Restructuring is a watchword for IT in 2005

Restructuring is a watchword for IT in 2005

Madison, Wis. — Information-technology businesses are taking apart their processes and putting them back together. With the Fusion 2005 CEO-CIO Symposium on Wednesday just around the corner, some of the experts watching IT in Wisconsin offered their opinions on how the state and its industries will be shaping their business practices as the year progresses.

Restructuring and rebuilding

According to Matt Miszewski, CIO for the state of Wisconsin, several business deals in 2004 helped to change the makeup of the IT market. For example, SBC is in a bid to purchase former parent AT&T, and a recent agreement IBM signed to sell its personal-computer division to China-based firm Lenovo wound up pushing Hewlett Packard forward to take over some of that customer base.
Miszewski said these changes have all stemmed from companies trying to develop a more efficient infrastructure, which usually takes the form of a push to open standards. He said these standards work on a positive level for both sides, since they are more efficient for the company and give customers a wider range of information.
“Having large-scale players continue to embrace open standards at the cost of proprietary standards is an enormous win for large enterprise customers,” Miszewski said.
Peter Stockhausen, CIO of employment-services firm Manpower, said that “ruinous competition” has helped to eliminate traditional methods of business. He cited the introduction of new technology in the telecommunications market as a turning point. Broadband and Internet telephony (VoIP) have firms to create new tactics and develop new technology, he said.
Rebuilding technology bases may become a more common practice over the next year. Scott Converse, director of technology and innovation programs for the University of Wisconsin-Madison School of Business, said that CIOs have been forced to push back their IT updates since the economic slump of 2000 but will be reacting soon as systems start to become dated.
“Much of the equipment in IT shops is off the books and past due for upgrades and replacement,” Converse said.
Converse predicted that over the year there will be a strong increase in corporate IT investments, rebuilding in the areas of network security, storage, disaster recovery, and desktop PC replacements. For software, companies will likely focus on smaller customized programs and update the investments made in the early part of the decade to counter the possibility of a Y2K crash.

Developing agility and skill

Converse said that the changes in technology and business reflect a move to consolidation in the IT world, as profits through market growth become less obvious. Big companies such as IBM, Microsoft and Oracle will use mergers to tighten arrangements and move faster, creating specialized units in network security and database sectors.
Ed Meachen, CIO at UW-Madison, said that smaller companies and divisions will play a part in the development of business processes the university has been looking at for years. UW-Madison has been trying to put together information systems similar to those in the corporate sector for the past ten years, and Meachen said that higher education has begun to see the return on investment.
He said that over the course of this year, UW-Madison will try to work with smaller companies to help provide them with mobile technology and network applications. He added that it would be important to work toward supplying more bandwidth to Internet users – particularly in rural areas.
“Higher education will play a huge role in next-generation Internet,” Meachen said.
Converse said that while there is growth potential for both large businesses and smaller start-up companies, the growth would likely not be as robust as it was in the late 1990s during the dot-com surge. Because investment capital won’t be as accessible as it was a few years ago, firms will have to tighten their focus and be prepared to grow on their earnings.
Miszewski said the state is prepared to adopt a similar mindset, building off the previous successes of the governor’s job-creation plans and strategies to attract businesses to the state. Wisconsin has been pleased with small firms such as Cape Clear, a Maryland company that supplies the state with Web-services software involved in its integration plans, and the state plans to continue working with similar firms as the year continues.
“If we keep a tight eye on our fiscal situation and continue to make well-planned-out decisions, growth will continue on its upward trajectory,” Miszewski said.

Les Chappell is a staff features writer for WTN and can be contacted at