How Globalization Can Work for I.T.By Michael Vizard | Posted 2006-05-06 Email Print
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Global expansion can often justify much-needed upgrades.
When you visit a small- to-medium-size enterprise, you can't help but be struck by how much time and energy is sucked away by the seemingly never-ending battle just to hold things together using safety pins, rubber bands and baling wire.
Every information-technology person in this type of situation knows that these companies are spending more money holding things together than if they just upgraded applications and modernized systems, but for some reason inertia always seems to carry the day. This happens because the costs of keeping older applications going is usually invisible to the business executives who fund them, while the capital costs associated with modernizing systems are all too visible. Business executives can see the thousands of dollars associated with a new server, but not the payroll dollars associated with all the extra personnel needed to keep older servers running antiquated applications that have become a drain on productivity.
About the only way to fundamentally alter this equation is to tightly attach I.T. to a business issue that, like a bill working its way through Congress, is so popular that few people will question any of the associated riders to that bill. For example, the massive concern over Year 2000 compliance created the perfect business steamroller to justify all manner of system and application upgrades. But it's been six years since that type of event, and since then many I.T. organizations have been wringing more dollars out of antiquated technology infrastructure than at any time in recent memory.
Fortunately, there is a new macro business issue starting to take hold across all levels of the enterprise that is driving demand for revamped applications, which naturally have to run on more powerful servers and faster networks. That business issue is the globalization of the economy, which is finally beginning to affect businesses of all types and stripes.
For example, luggage maker Tumi recently upgraded its enterprise applications to mySAP All-in-One as part of an effort to support a rapidly expanding global brand. Under the guidance of Jim Walsh, vice president of information technology, Tumi left behind an antiquated custom application in favor of a suite of applications that are not only less costly to support, but also integrated the company's business processes in a way that provides management with more visibility into the business as a whole.
Similarly, Rosenthal USA, the U.S. arm of a German company, found itself required by its parent to tie into an SAP system. To accomplish this, Rosenthal USA chose SAP's Business One offering for the mid-market, which in turn drove an upgrade cycle.
The business benefits to going global are pretty clear to just about every business executive on the planet. So suddenly, people in the executive suite don't look at you quite so blankly when you explain to them that the company will need new applications and infrastructure to accomplish that task. In fact, they more than likely will look at you as if you said something that is obvious to the point of insulting.
But for I.T. people in the small- to medium-size enterprise space struggling with globalization, there are two distinct vendor camps trying to gain their allegiance. The first is represented by SAP and Oracle, which each makes a convincing case for adopting their suite because of the advantages of having a highly integrated set of applications. Another camp, however, led mostly by Microsoft and Sage Software, would argue that re-inventing your business processes and trying to master new applications is counter-productive when you can more easily integrate the applications people already know using new application server platforms.
Whichever path your company embarks on, the issues that will be faced on both the business side and the I.T. side are not for the faint of heart. But the upside is that rather than merely trying to hold legacy systems together, you might actually be helping to move the business forward. For I.T. people, there's no better position to be in because once you achieve that, people tend to stop looking at you like you're the head of a cost center and instead see you as an ally in the daily battle to gain share in a global market. And for any I.T. manager worth his salt, that's priceless.
Michael Vizard is editorial director at ziff davis media's enterprise technology group. He can be reached at email@example.com