Unless you’ve had your head in the sand for the past two years, you could not have failed to notice that the impact of technology is again gathering pace. A collective loss of confidence brought on by the dotbomb bubble and subsequent market crash is almost healed as business leaders crawl from the wreckage of an economic downturn looking for new ways to score a competitive advantage.
Cynics might argue that it’s just another bubble in waiting but this time around things are different. Datapac’s managing director, David Laird (pictured), has been working with customers for more than 20 years as a computer services provider and reseller for vendors such as HP, Microsoft and IBM. In that time he has seen IT grow from partitioned pockets within an organisation to the point where we are today, where IT systems impact on the entire business.
“Now there has to be an IT strategy. It’s crucial,” he says. “Before, there wasn’t a need to plan because IT had been a peripheral part of the organisation, perhaps operating in the accounts department or production facility. It now permeates every aspect of an organisation to the point that if the system goes down for even an hour, it’s a crisis.”
The consequence of its growing influence is that it must be managed and deployed from the top down. “The approach to IT is no different to any other management issue in an organisation,” says Laird. “It needs the support of the board and senior management and it needs to be properly planned and managed, firstly in terms of the initial implementation and further down the road in its ongoing operation. IT should be treated as a strategic part of a company’s planning.”
The payback for an organisation that gets it right is competitive advantage, according to Laird. “The strategic change is taking place because of the added dependency on IT and the advantage that good systems can give in a business market. A good CRM [customer relationship management] system, for instance, that’s well implemented and well maintained, will give an organisation advantage over its competitors. The same goes for ERP [enterprise resource planning].”
Theory aside, the reality is that many organisations are struggling to deploy systems that deliver on their promise. And they end up blaming everyone but themselves. In their defence, IT vendors point out that if the same technology works in one organisation and not in another, then the difference must be the people.
“If people aren’t committed to making the technology work, then the technology won’t work. Everybody gets blamed — the suppliers, the technology company, the IT department. But if the support and investment isn’t there, there will be problems,” says Laird emphatically. “Usually there has to be a champion of technology or someone who has a particular interest in it and has the support of the senior management. That’s the key to success.”
Having worked on the frontline for so many years, Laird regularly sees the benefits that a well-managed IT infrastructure can deliver. “I can tell how well run a company is by its policies in its IT department,” he says. “If an organisation has a progressive approach to IT, it’s likely to be a progressive organisation in other areas as well. If its IT department is successful, it’s quite likely the organisation will be successful. The reverse of that is also true. If there’s not a planned approach to IT, it’s often the same in the rest of the company and it’s not likely to succeed.”
The good news is that most companies are making a decent show of IT adoption. “No question, more companies are getting better at it. It’s been forced on them. You can’t compete or run a business now unless you invest in technology and continue to invest,” says Laird.
The bad news is that exceptions to this rule undermine Ireland’s self image as a tech-savvy business community. “There is a type of indigenous company that doesn’t invest enough in technology. I don’t know the reason why — a lack of exposure to international influences maybe? The problem was been compounded by the failure of technology to deliver on its promise in the dotcom boom, but it was a problem before that. We’re probably seeing it less but we still see a lot of it,” he says.
For Datapac and IT vendors, there is still an occasional hurdle to jump when it comes to selling the real value of their products and services. Some customers simply don’t get it.
“We have seen situations where someone will invest half a million euro in a piece of plant machinery and be reluctant to spend €10,000 on ensuring the resilience of their network,” says Laird. “There is not enough appreciation in some organisations on the importance and their dependence on computer systems. It’s a problem that’s built into their culture.”
Difficult customers are a part of any business sector. From a tech vendor perspective, this often stems from an organisation’s failure to fully embrace the IT systems it has deployed. Laird has come across plenty of examples of deals that turned sour: “The MD of a software company once asked me how to get rid of a customer for whom they had developed bespoke software! And I’ve also come across a company that quadrupled its maintenance charge for a particular customer on the expectation that they would go away. They didn’t!”
Fuelled by a modest economic upturn, the past six months suggests to Laird that the market is reverting to what it was before the Y2K and dotcom hiccups, with clear signs of investment and budgets coming back. “If you think about it, there are many organisations out there that haven’t invested in technology for a few years. Now, they more or less have to,” he notes.
The difference this time around is that companies are looking for a return on investment (ROI) not the pie-in-the sky promises of the bubble years. “We’re finding that there’s more confidence coming back into the market but more organisations are conscious of the need for ROI in technology.
“Up until a few years ago they were buying technology without defining an ROI. We’ve now gone back to a situation that pertained in the Eighties and even in the Seventies where investment in computers had to be justified in terms of a return.”
This is a good thing, he concludes: “It’s better in the long term because people are no longer throwing money around only to be dissatisfied when it doesn’t deliver.”
There has been a profound change, however, in the actual technology that customers are investing in. Today, the onus is on integrated systems that has made the buying decision more of an imperative. “You can’t run a business without technology; you have to have the infrastructure; you have to have the internet. Back in the Eighties, you could run a business without a computer. Now, it doesn’t matter what size the company, you need computerisation,” adds Laird.
By Ian Campbell