Summary of META Group’s Weekly Research Meeting

Fat and flat: Network services grow during consolidation
The increasing affordability and stability of wide-area networks (WANs) are enabling data centre centralisation, reducing total IT costs while improving consistency throughout the enterprise. However, consolidation affects network design, disaster recovery, sourcing, staffing, optimisation, and budgets. Centralised data centre services will flatten networks as designers eliminate hops to support more efficient interactive applications directly between locations. This new architecture will be especially problematic for networking organisations that have a regionalised or hierarchical structure. Increased bandwidth consumption and disaster recovery costs will more than offset unit price reductions, resulting in a net WAN service expense increase during 2002/03.

Bottom Line: Distributed organisations attempting data centre consolidation must consider restructuring their network architecture, disaster recovery, sourcing, optimisation, and staffing strategies.

Human capital management: Doing more with less
Recent META Group research indicates IT organisations (ITOs) are no longer immune to recession layoffs. During the past 6-9 months, about 75 percent of Global 2000 companies have frozen IT hiring, and some have cut IT staff (salary growth has also slowed/stagnated). This occurred despite largely unchanged business service-level expectations and disproportionately small cutbacks in ITOs’ overall workload. Nonetheless, users must maintain a labour-shortage mindset (especially for the ‘best and brightest’) and maintain/enhance their strategic investment in human capital and skill retention practices to ensure an effective response to an eventual economic turnaround.

Bottom Line: Users should view the current recession as an opportunity to proactively deploy best-of-breed human capital management practices in anticipation of future renewed labour constraints.

Supply chains: Seeing is believing

During 2001, supply chain visibility (SCV) surfaced, and more than 20 vendors now claim SCV products (we believe 3-4 will remain by 2005/06). Although architectures are similar, no single product addresses all visibility forms (e.g. order, inventory, manufacturing, transportation), and it will be several years before applications span multiple supply chain processes. Through 2003, heterogeneous systems environments will favour best-in-class SCV vendors that offer specialised domain and integration expertise (e.g., SeeCommerce, Vigilance and Verilytics). By 2004/05, value will be maximised when SCV moves beyond alerting, and provides discrepancy notification, event-based re-planning, and transaction execution, which will favour established supply chain/ERP vendors (e.g., SAP, Oracle, i2, Manugistics).

Bottom Line: Buyers will benefit from fierce competition among supply chain visibility vendors; however, they must use caution in selecting solutions and focus on areas with the greatest short-term need.

Portal evaluation process: More than just pretty features
A proper portal evaluation should occur only after project ownership has been established, business drivers/benefits have been analysed, features have been categorised, and an infrastructure and operations impact assessment has been performed. The evaluation should begin by creating a vendor shortlist through market segmentation, eliminating vendors that do not meet core architectural criteria (e.g. determined by each organisation’s architecture group). Best-practice evaluations include business, technical, architectural, and due-diligence rating categories. Although most portal evaluations were based on functional requirements in 2001, architectural fit and business requirements will be prime considerations in 2002/03.

Bottom Line: As portals become a critical consolidation point for applications, business benefits will become the most important evaluation factor, and rating portal vendors on common functionality requirements will become secondary.

For more information contact Sriram.Ramamoorthy @metagroup.com