CIO casts a sceptical eye on some of the most talked about tech trends.
- Learn why biometrics is still years away from widespread use. - Find out what business process outsourcing really means. - Determine whether collaboration tools are worth the effort. - Discover how a computing grid may fit into your future. - See why open-source software is gaining respect - but slowly.
It's amazing how the message never changes. Economy good? Buy more tech! Economy bad? Buy more tech! The sales tactics change a bit when budgets get tight, of course. But you can bet that a bevy of tech vendors is dying for a chance to show you their latest low-cost, high-value point solution that practically guarantees an instantaneous return on investment and lower total cost of ownership.
And that means it's a good time to revive CIO's Five Uneasy Pieces. Here we round up a quintet of hyped technologies and give you the low-down on the problems, how the vendors hope to solve them and the facts behind the fiction. Whether you're contemplating biometrics, business process outsourcing, collaboration tools, grid computing or open-source software, we have some insights to share.
1 BIOMETRICS - Security at Your Fingertips.
CIOs realise that passwords are not enough to insulate their networks from hacks. Passwords suffer from two significant problems: interlopers can easily guess them, and users frequently forget them. And studies show that providing the support necessary to get new passwords to absent-minded users costs as much as $US300 per year per employee.
Enter biometrics. Both the media and vendors have been showering this up-and-coming $US119 million market - which consists of face, voice, fingerprint, hand and eye recognition systems - with oceans of attention, according to IDC (US). And unlike a password or keycard, users never forget their fingers, voices or eyeballs.
Despite the hype, Earl Perkins, an analyst with Meta Group (US), says it will take at least another four years before biometric security solutions become mainstream.
"If you want millions of people using biometrics, all of the hardware manufacturers and all of the software developers have to agree on a specific programming interface. They've been working on a biometric [programming interface] for two years and are nowhere near agreement," says Perkins.
But the biggest challenge to biometrics becoming the mainstay of enterprise security is also the biggest headache for CIOs: the logistics and cost of putting a biometric solution on every desktop and laptop in the company.
"You have to recognise that having an IT person install the hardware and the software on a broad scale gets to be very expensive," says Chris Christiansen, program vice president of Internet infrastructure and security software at IDC.
And while biometrics has been in development for US and European governments for more than 20 years, it's still not perfect. Some systems are still difficult for humans to use, and they're subject to error.
While substantial challenges remain, some organisations are successfully using biometrics to crack down on fraud and safeguard sensitive information. For example, two non-profit hospitals in Washington, DC (EMC Medical and MedStar Health), use iris scanning technology from Iridian Technologies to control access to patient data and restricted areas of the hospital.
"Since we put in our current system back in September, I have not seen a false rejection on anyone," says Craig Feied, director of informatics for emergency services at EMC Medical and MedStar Health. "The last thing we want is a security model that prevents patients from getting the care they need," he says. - Meridith Levinson
2 BUSINESS PROCESS OUTSOURCING - Take My Process, Please.
You've got a load of noncore processes that you'd love to never hear about ever again. A plethora of vendors and consultants who are billing themselves as business process outsourcers are eager to help.
If your core business is developing the most irresistible stuffed animal on the market, for example, why waste time and resources on such tangential activities as accounts-receivable processing or warehouse administration? You need them done, but it might make more sense to let an expert handle the tasks. Business process outsourcing (BPO) is the hottest thing on the sourcing scene right now. Gartner (US), predicts BPO will be a $US300 billion market by 2004. And if you punch the term into a search engine, vendors boasting of BPO prowess will literally spill off the page. When you really look at what BPO is - engaging a third-party vendor to handle an internal process you'd rather not waste time and resources doing yourself - you realise it's been going on for years. Just look at payroll processors like ADP. So what's the big deal about BPO?
During the current economic slump, business-starved consultants have - in many cases - simply relabelled plain old outsourcing in order to hype a "brand-new" product for themselves. Worse, BPO's definition is often so broad that it becomes meaningless. "Depending on how you define [BPO], it can represent the entire economy," says Christine Overby, an analyst with Forrester Research (US). For example, a lot of companies offer "outsourced logistics" as an example of BPO. But companies have been outsourcing tasks such as outbound logistics for years to companies such as FedEx and UPS. Similarly, when asked to provide examples of BPO commonly in play today, John Hagerty, an analyst with AMR Research, included hiring a law firm to handle legal matters instead of having in-house counsel.
Others, such as Jose Cunningham, managing director of the Outsourcing Institute in Washington, DC, trim the definition to include only IT-intensive functions or processes like, say, benefits administration, call centres and contract manufacturing. But this still doesn't sound like anything particularly unique. In any event, Gartner analyst Rebecca Scholl, who views BPO as a distinct, expanding market, acknowledges that a lot of the services that vendors are labelling BPO don't fit any definition. "Lots of vendors trying to reposition as BPO providers are just doing IT outsourcing," she says. "They're providing an application. They're not really responsible for a process."
So what's the take-away for CIOs? There's a definite payoff in engaging in many activities that have been labelled business process outsourcing. But don't go looking for a business process outsourcer - just define the specific process you want handled, and then find someone who can handle it for you. - Eric Berkman
3 COLLABORATION - So (Un)Happy Together.
If you're going to have a truly integrated supply chain, one that allows you to see your partner's inventory while your partner is immediately aware of the demand on your end, you need tools to facilitate that high degree of transparency and connectivity.
Collaboration tools are becoming a standard piece of the modern Internet, with everything from instant messaging for individuals to collaborative workspaces on B2B sites.
In theory, collaboration tools and practices allow every company involved to benefit from their business partners' product information - such as inventory, price and the manufacturing schedule.
Soviet Communism worked in theory, and we all know how that turned out. In a sense, collaboration - in its truest cross-supply-chain form - strives for business communism. At the very least it requires companies to give up their greatest competitive advantages, the aforementioned info-rmation and knowledge. And that's assuming that the technological hurdles presented by a company's own systems can be overcome. Simple collaboration is happening. Jim Wicker, vice president of information technology for Dynamex, a Dallas-based same-day transportation company, collaborates with FedEx and other shippers through XML connections and Web interfaces. It's a good way to do business, but Wicker says that anything more than purchases and orders would require too many cultural and business process changes to be feasible. And this level of collaboration is an option only if a potential collaborator doesn't have information trapped in legacy systems. If your own systems aren't up to snuff, "what is the point? Why should I open my kimono and show you my data when I know that my data isn't any good?" says Andy Macey, vice president of supply chain for US consultancy Sapient.
Even if your data is in an easily exchangeable form, it probably isn't in an industrywide standard format. Without standards, suppliers have to tailor their data to each business partner. And even if they could do that, letting their customers know how much they paid for a certain product, or how much they have in stock, flies in the face of accepted business practices. - Ben Worthen
4 GRID COMPUTING - Grid and Bear It.
Most companies have scores of servers and desktop systems that sit idle much of the time. What a waste! Why not put those unoccupied processors to use on some of your biggest computing problems?
IBM, Sun and other major vendors are all abuzz about grid computing. The basic idea of grid (aka "distributed computing" in its previous, more academic incarnation) is this: tie many small computers together and use them as a sort of supercomputer. Biotech and animation companies - both of which require massive computing firepower for gene sequencing and scene rendering, respectively - report early successes with grid technology.
In the long-term grid vision, users will be able to harness grid-computing power even outside their firewalls. Businesses will plug into the grid and tap that power - and pay for it - only as needed, just like electricity. Throw the light switch on, the juice starts flowing and the meter starts running. Turn the switch off, the meter stops. No more wasted capacity.
Critics of grid computing point out that interenterprise grids face considerable security hurdles. However, most companies will aim to build internal grids first, using only the resources behind their firewalls. Even there, most enterprises will have to wait for the maturation of another emerging technology - Web services - before grids can hit the mainstream.
The reason is simple: most applications were not written to run in a distributed manner. "Applications are the number-one barrier," says Songnian Zhou, CTO, chairman and cofounder of Markham, Ontario-based grid vendor Platform Computing. "Every time you shift architecture - mainframe to PCs [for example] - the apps you are going to use were designed before this era." In fact, the inability to break monolithic business applications into bite-size pieces is one of the hurdles that has kept the oft-promised mainstream arrival of massively parallel computing hardware - which effectively does in one machine what a grid does across many - out of the mainstream for decades.
Meta Group service director Nick Gall says there is progress. Web services offers a promising attempt at making applications more granular (see "The Essential Guide to Web Services", CIO March). David Knight, vice president of applications and business services at California-based Portera, a Web services hosting company, says that's simply because developers are writing new applications from the ground up with the distributed processor model in mind. Still, it will take some time - perhaps a couple of years - for the vendors to recast today's commercial off-the-shelf software into a grid-friendly mould. - Derek Slater
5 OPEN SOURCE - Open? For business?
Windows is expensive; Microsoft is a monopoly (some say); Redmond makes apps for the enterprise, but not your enterprise.
Linux has gained ground owing to well-publicised installations at companies such as Cendant, Dominion Resources and Schlumberger, plus backing from heavyweight vendors including IBM. Who knows what else open-source software can do for you?
It's very difficult to find anyone who criticises the technical quality of Linux. By all reports, it's at least as scalable and secure as Windows - if not significantly more so. Nevertheless, Linux still has a big hurdle to jump before it gets beyond niche status in the corporate world. The hurdle isn't technical - it's perceptual.
"There is a sort of stigma" attached to open-source software in the more conservative corners of the business world, says Michele Rosen, program manager at IDC (US). "In today's world, where people have so much information to process, preconceptions can be a detriment," adds Rosen (who speaks positively about the actual quality of the software).
In fact, the most commonly touted benefits of open source (it's cheap - and you can modify the code) are precisely what creates the poor perception in some corners. Modifying or extending an operating system is the last thing most CIOs want to do. Actually, it is a bit of a red herring for conservative companies who mistakenly think that's the major selling point for open source. The real advantage comes from the communal development process, which has yielded good, efficient code.
Apache's open-source program has surmounted the perception problem, accounting for more than half the Web servers in use today, according to oft-cited statistics compiled by Netcraft (www.netcraft.com). But sneaking a bit of open-source software into the Web admins' server farm has proven easier than getting onto the servers and desktops running the ERP system.
It's a task that Linux should prove equal to, given time, but the adoption rate continues to lag behind the hype. -Derek Slater