Memo to Forrester

Last month, Forrester Research published a research brief, entitled "Memo to VCs: Invest Apps Dollars Here." I didn't want to spend the $295 for the report, so I took a look at iSource's summary of it. Forrester sees an increase in technology spending in the second half of 2002. So far, so good. But I'm puzzled when the authors list five "solutions to specific business pains," where they see increased demand for IT spending. Here are three of them that I question, specifically.

1. "First, the analysts highlight event-driven adaptive software that can help alert companies to problems in their supply chains, like machinery failure at a supplier or a change order from a customer. Solution providers such as Exemplary and Factory Logic offer solutions that tie ongoing 'execution events' back into supply chain plans, allowing companies to modify their operations in real time as events unfold."
   
   Memo to Forrester: most of the companies I know are still trying to implement the supply chain management software they already have. Heck, a few of them would even consider it a breakthrough if they could get MRP implemented!
   
   
2. "...Forrester's analysts suggest that companies will look to augment their enterprise resource planning systems with 'organic applications,' Web services libraries combined with intelligent agent technologies..."
   
   Memo to Forrester: I evaluate enterprise systems for a living and I have no clue what you are talking about. And, I would wager that 99% of CIO's don't, either. Really now, which companies are asking for this?
   
   
3. "...in light of the Enron and WorldCom debacles, companies will look to applications that use smart data-mining and exception-based alert technologies to detect possible financial irregularities. Providers like PaceMetrics and Searchspace are offering solutions that can model strategic decision risk or detect aberrations that could indicate fraud...."
   
   Memo to Forrester: "smart data-mining" wouldn't have done anything to uncover the problems at Enron and Worldcom. The problem was with the top guys, the guys that are going to be looking at all those "exception-based alerts" you are advocating. Sadly, there's no technology that will make a CFO or CEO honest.
   

Unfortunately for enterprise system vendors, most companies are still trying to digest the software investments they made over the past 5-7 years. Yes, many companies will probably increase spending on information technology over the next 6-12 months, but it will not be in the areas that Forrester suggests. It will be largely in the areas of application integration, implementation, upgrades, and incremental enhancements that deliver additional value from the systems that they already have.