Too many companies learning about IT challenges by trial and error

Corporations, flush with unspent funds in their coffers for information technology programs, are only now getting a good grip on the best and most efficient ways of deploying IT systems, a panel of experts

Corporations, flush with unspent funds in their coffers for information technology programs, are only now getting a good grip on the best and most efficient ways of deploying IT systems, a panel of experts said here Thursday.

Comparing business priorities and spending figures of both failing and successful companies that went high-tech, Jupiter Research analyst Darren Bien presented one of the most promising outlooks on the IT industry at the Nashville Technology Council breakfast meeting Thursday, as part the ongoing ITEC exhibit at the downtown Nashville Convention Center.

"Technology budgets at companies are not shrinking -- their spending has shrunk dramatically over the last couple of months," said Mr. Bien, who previously served as an IT director at Dell Computer Corp. among other companies during his 20-year technology career. He said the biggest mistakes that even the big companies make in their rush to do business online is to focus on easily accumulated revenue, not customer service, and allowing themselves to be wrapped up in expensive innovative technology, not the efficient use of it.

A shocking number of businesses have failed to budget for maintenance costs of newly implemented technologies -- a mistake they often realize after spending 75 percent of their IT budgets on transforming their core business functions.

In the business-to-customer sector, 97 percent of companies recently surveyed by Jupiter Research, a unit of New York-based Jupiter Media Matrix, boasted they offered some kind of web-based customer service function, while only 43 percent of them responded to a trial e-mail request within 6 hours. Other companies either didn't respond at all or took as much as three days to respond.

The three panelists representing major companies that recently went through the back-breaking process of switching their businesses to web-enabled infrastructures demonstrated that almost every business, however big or small, underestimated the initial costs of going online during the peak of the Internet boom. They also didn't reckon on the difficulties of getting employees accustomed to the new system.

"People need to see IT as a business model" rather than as a peripheral part of their business. "Some industries are having trouble seeing it that way," said Paul Cleckner, national director of client service technology with Deloitte & Touche, an international consulting company that employs 50,000 people in the U.S.

Helen Lane, vice president and general manager of Ingram Customer Systems, said after a year-long process of switching the company's 1.5-million book and customer database from the "pick-up-and-pack" style to the web-enhanced self-service system, her department could produce an outstanding book series on the lessons learned. It would include lessons on planning more training sessions for staff, testing the incoming IT workers' skills and not hesitating to invite outside consultants.

"We could not have come this far without [the independent consultants]," said Ms. Lane.

This month, Ingram Book recorded a traffic decline in its call center, and it experienced a portion of its 35.000 customers shifting to the new self-service website.

Caterpillar Financial, the Nashville-based global financing arm of Caterpillar Inc. headquartered in Peoria, Ill., recently underwent a reorganization of its sales finance structure, enabling its staff to carry out transactions at one desk without having to verify various details of the deal that used to involve multiple people. While transactions are now carried out faster, the remaining challenge faced by the company is having to rationalize the costs and the manual labor that information technology helps reduce, and accept the spending required to keep the IT department running, said Tom DePauw, Cat Financial IT manager.