What is the end result of your corporate technology efforts? Is it a vague tie-in to your companys overall productivity? That connection would be welcome, but it is also one of the hardest to measure. Is it the ability to do more with less? That route too often takes you to the outsourcing door. There is nothing inherently wrong with outsourcing, but if the company president wants to mimic or exceed a competitors new capability, you will find that an entirely outsourced operation severely limits your response. Maybe your current technology efforts have a much more realistic impact. Your investment in technology allows regulatory compliance, which keeps your executives out of jail.
I was thinking about the overall results of technology investments as I drove to PeopleSoft, in Pleasanton, Calif., a week before its annual user conference. On the ride from San Francisco, I was thinking that the PeopleSoft story would be about progress under adversity. After all, heres a company fighting for its corporate life as an independent company after being targeted by Oracles Larry Ellison for takeover. While that story will remain until the takeover issue is resolved one way or another, I think PeopleSofts story is well-aligned with the direction of corporate technology integration over the next year. Come to think of it, maybe that is what has made PeopleSoft such a tempting target.
And come to think of it, integration— this time with IBMs WebSphere—is the driving force behind the $1 billion agreement announced last week between PeopleSoft and IBM. A much deeper integration may be on the table if IBM does a white-knight rescue of PeopleSoft.
The integration of a companys operations has been long promoted by technology companies. In the past, the difference was in the definition of integration, which too often meant a proprietary tie-in to a vendor. And once tied in, it was very difficult to get untied. This time around, integration is still king, but the key difference is that the push for that integration is coming from users.
Corporate CIOs are under tremendous pressure right now to come up with architectures that are secure, flexible and able to meet government and regulatory requirements. Security of people, places and data can be assured only by broad, integrated systems with a simple interface that can alert a user when someone or some process is breaching the system. Security systems in buildings were rarely designed to work with employee personnel systems or data control systems, but those are the types of integrated systems now required.
The regulatory framework, led in large part by Sarbanes-Oxley requirements, calls for an integration of accounting and financial applications that has been a rarity in the past.
Renee Lorton, vice president and general manager of PeopleSoft financial management, noted in a discussion that the march to compliance has forced companies to finally sort out their myriad systems. That sorting out is at times frustrating, time-consuming and expensive. The benefit is that companies finally complete something that should have been completed earlier. That benefit may seem a long way away for companies in the midst of racing to make the Sarbanes-Oxley compliance deadlines, but smarter companies will be planning what new applications can be built on the merged processes.
And that is why the push to integrated applications and technology architectures will have legs this time around. Security requirements will only get tighter as governments start to impose stringent, audited laws for companies that want to engage in the government sector. Regulatory requirements will become stricter and international in scope as users and shareholders demand the kind of financial transparency geared to keeping companies honest and forthright. The productivity promises of service-oriented architectures can be built only on truly integrated platforms that are free from hidden proprietary hooks.
The result of your corporate technology efforts is an architecture that can adapt to change and meet your corporations needs. The difference this time is that you need to be the one driving the integration.
Editor in Chief Eric Lundquist can be reached at [email protected].