Business and technology have a rocky marriage

October 18 2001 - A Towers Perrin study finds that two thirds of companies will maintain their Web technology investments despite economic uncertainty, disappointing results and pressures to contain costs.

Towers Perrin's inaugural e-Track survey was conducted during the summer when the economy was slowing. Fewere than a quarter of the survey's respondents said that their business would reduce investment - especially in those areas where online technologies could produce direct improvements in efficiency or cost-savings. Most commonly, the areas for increasing investment were people-related activities - particularly recruitment and training.

Many respondents feel that the Internet is revolutionizing business:

- 20% agreed that was a 'transformational event'
- and another 48% said the Internet would significantly change business practices and processes.
- no respondents agreed with the statement that changes associated with the Internet were more hype than reality
- but most respondents had not yet achieved desired results expected from Web technologies.

"Many companies have learned the hard way that merely embracing new technologies is not enough to guarantee results," said Minaz Lalani, leader of the Canadian e-Business group at Towers Perrin. "It takes more than infatuation to make a successful marriage. It takes a clear, comprehensive and well-executed implementation plan to fully realize the potential of Web technology."

In fact, a mere 15% of respondents said that their organizations had fully met expectations from Web technology. Just 4% felt that Web-based HR activities had fully met expectations.

But 44% that expectations had been partiall met overall - and 45% gave the same response for HR specific applications.

The survey found that the belief that organizations fail to achieve results from technology because employees resist change was more myth than reality. Just 19% of respondents said that employee resistance was a barrier to achieving desired results from Web implementation. Instead, respondents said that the biggest barriers were institutional, giving insufficient of the following to implementation:

- priority
- budget
- know-how.

72% of the people surveyed felt that the greatest obstacle to success was that other business priorities took priority over Web technology implementation. 62% picked insufficient budgets to complete the work as a significant barrier and the same percentage cited inadequate internal resources and skills as other major barriers.

"The survey suggests that organizations have not been stacking the odds in favour of success," said Lalani. "Many of the factors for successful Web implementation are within management's control, such as putting sufficient priority, resources, people, time and money behind implementation. The good news is that these obstacles can easily be overcome - if companies are really committed to seeing results."

"The companies that will generate maximum benefit from Web technologies will be those companies that do more than provide their employees with Web tools. The winners will be those firms that help their employees learn to manage their time and use the tools to maintain work/life balance," said Lalani.

Given an open choice of important strategic objectives:

- 97% of respondents cited operational efficiency
- 95% stated that attracting and retaining top talent was very important
- 92% cited cost control
- becoming an employer of choice was cited by 91%.

- But pinned down to just three priorities, respondents cited innovation, cost reduction and operational efficiency.

"While uncertainty about the economic future is even greater since the September 11 attacks, technology will likely remain a key component of many companies' strategy to keep performance and innovation levels high while lowering operational costs," said Lalani.

The Towers Perrin survey was conducted across the Internet prior to the events of September 11, 2001. It involved 233 executives throughout North America, mostly from human resources (56%), information technology (12%) and finance (10%) areas.

Technology "Phase Two"

A major conclusion of the survey is that businesses are going through two phases in the adoption of Web technology. In phase one most businesses used the technology mainly to share information with employees or customers. 81% of respondents said that their organizations were using the Web for internal communication and sharing information with employees. 79% also said that the technology was used for marketing and promotion. And those companies not using the Web for these purposes indicated that they had plans to use it as a communication channel soon.

Phase two seems to be interactive and transaction-oriented. Respondents said that the most significant growth areas of corporate Web use in the future would be:

- creating a vehicle for employees to transact HR services (38%)
- automating and streamlining operations (28%)
- managing customer relationships (23%)

Intriguingly, from a HR perspective, the two areas of key investment in technology appear to be on-line recruiting and on-line learning.

But the survey indicates that the increase in Web technology places a greater burden on employees. 84% of respondents agree that a 24/7 work environment is creating stress for employees and managers which can impact on work performance. Also 71% of respondents feel that job performance sometimes suffers because of information overload.