What you need to know about the top 2007 IT challenges
By Staff -- Manufacturing Business Technology, 2/1/2007 7:00:00 AM
Butler Group, a U.K.-based unit of Datamonitor, offers advice on current, emerging, and future technology matters—and their impact on business. As such, Datamonitor was at the ready in January with its list of the top IT challenges for 2007:
Tag turnabout
RFID tags will be used on products rather than on pallets and containers, according to the Butler Group report. "RFID is revolutionizing the way products are manufactured, tracked, bought, and sold," says Senior Analyst Teresa Jones. "[This year], RFID tags will start to be used at the product or item level rather than on pallets and containers. Packaging this technology into applications will enable faster deployment, and will be a significant area of investment for applications vendors during 2007."
Looking offshore
Companies will look to remote management delivered from offshore locations in a bid to cut costs. "Few organizations will consider going back to lengthy, single-supplier outsourcing deals," says Butler Analyst Alan Rodger.
Roger adds that agreements reaching the renewal stage "will reinforce the trend toward deals of shorter duration, regular reviews of objectives, and involvement of multiple vendors that are turning successful outcomes in outsourcing engagements into moving targets that can only be achieved by ever-closer partnerships."
Investments in technology transformation such as consolidation—as well as advanced management capabilities—are said to be strong drivers towards this type of service.
Betting on Microsoft
Butler predicts that while Microsoft will be disappointed with the number of enterprise deployments of its next-generation Windows Vista and Microsoft Office 2007, adoption for SharePoint-based solutions will hit a high point.
"Microsoft's apparent commoditization of the enterprise content management [ECM] market could well start a price war amongst established vendors as they try to upsell and compete with Microsoft," says Richard Edwards, a senior research analyst. "Those vendors with large ECM portfolios will consider discounting their document management and records management modules in the hope of securing more business."
Power up
Meanwhile, power efficiency will be "firmly under the spotlight," says the 2007 report.
"Improvements in many areas of the IT infrastructure—better processor performance, higher levels of throughput, and greater disk densities, to name but three—led to a general acceptance that everything is getting better, faster, and more efficient," says Mike Thompson, group business process management practice director for Butler. "There is, however, one area where efficiency is lagging, and that is power performance."
This, Thompson adds, leads to concern about the cost of maintaining the IT infrastructure, "especially in data centers that can have a power efficiency level as low as 70 percent."
SOA's holdup
Meanwhile, Legacy ERP and methodology confusion may hold back the progress of service-oriented architecture (SOA), says the report.
"Genuine business needs will drive the upgrade cycle, and this must be met by delivering new functionality—not dressing old applications in new clothes," says Butler's Jones. "Although SOA is seen as an essential construct for enterprise applications by the majority of vendors, it will take a number of years for the market to catch up."
Hop on the bus
Measuring the business value of IT will be judged by both the CIO and CEO, the report concludes, adding that enterprise service bus (ESB) will start to "commoditize."
"There are more vendors than the [ESB] market will be able to support in the long term, and this will result in price pressure," says the report. "At the same time, open-source products offering ESB functionality will move revenue away from upfront license revenue toward periodic maintenance fees."
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