Hard work used to be the remedy for all business ills. Sales down? Make more calls. Take more trips. Shake more hands. Costs rising? Squeeze your suppliers. Cut out the deadwood. Trim the expense accounts.
Today technology is offered as the magic pill. Sales down? Buy more laptops. Build a database. Install customer relationship management (CRM) software. Integrate wireless applications. Costs rising? Join an e-marketplace. Outsource to an application service provider. Sales off? Spiff up your website.
But technology doesn’t always work as advertised. To help quiet the hype, CIO has put together its latest round of Five Uneasy Pieces. These takes offer a more skeptical perspective on a quintet of the hottest tech trends: e-marketplaces, speech recognition, wireless technology, CRM software and even the Web itself. You may not agree with everything our authors have to say, but hopefully their words will help evict some of the hype that’s cluttering your brainpan.
Don’t bother telling your users about the wonders of wireless technologies. Let them tell you. Hear them describe the joys of information independence—the exhilarating freedom of being able to access any information anywhere through the modem-free miracle of PDAs, pagers and cell phones. And then don’t even think about telling these users that IS can’t support their wireless devices. That’s no longer an option.
Wireless technologies guarantee that no conscientious worker will ever escape work completely. Not with cell phones that let conference calls carry over into the commute, not with pagers and PDAs that keep e-mail and Web access within arm’s reach. User resistance? Forget it! Meta Group says that by 2003, half of all businesspeople will use three to four wireless data devices. Gartner Group predicts that by 2005, wireless technologies will attract 1 billion users worldwide. “The heartbeat of the business enterprise has become ’how quickly can you get back to a client’s e-mail or voice mail?’” says Gartner Senior Analyst Phillip Redman. “And that heartbeat is only going to get faster.”
There are several good reasons to doubt whether wireless can attain quick ubiquity, despite its steep growth curve:
Health Concerns Is there really a link between cell phone use and cancer? It’s an issue being decided not just by the medical community, but in the courts as well. A Maryland doctor recently filed an $800 million lawsuit against Motorola and eight other telecommunications companies and groups, charging that his cell phone use caused a malignant brain tumor. Suits such as this one could put a lot of corporate wireless strategies on hold until the issues are settled.
Regulatory Issues Airlines already limit use of wireless devices on aircrafts. Will roadway bans be next? Some U.S. counties have banned outright the use of cell phones while driving, and three states—California, Florida and Massachusetts—limit the use of cell phones in moving vehicles (such as requiring the use of hands-free speaker and microphone systems). Whether such restrictions will gain further momentum is anyone’s guess, but the threat could inhibit companies that are rolling out wireless devices.
Growing Pains Unlike Europe and Asia, where wireless coverage is nearly ubiquitous, the United States still has geographic areas where wireless devices are useless. The best wireless service providers don’t even reach 70 percent of the United States today. Redman says he doesn’t expect that situation to improve anytime soon. Between now and 2005, Redman sees wireless vendors improving their current networks to meet increased demand, but not expanding networks to reach new markets in more remote locations. The other harsh reality for CIOs is integration. To be effective, wireless devices must be integrated with traditional networks and databases, which calls for a whole new set of IT skills and tools. And then there are the security issues, which companies are only starting to deal with today.
Still, even if wireless isn’t quite ready for prime time, it’s the wise CIO who makes the technology a key component of the strategic plan. “CIOs need to start planning for wireless,” Redman says. “Those who wait will be left behind.”
The world is going wireless—regardless of the health concerns. These solutions will be expensive, and some of them won’t work. But the risk of trying and failing is a lot less costly than the risk of doing nothing at all.
A few years ago, a new technology arrived with the promise to drastically increase productivity. Instead of typing, you could simply say, “speech recognition,” to magically make words appear on your screen. Unfortunately, the words that actually appeared were more than likely “please recondition” or “peach desiccation,” than the original phrase. Sloppy translation and endless training sessions were hallmarks of early speech recognition software. But despite such pitfalls, the idea of voice-enabled applications and even a voice-enabled Internet hasn’t lost its allure. And now vendors are recommitting to the task.
Besides the obvious liberation from keyboard tyranny, vendors hope to extend the Internet to telephones and vice versa. And they’ve developed the technology to make it happen. AT&T, IBM, Lucent and Motorola founded the VoiceXML Forum to further a new XML extension that will voice-enable Internet content. Imagine having a computer read your e-mail to you over the phone or the ability to make purchases off a website simply by speaking. Improved processor speed and higher bandwidth means your computer won’t crash or stall when it actually comes time to use the software.
It’s not all sunshine and lollipops in speech recognition land. While vendors have climbed the technical molehills, the mountains remain. The software’s interpretation capabilities while improved are still far from perfect. Throw in the background noise typical to an office and you’ve got yourself a virtual Tower of Babel. But even if vendors compensate for background noise—not to mention the millions of Americans with accents or speech impediments—it still won’t guarantee a speechy future.
Why? Plenty of reasons: It’s too much work. Not only will voice-enabled Internet require more bandwidth than companies have today, but the IT staff will have to customize the dictation application before rolling it out to employees—who you can be sure won’t know how to teach it company-specific jargon. Time equals money, and this will take a lot of time.
Our brains can’t handle a voice-enabled Web. Phone numbers are only seven digits long because that is the maximum amount of information we can store in our short-term memory. Try remembering which of the 8,000 links Yahoo just dictated that you want to follow.
Nobody cares anyway. People will quickly realize it’s easier to read e-mail on their wireless devices than listen to a computer drone over the phone.
Someone will eventually work out the kinks and offer a quality speech recognition product that has realistic applications, but there’s no need to jump on the bandwagon until you’re sure the wheels won’t come off.
Every few months a new world-changing technology occupies the tip of everyone’s tongue. Now intranets, B2B and XML have cleared a seat at the table for e-marketplaces. This latest e-commerce fad is like eBay on steroids.
E-marketplaces match companies with something to sell with companies looking to buy—through an auction, reverse-auction or exchange. But while e-marketplaces promise lower prices, the savings come at the expense of established business relationships—you buy from whomever’s cheapest, not who you know and trust. For companies just looking to save money, however, from whom they save it may not matter.
In a perfect world, e-marketplaces could offer a utopian cybersociety freed from the chains of geography, where companies, motivated only by price, trade without prejudice. A company desperate for an obscure chemical compound might have to pay a fortune to a known trading partner, but through an e-marketplace such as Chemdex, it might find a supplier with a surplus who’s happy to sell for far less.
Too good to be true? E-marketplaces have plenty of believers. Forrester Research, for instance, projects that 53 percent of B2B e-commerce will travel through e-marketplaces by 2004—an estimated $1.4 trillion.
While the pundits are bullish about e-marketplaces, it may not be the kind of bull you want to grab by the horns. The technology is still immature; most e-marketplaces are merely online bulletin boards containing e-mail addresses or someone’s phone number (“For a great price call 555-9876”). Many e-marketplaces’ inability to process transactions themselves means most deals must be completed offline, taking the “e” out of e-commerce.
At the moment, this isn’t a problem for most companies. And while these early movers may think auctions and exchanges are a fine way to procure paper clips and pencils, it may be a while before they purchase business critical—and more expensive—direct materials.
Picking a winner may also prove a problem. Most e-marketplaces haven’t reached liquidity—and most probably never will. The only reason a company would abandon their relationship with a trusted supplier in favor of an e-marketplace is major cost savings. But with so many online markets, and so little differentiation, it’s hard to imagine a single site attracting the critical mass of customers needed for actual savings. And the world certainly doesn’t need 52 food e-marketplaces. Getting hooked into the wrong one now might end up costing you more than you save.
Finally, not every company is ready for e-commerce with their regular suppliers, let alone with anonymous trading partners in e-marketplaces. Just to give you an idea, when a procurement manager for a large oil refinery was asked how he used the Internet for purchasing, he replied that he recently bought a book from Amazon.com. Oops!
E-marketplaces will eventually play a role in your business. How big remains to be seen. Feel free to play the field, but be careful which e-marketplace you get into bed with—it might not be there when you wake up.
How hot is customer relationship management (CRM)? Peoplesoft bought the No. 4 purveyor of CRM software—Vantive—in 1999, and Peoplesoft already gets more revenue from its CRM offering than it does from its flagship human resources software. That should give you some idea.
The area is hot because the promise is big: Know thy customer in a deeper (read: more profitable) way. Depending which vendor you listen to, CRM products analyze customer lifetime profitability and purchasing patterns, identify market segments and opportunities, coordinate customer contact channels, corral sales leads, measure service quality, improve brand loyalty, and turn lead into gold (though that last module costs extra).
Unfortunately for CRM, relationship management is an oxymoron. Customers don’t want to feel “managed” any more than spouses or friends do.
Actually, the biggest problem with CRM software is that customer relationship management isn’t software. CRM is an attempt at codifying “customer first” corporate values, practices and processes. It’s a corporate culture and a priority-setting management discipline. In other words, if you’ve identified the most desirable customer segment on Earth but they still can’t get their e-mails answered, you aren’t doing CRM in a meaningful way. “A lot of people still think CRM is a box of software, and a lot of them are slogging through implementations that won’t do anything for their companies,” because the company hasn’t first taken stock of its customer-facing processes, says David Dobrin, a partner at Benchmarking Partners in Cambridge, Mass.
And even when the processes are examined and revamped, there’s still a mountain of work to climb. Most companies need to reconcile a variety of customer, product and financial legacy databases to get the kind of big-picture customer views that true CRM demands. Worse, customer contacts now stream in through a broad variety of channels: sales personnel, the Web, call centers, e-mail, fax, kiosks and more, and the customer experience must be identical no matter what channel is used. A product or service provider not only must be equally responsive to all those forms of contact, but also has to integrate the customer information that comes in through those myriad ways.
But there is some good news, according to Dobrin. For starters, sales forces have traditionally resisted attempts at automation; CRM vendors, notably market leader Siebel Systems, are moving away from the command-and-control model that made sales folk squirm. Siebel is reworking the software to be less dictatorial (sales staffs sometimes felt that CRM software had a “big brother is watching” taint). Also, CRM is so hot that a great many vendors are working to increase the capabilities of their offerings and to hammer away at the tremendous data and systems integration challenges. Two years ago, Dobrin says, CRM packages were extremely limited in scope, whereas today they show signs of depth. (Some packages let salespeople call in and receive automated sales leads, for instance.) Software packages formerly known as everything from sales-force automation to computer-telephony integration vendors like Nortel [Networks], Lucent [Technologies], Cisco [Systems] and Genesys [Telecommunications Laboratories] are working in CRM today, and the growing interoperability of their offerings means less pipe-fitting work for CIOs.
CRM can be done and can be valuable. But anyone who expects to plug it in, turn it on and reap loyal customers is in for a sad surprise.
The Web as We Know It
Like TV, radio and the printing press before it, the Web has provoked a sea of change in communications. Geographic and geopolitical boundaries have evaporated. An individual in Tokyo with a Pokemon card to sell can market it to millions of potential customers around the globe using just a few mouse clicks. And only a couple years ago, not having a website meant that your company was merely cautious. Lack one now and you’re a relic, something to be stuffed and displayed at the Smithsonian.
Most of the excitement is valid. The Web has set commerce on its ear. Online retailing continues to climb at a fantastic rate. People actually buy computers simply to get online. And recent reports indicate that the Web has even turned the tables on what was formerly a mostly-male venture—more women than men are now online according to a recent Jupiter Communications report. Always eager to go with the flow, corporations are looking for ever-more ways to integrate the Web into their operations, through intranets, sales sites, online marketplaces and—most recently—application service providers who say they can turn the Web into your very own virtual office, freeing IT from having to manage millions of desktop PCs full of applications.
Even as companies clamor to hire legions of freshly graduated art majors and Java programmers at $75,000 a pop, there’s a chance that the Web as we now know it might become a footnote in the history of the Internet.
For instance, take the problem of consistency. Most websites are designed to do only a handful of things: deliver text, provide areas for collaborative discussion or serve as a repository for files, be they program patches, video clips or music samples. Unfortunately, every website is like an application unto itself—with differing interfaces, capabilities and styles. That’s where Napster and its clones come in. It’s possible to imagine a world where users simply pick a Napster-like client (MyCIO.com has one called Rumor, and Intel is investigating similar technology) that delivers the interface and features they like and then connects to fathoms of XML-formatted data sitting in databases around the globe. The need for websites diminishes, and everyone gets their information in a format that suits their needs.
Suddenly, all that fancy formatting, hours of laboring over site designs, screaming matches about whether to support frames or not, and heated arguments over who’s division gets the big GIF on the front page this week go up in smoke—most likely along with a lot of the employees who sit in on those meetings. And Napster-like clients are only the first contenders in what is bound to be a flood of new technologies during the coming years that bend the basic pieces of the Internet to their own ends—ends that may differ greatly from the pick-and-click experience we all enjoy today.
If that sounds scary, it could be. But look on the bright side, if you’re lucky, you’ll never have to pay another entry-level Web designer $80,000 again.
Websites aren’t going away anytime soon—not even close. But the data behind the scenes will rapidly become far more critical than the glitz on the screen.