New Ideas for the New Year

By Larry Dignan  |  Posted 2004-12-01 Email Print this article Print

Need to boost the bottom line and cut costs? Here are some ways to do both.

You're finalizing your 2005 technology budget. Your mandate: Grow the business, make a difference and, oh, by the way, cut costs in the process.

What should be on your to-do list? Here are three ideas, culled from interviews with executives from communications company MCI, technology provider Siemens Business Services and printing firm Bowne & Co.

Idea 1: Make Web services work.

This sounds like a throwback to the late 1990s, when vendors were pitching Web mechanisms for automating processes between companies. The technology is now commonplace, but connecting with partners is easier said than done. Just ask Elizabeth Hackenson, MCI's chief information officer.

Implementing Web services was on Hackenson's 2004 to-do list, but the effort didn't pan out. Her plan: link MCI systems with big customers such as Electronic Data Systems, to automate the handling of trouble tickets. Meetings to map processes, a couple of conference calls to coordinate, and some programming effort were all that was needed. Right?

Wrong. "It was frustrating," Hackenson says. "Customers wanted to enable application-to-application coordination, but it diverted time and resources from their operating budget. It just didn't get done."

Her fix? Create six-person strike teams to do the work for the customer, mostly on MCI's dime. The troops will consist of business analysts, programmers and MCI-hired consultants from Accenture and EDS. The effort could save MCI "millions, potentially tens of millions" of dollars, she says.

Bottom line: Connect with your partners—but you may have to foot the bill.

Idea 2: Test sending voice calls, securely, over Internet protocols.

Gerhard Cerny is CIO of Siemens Business Services, which provides information-technology services both to clients and Siemens itself. He says the German electronics manufacturer plans numerous tests of technology that uses Internet protocols to transmit voice communications. Siemens had better get the pilot runs right; 0ne of the company's promising growth areas is selling voice-over-IP equipment.

Cerny is optimistic about VoIP, but not euphoric. Why? Security. Or the lack of it.

When the handsets are on the same campus network—closed to the public—there's no issue. But when you punch through the firewall on one campus, use the Internet to make a call and reach the other side, a bevy of problems can emerge. When data and voice networks are intertwined, a hacker could use the voice connection to send in probes, viruses or worms. "That call could be an entry point,'' Cerny says.

Bottom line: Separate voice and data networks. Use a firewall specifically designed for VoIP communications. Authenticate callers.

Idea 3: Shop for game-breaking technology.

If you're like Ruth Harenchar, Bowne & Co.'s CIO, you haven't had the chance to seriously examine new technologies for years. In Harenchar's case, she might want to use biometrics to restrict access to the confidential financial documents her company prints. She might investigate new collaboration tools to speed the publication of documents as customers race to comply with Sarbanes-Oxley reporting requirements.

Bowne's financial printing unit, which accounts for 55% of the company's $1.06 billion in annual sales, wants Harenchar's team to create new services modeled on its 8-K Express. This application advises companies of possible errors in their 8-K reports, which cover acquisitions and other material corporate changes, and then speeds the accurate filings electronically to the Securities and Exchange Commission.

Bowne had protected its bottom line by cutting costs, when sales declined from $1.18 billion in 2000 to $1.06 billion last year. But more cost-cutting won't grow the company.

Bottom line: Start kicking the technology tires. Find your company's next big thing.

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters