Yet the events of September 11 showed just how fast companies may need to adjust their spending.
“Previously enterprises looked at spending on business continuity and disaster recovery as dead investments,” says Atul Rege, Ph.D., a consultant in the IT Security Group of Mahindra-British Telecom in Mumbai (formerly Bombay), India. “Now multi-nationals are starting to store back-ups off-site and conducting regular drills for systems they have in place.” Partnering with DRI International, the Indian telecoms giant has seen demand for security services take off, the more so after the December 13 terrorist attack on the Indian parliament. Despite the slowness of size, the lumbering giants have the most to lose from not thinking quickly on their feet.
Aligning IT Spending with Business Goals
Of course, technology leadership only comes with the support of the CEO, says John Hollier, vice president of IT for PDI Inc., a commercial partner to the pharmaceutical, biotechnology and medical devices and diagnostics industries located in Upper Saddle River, N.J. Hollier attributes his company’s place among Fortune’s 100 Fastest Growing Companies at least in part to “our CEO being the biggest tech advocate in the entire organization.”
Yet that kind of leadership also comes at a price. For one thing, PDI will show heavy revenue losses due to cash outlays it made last year. Strategy-wise, the company is on track, says Hollier, but Wall Street may judge otherwise. “Our attitude is that now is not the time to change course, but to continue to execute against the goals we set for ourselves.” In short, that means moving beyond selling drugs to doctors -a marketplace that is quickly becoming saturated- toward offering comprehensive sales and marketing solutions for products at any stage of their lifecycle.
In order to achieve PDI’s business goals, Hollier’s IT department must constantly innovate even as its budget remains flat. His first move since joining the company last year: tighten processes within his own IT organization. “We’ve matured over the last year from an IT organization that accepted what anybody said we needed to do, to an organization focused on major business initiatives.” In order of priority, Hollier plans to focus in 2002 on: CRM and sales force automation; business intelligence; and reducing costs in finance and HR.
The focus on those three technologies comes after a period of rapid growth for the company. PDI had grown from 700 sales reps in 1998 to 3,700 this year, and had expanded its operations to include not only selling drugs to doctors but to offering comprehensive sales and marketing solutions for products at any stage of their lifecycle. The company already had a reputation among customers and competitors for being nimble: it could recruit, train, hire and put 500 sales reps in the field within nine weeks of signing a contract. Next year, it will roll out a Siebel sales automation platform and test it among 1,500 reps in the field.
Hollier does not reveal exact projections but expects the upgrade to have a payoff for every aspect of his business “from making better deals up front all the way to tweaking our marketing plans to improving market share.” Hollier hopes the technology will buttress his company’s ultimate business goal: to change the way pharmaceutical, biotechnology, and medical devices and diagnostics companies manage their portfolios by offering innovative, alternative solutions.
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Hooked on Phonics
The majority of CIOs polled by Morgan Stanley expect the economy to improve by the second quarter 2002. In the meantime, CIOs must prove their value in good times and bad. “The CIO must be seen as a driver of change,” says Rubin. That may require smarter forecasting, deeper and more frequent analysis and doing more with less. Yet ultimately the CIO’s mandate remains unchanged – improve operational efficiency while leveraging technology to drive business growth.
Eva Marer is a freelance business and technology reporter based in New York. She covers investments, personal finance and corporate technology issues for a variety of trade and consumer magazines. Contact her at [email protected].