UK: A time of turmoil in information technology. (2 of 2)

UK: A time of turmoil in information technology. (2 of 2) - The UK's economic slowdown adds to the uncertainty. Organisations are reassessing their priorities, says Price Waterhouse consultant Nick Cherrie, and if they are not convinced that a project ca

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Last Updated: 31 Aug 2010

The UK's economic slowdown adds to the uncertainty. Organisations are reassessing their priorities, says Price Waterhouse consultant Nick Cherrie, and if they are not convinced that a project can offer a quantifiable and speedy payback, they are likely to shelve it. The types of project that are delayed will vary from industry to industry. But, in general, they include systems for design, production control, distribution, electronic data interchange and so on.

While the Price Waterhouse review shows that all countries are planning to increase their investment in these competitive edge systems over the next five years, the UK's present level of spending (as a percentage of the total) is behind that in the US and Japan, as it was five years ago. Price Waterhouse believes that in the mid-1990s the UK will have stolen a marginal lead on the US but still be a considerable way behind Japan.

It is not, stresses Roger Pavitt, that the UK has abruptly ceased to invest in computer hardware and software in the current recession; it is rather that companies which invest prudently - for example, in a better accounts receivable system to improve their cash flow - are likely to outweigh the number of competitive advantage go-getters.

A report published by consultancy AT Kearney late last year showed that the success or failure of information technology applications does not depend on the absolute level of investment. Indeed, it indicated that the companies deemed by Kearney to be unsuccessful users of information technology were investing at a higher rate than the successful ones. Successful users comprised only 11% of the total.

When the economy picks up, some of management's uncertainties will disappear. But the technological complexities of open systems today and of some other system in the near future will not. Organisations will need to be technologically aware.

Cherrie advises against leading edge technology and even with what is regarded as a technological winner he recommends a trial run. Only a pilot project, he insists, will determine whether or not the technology lives up to the supplier's promises.

(Di Palframan is a freelance journalist.)

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