Top Ten Technology Trends

By Doug Wiescinski

State of the Industry
Universal Advisor, 2004 Issue No. 1

It’s no secret that the economy continues to struggle. The market for information technology (IT) products and services is way down, and growth in most areas is nonexistent. Gone are the days of Y2K and the dot.coms, which brought inordinately inflated growth and profitability to IT companies. The market today is, at best, experiencing modest growth.

Although the market at large is flat, some industry segments have continued to prosper despite the current economic climate — namely the financial service, insurance, and health care industries, which have continued to spend on technology. Why these particular industries? Because they’ve been driven by industry regulations and stiff competition. For example, the Health Insurance Portability and Accountability Act (HIPAA) has had a tremendous impact on health care and, more recently, ancillary impacts on higher education and county government; the Gramm- Leach-Bliley Act (GLBA) has had direct impact on financial institutions and residual impact on auto dealers, retailers, and any organization that features credit processing; and Sarbanes Oxley has begun to affect all publicly traded organizations. This trend will continue well into 2004, as new guidelines are introduced.

But that’s just the tip of the iceberg. There are a variety of technology trends that are also affecting the day-to-day operations of our businesses.

What Are They?

The following IT trends are affecting and will continue to affect organizations in the coming months:

1. An increased need for security. Security is more important than ever. Web-based transactions have increased, and more organizations allow remote processing and have multi-location dependencies. Because organizations are increasingly exposing their information systems to outsiders, the need for security has increased tremendously. Are you prepared for a hacker attack? (See related article on page 8.)

2. Disaster planning. Since 9/11, people have become more acutely aware of the need for disaster planning; this was further epitomized in the Northeast by last year’s blackout. As businesses have become more 24/7-oriented, the need for uninterrupted processing has increased; so, subsequently, has the need for a disaster recovery plan. (See related article on page 18.)

3. Business intelligence. Business intelligence allows management to extract data from a variety of sources and, using the appropriate technology tools and databases, present that data in a more meaningful way. For example, sales statistics are valuable; however, looking at sales statistics relative to geographic regions depicted on a map may be more valuable. Business intelligence tools facilitate better business decision making.

4. Enterprise portals. More and more, organizations are allowing customers (and, in some cases, suppliers) access to stratified information that expedites communication and increases productivity. In short, they’re creating “portals” through which business partners and staff can gain access to their collective knowledge.

5. Business exchange technology. Standards have been developed that allow various disparate systems to exchange information. This has been punctuated by the volume of data sharing going on through the Internet. Standards like XML and XBRL, industry-specific standards, and standards for electronic data interchange are, using the Web as a vehicle to share data, allowing for a more elegant and seamless integration between applications, systems, and business partners.

6. Wireless technologies. This has been a trend for a couple of years, but it keeps gaining ground. Wireless technology allows organizations voice and data transference anywhere, any time. While wireless clearly increases productivity and responsiveness, it creates certain challenges for technical support and security.

7. Convergence. Convergence is the addition of features to certain technologies that previously provided a singular function. For example, cell phones were initially exclusively voice devices. Today they transmit images, connect to the Web, and have features of many PDAs. This convergence makes it increasingly difficult to find the most appropriate business tool when there are a number of devices (and manufacturers) providing solutions.

8. Communication industry consolidation. Pressure continues to mount against established telephone companies, as cable companies continue to increase their presence, cellular providers erode the wire line subscriber base, and the Internet changes the way we communicate. And poised to further complicate matters for the carriers over the next several years: Voice over IP. The communication industry is capital-intensive and principally composed of large companies. Only the strong and well-positioned telecom companies will be candidates to survive; however, they will need to carefully negotiate significant change and investment in their business in order to do so. You will need to weigh your options carefully.

9. Technology talent. Historically, qualified technology talent was hard to find; today, escalating unemployment, utilization of offshore and outsource service providers, vendor consolidation, corporate mergers, and budget cuts have flooded the job market with skilled, experienced technology professionals. Many organizations are taking advantage of the available labor and initiating projects that just a few years ago were deemed too difficult to conduct.

10. Mobility. More and more, you don’t have to be at work to access corporate information. Employees can access information from home or offsite via e-mail, notebook computers, PDAs, or from any computer, anytime, anyplace, given Internet access. Are you prepared to accommodate the demand for anytime/anywhere system access?

So What…?

So what do these trends mean to you? Should you adopt a formal plan to address each trend? No. Should you, at a minimum, consider their relevance to your organization? Absolutely.

No one is going to argue that adequate information security is crucial for all organizations. It’s a no-brainer; just as you lock up your office when you leave your place of business, your information systems must likewise be protected against intruders. But maybe you don’t feel that enterprise portals have any relevance to your organization; why worry about something that seemingly has no impact? Perhaps your competitors are implementing a portal. They considered it, they’re implementing it, and now they have a competitive advantage. How will you respond?

Each of these trends will impact organizations in very different ways, but all will affect day-to-day business operations in the near future. And although the economy remains stagnant, the fact remains that all companies must have technology to survive. To that end, a recent survey of chief information officers by CIO magazine is optimistic: IT spending is anticipated to increase by 6 percent in 2004. Pretty good news in such a tough economy.