Don't go with the flow

“We’ve been through a three year information technology orgy where everything was supposed to get bigger and brighter, but it hasn’t worked. Now businesses are rightly sceptical.” So says Martin Butler, chairman of UK-based analyst Butler Group. But he insists: “Those that have the nerve to ignore the technology waves, and get on with the IT they need to serve their specific needs – and do it differently – will be the winners.” A laid back, almost diffident, distant yet affable man, Butler carries with him rather more weight than his demeanour suggests. With a quarter of a century of professional IT under his belt, and a 90-strong company providing IT updates and advice to 1,500 subscribers across Europe, he speaks with quiet authority. Butler’s whole background is IT in manufacturing and business. Following a first in physics at Hull in 1975, he spent time at British Aerospace before moving on to business IT software firm Radius, and then to the kitchens equipment manufacturer Hygena, where he rose to IT manager implementing its enterprise software. “That was the financials, BOMs, stock control, the whole shooting match,” he recalls. “There were less packages in those days, so you had to do a lot of it yourself.” In 1985 he went freelance, working for Austin Rover at Cowley on Just in Time improvement projects and was then lured to the City. He set up Butler-Bloor with IT guru Robin Bloor in 1988 to advise on IT strategy, and broke away in 1990 with the Butler Group “to focus on researching the business application of IT rather than the technology itself.” Butler believes these are interesting and indeed encouraging times for British manufacturing. He says attitudes and awareness at board level are changing fast and for the better, with hard-nosed focus now on what they’re about first and IT second. “You go to the board today and they’re not at all shy about expressing what they want to do. They know what’s wrong with their businesses; they recognise the need to understand their businesses before they start looking at the technologies; they’re not intimidated by IT any more. They’ve spent money themselves on projects that have come to nought. Now they are very confident.” It’s this realisation and awareness, he suggests, that could turn UK firms around – equipped as they now are to make more sense of the mass of technology out there to support them. His advice: “Manufacturers boil down into two categories that will become increasingly differentiated. Large manufacturers will become larger and more powerful as they use collaborative technologies to enhance their position. So the name of the game for them is consolidation and aggregation. But smaller companies are going to have a hard time: their issues are going to be all around efficiency and compatibility with their largest buyers.” That being the case, he counsels manufacturers first to heed Butler Group associate and US economist Paul Strassmann’s findings. “Strassmann’s research shows that when companies apply technology willy-nilly, follow the huge waves of IT, like ERP, CRM, client/server – just jump on the bandwagon – then IT investment doesn’t correlate at all with their bottom line improvements.” Instead, he says, users should learn the lessons of the ‘80s and ‘90s, and go with their new found confidence and understanding, investing only in what is justifiable in a business sense. “Look at it this way,” he says. “The dynamics of what they can do are really very simple. They can do nothing, or do the same as everybody else, or do something different. The traditional response in IT is to do the same as everyone else, but that’s just a draw or lose game. It can’t deliver any competitive advantage because everyone else is doing it too. So companies should be doing something different, something that’s specific to their own needs, their situation, their markets.” It’s a clarion call from a man steeped in IT and its vendor community. “Ignore the technology trends – they’re driven by the IT industry anyway. Do only what you need to do.”