-profile dotcom failures. The survey, into companies in the UK and Germany, found 87% of firms in Germany and 64% in the UK had not changed their attitudes to e-business in the wake of doom and gloom in the sector.

Despite the casualties, this ‘lemming stage’ has been useful in allowing companies to experiment with their e-business strategies, said Danny Garvey, director of marketing at BT Ignite Solutions.

He said: ‘We have passed that stage now, where people just needed to get on board. People have learned from this and are reflecting on where the business benefits of the technology are going to be.’

But the majority of respondents still see improving their image as the main benefit of e-business, rather than reducing their overheads.

Companies see this as an ‘easy gain’ when starting out on projects, the research suggests, with 71% of firms in the UK and 65% in Germany saying that e-business investment has given them a more progressive image.

In contrast, only 30% of UK firms and 39% of German companies said e-business projects were having a measurable affect on their bottom line.

‘Companies were getting involved just for their image, but that is no longer sustainable, and they are having to move beyond it,’ said Garvey.

Businesses cannot do everything at once though, he added. They need to identify where their greatest return will come from, whether through improving customer relations, making efficiency gains or increasing business integration.

He said: ‘Companies are starting to get more grounded. You can’t now get into this without seeing where the financial returns are going to come from.’

On the web