Has IT forged a resilient economy?
Roberto Michel, editor -- Manufacturing Business Technology, 4/1/2002 12:00:00 AM
The economic signals are trending toward recovery. The Institute for Supply Management's monthly index for February indicated renewed industrial growth, with inventories on the decline and orders on the rise. Additionally, U.S. Dept. of Commerce figures on business inventories—mainly finished goods held by retailers—rose in January, indicating retailers, equipment dealers, and others are gearing up for healthy sales.
These positive signs have some experts saying the recent recession is all but over. It also has some experts crediting information technology (IT) with helping turn the economy around. This conclusion is true enough. Just like IT helped fuel the prosperity of the late 1990s, there's little doubt that it has helped overcome recession. If the recovery continues, IT, along with the Fed's persistent interest-rate cuts and decisive corporate cost-cutting, will get credit for making the recession of 2001 a mild one.
On the other hand, U.S. companies—and the economy—are still a long way from realizing the full potential of collaborative systems.
Consider the type of IT investments adopted to date. Today, nearly every business relies on PCs and networks to automate the lives and tasks of office workers. Client/server business management software systems do much to automate key business processes, while leveraging the power of the PC. This level of widespread IT adoption acts as a turbocharger on the economy, allowing businesses to be more productive with fewer resources. But the big gains—in terms of a more nimble, reflexive economy—will come from adoption of new generations of collaborative supply chain and manufacturing applications.
The numbers bear out how far we have to go. Analyst firm AMR Research's 2001 study on application spending and penetration found that only 38 percent of companies surveyed had implemented supply chain management applications. While another 23 percent of companies told AMR they planned to install supply chain solutions this year, the data suggests that deployment of newer collaborative applications is not widespread.
Further adoption of such applications will lead to a more nimble economy. And while new applications will keep managers better informed, Web-based collaborative apps, real-time information, alerts, and analytical tools still require strategy and decision-making from managers. When the majority of U.S. companies have implemented these technologies, and put in place the strategies and metrics needed to get the most from these solutions, then we will have an economy that, if not recession-proof, will be able to bounce back even more quickly than it did this time.
Getting to this stage won't be easy. It will take evaluation, deployment, and management exploitation of a new generation of collaborative systems.
