New economic world order to hit IT hard

New economic world order to hit IT hard

Electronic commerce is going to get a lot easier to deploy. But if we aren't careful, an entire generation of IT workers and business-people may soon be lost.

As we move into the age of the digital economy, IT is becoming the economic equivalent of the steam engine or the cotton gin. Time and again we see start-up companies take advantage of IT to build attractive applications that simplify lives. They do this by making some given task, such as trading stocks, a lot more convenient to do online.

And once these companies go public, giddy investors are handing over dollars at a rate that makes the cost of raising capital for these companies almost nil. Therefore, although these companies have never turned a profit, they can easily continue to invest in their infrastructure and even acquire venerable companies that may have been providing that same type of service or product for decades.

It is this basic economic proposition that has most of today's CEOs running scared.

But the problem is that most of their IT staffs have never built applications that were meant to be used by anybody other than employees. So they really don't think about how to build compelling user interfaces, and even if they do, the company is usually unable to change its business processes to make doing business with them over the Web a pleasant experience.

The sad truth is that most companies today see e-commerce only as a vehicle for lowering their cost of doing business by foisting all of the data-entry work on the customer. In an extremely competitive digital economy, that model will not work.

So the question is, are we about to see a massive wave of dislocation across every major business segment, or will the major companies be able to re-engineer their business processes to compete in what is really going to be a new world economic order?

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