The Cost Analysis for Innovation

Tech Ed panelists aim to elevate technology's place in enterprise.

At Microsoft Corp.s annual , held recently in Dallas, the heat was on Microsofts admission (and explanation) that shipment dates had slipped for the anticipated Jupiter suite of e-commerce products; the next-generation SQL Server, code-named Yukon; and Exchange Server 2003.

The focus, however, was on whether the cycle of innovation within IT has ended and if IT should be managed as a cost.

Whats new in Microsoft Exchange Server upgrade

Exchange Server 2003

  • Release Candidate 1 available now; final ship date not specified
  • Improved upgrade and deployment tools
  • New Active Directory Connector wizard eases migration from Exchange 5.5
  • Better scalability, with support for eight-node clustering
  • Privacy enhancements to reduce spam
The IT managers whom eWEEK Labs spoke with at Tech Ed were looking at the big picture. And they were asking questions that demonstrate ITs strategic position at their organizations: Are forthcoming products in line with corporate strategy and direction? Will the projects we launch deliver value and speed to market? Can we lower costs while providing better services?

IT managers wanted to make sure the technology they choose provides steppingstones to their organizations success, not stumbling blocks that lead to failure.

At a Tech Ed customer panel, a cross section of industry players from financial services to health care were invited to provide their thoughts on the role of IT within enterprises today and whether it should continue to play a strategic role or be managed as a commodity.

Panelist Nathan Hanks, managing director of technology at Continental Airlines Inc., said his strategy is to use technology to reap fractional savings. The plan is not new, but it has proved to be a successful implementation of a long-term strategy at the Houston-based company.

Customer self-service options provided through Continentals Web site and self-check-in kiosks at airports have added up to real productivity savings, Hanks said.

"Our costs are labor and fuel, and we have no control over fuel," Hanks said. "We use technology in incremental steps to lower labor costs and drive those productivity gains. Thats how IT plays a strategic role."

Using technology for competitive advantage is certainly how most IT organizations are proving theyre not just a commodity. For example, Gafar Lawal, a director of architecture at Merrill Lynch & Co. Inc., said the New York company has focused on building online client applications that enable it to compete aggressively. "Weve been reassessing the way we deliver our IT to the business, and we continue to deliver value," Lawal said during the customer panel at Tech Ed. "To say IT is a commodity is a shallow misuse of a trend in the industry."

One way Lawal is lowering costs is by standardizing on technologies and platforms. His group, which is responsible for developing the Web services integration framework for Merrill Lynch, chose Microsofts .Net Framework over Sun Microsystems Inc.s Java 2 Platform, Enterprise Edition. Why? Because it was not cost-effective to ask his 24 Visual Basic developers to learn new skills, he said.

One things for sure: IT departments that offer solutions and give an enterprise faster time-to-market capabilities play a strategic role and should be recognized as such. Those that dont deserve to be commoditized.

eWEEK Labs Senior Writer Anne Chen is at anne_chen