Editor's note: Assertion No.

Editor's note: Assertion No. 7 from the Cutter Technology Council states, "The principal IT overhaul in the next 10 years will be organizational rather than technical, specifically a move to leadership practices facilitating organizational adaptability."

In this Executive Update, we'll take a look at the latest data from Cutter Consortium's ongoing survey on components/distributed computing and their relationship to component-based application servers. (We used the term component-based application servers on the survey to distinguish it from other application server uses, ranging from hardware servers to HTTP or Web servers.)

The norm for software development today is to use object-oriented (OO) and component-based technologies -- such as Enterprise JavaBeans (EJB), Java, and Microsoft's C# -- in combination with relational database technology such as DB2 or Oracle 8i.

Sometimes programmers skimp on testing for fear it will slow them down. All too frequently, this leads to delayed or defective software. Properly done, testing will speed up development. Wise teams use test-first development to ensure steady, rapid progress.

Although hardly a panacea for solving IT problems, in today's world, outsourcing is a widely accepted, viable, strategic management tool. However, like most tools, it is only as effective as the operator. Outsourcing relationships need to be built and managed to fit the specific needs and culture of each user to help ensure a successful result. To achieve a custom fit with outsourcing, you must consider the following factors.

For a number of years, IT organizations have been leaning toward using commercial off-the-shelf software (COTS) components in their systems, rather than opting to develop functionality from scratch.

Responses to a recent Cutter Consortium survey on e-business strategy raise interesting questions about the role IT organizations are playing in the move to e-business.

As described in Cutter Consortium's Business-IT Strategies Executive Report, " The New Risk Management" (Vol. III, No. 9), today's business environment contains more diverse kinds of risks and rewards than ever before, ones that few organizations have much, if any, experience in managing.

Cutter Consortium's online business-IT strategies survey asks respondents to identify the leading obstacles to getting more from information technology in their companies. Figure 1 summarizes the results, which are surprising in some areas. See how the results compare to your situation, and consider how these obstacles can be overcome.

In Cutter Consortium's ongoing business-IT strategies survey, 68% of respondents have formal business strategies, and 61% have formal IT strategies. We might expect these numbers to be closer to 100%, but many companies do not focus their energies on developing strategies. But what about the other end of the planning-doing spectrum -- IT projects? How do companies execute these?

In this Executive Update, we will explore two issues based on the latest survey results from Cutter Consortium: first, the percentage of surveyed companies that are using components; second, the types of component models they're using. The survey data is drawn from major companies in North America and Europe.

Until recently, the purchasing function and supply chain systems were considered corporate backwaters. How things have changed: a feature section on supply chain management strategies made it to the cover of the October issue of CIO magazine. The main thrust of the article is that we have done a wonderful job integrating the enterprise, and now it's time to do the same across the supply chain.

Outsourcing the maintenance of an organization's application portfolio to a third party is an IT strategy that's receiving a lot of attention lately. Typically, the decision to outsource the maintenance of production systems is centered around the need to reduce expenses and free up valuable internal resources.

Much has been made in the media of the failures of many dot-coms. Throughout much of 1998-1999, investors plunked down billions on the bet that these organizations could defy the odds and succeed, despite weak financial fundamentals -- revenue, earnings ratios, profit margins, etc. Numerous analysts warned of these weaknesses, but investors continued to drive up stock prices, often on the premise of the "greater fool" theory.

Figure 1 -- How would you describe the overall quality of the data in your company?

We all know that tradition can be hard to overcome. This is just as true for the IT-business relationship as it is anywhere else. IT's nascent steps 40 years ago focused on applying mainframes to the business -- the focus was on the mainframe, on the technology.

Retaining IT employees has become one of today's most difficult challenges for CIOs and senior systems management teams. Those who have the drive and insight to consider many possibilities will keep their people. It's too easy to hide behind the belief that the amount of money offered -- or not offered -- is the only reason for retention problems.

Last month, we explored the question of how many companies were developing e-business applications. We determined that 17% of the companies Cutter Consortium surveyed already had an e-business infrastructure, while 76% were currently evolving an e-business architecture. We also reported that 92% of the surveyed companies were committed to some kind of e-business development.

For many, the process of implementing software is the same today as it was a decade ago. Many new techniques have been devised, but few, if any, have been widely adopted. Organizations still mitigate their risks by engaging strong technical resources at a high price, neglecting the real issue: e-business projects require a strategic focus on implementation techniques.

The Internet and ever-increasing bandwidth have spawned a new method of delivering software functionality -- the application service provider (ASP) model. An ASP creatively combines aspects of software packages, outsourcing, and Internet delivery, allowing customers to receive all the benefits of using a software application without the associated burdens.

Sole-source outsourcing relationships are dead. At least that's the feedback from Cutter Consortium's latest outsourcing survey in which 83% of respondents indicated that they are currently involved in multivendor engagements. Gone are the days when a single vendor provided everything necessary to address an organization's IT needs.

Editor's note: Assertion #4 from the Cutter Technology Council states, "Centralized IT departments will become unsustainable." This assertion will be explored fully in an upcoming Council Opinion.

During the 1992 US presidential campaign, the Democratic Party entered a new phrase into popular American vocabulary: "It's the economy, stupid!" The phrase echoed its belief (and campaign strategy) that the economy was the most important issue of the day and that many issues and problems could be traced back to it.

Cutter Consortium recently launched a new business-IT strategies survey (if you haven't had a chance to participate, please go to www.cutter.com/consortium/index_surveys.html and complete the online questionnaire). This survey will be kept open as long as it produces valuable data.