CSC comments on the past 12 months and predicts key trends for 2005

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Commenting on the past 12 months and predicting the key trends for 2005, Ivor Canavan, European VP at Computer Sciences Corporation, said:

"As we near the end of 2004, it is clear that the past 12 months have witnessed the first signs of some monumental shifts in the IT industry. As we look ahead to 2005, there are four key developments that have captured my attention - the ERP vendor landscape, future acquisitions and consolidation, Business Process Outsourcing (BPO) and RFID.

"In my view, it is clear that there will be only two ERP vendors making any real progress in 2005 - Oracle and SAP. As they continue to lock horns over who can lead the market, licensed sales will basically disappear and 'pay-as-you-go' propositions will increase significantly. Following the stagnant period of 2001-02, the ERP market is finally evolving and with it, CSC has noticed that customers do not place value on the technology alone but on 'solutions' that SAP or Oracle can offer on a managed services-style pricing model by working with IT service organisations.

"In keeping with the ERP industry, we are going to see some of the most significant consolidation of recent times in the wider IT industry during 2005 through acquisition activity. In my view, this can only be a positive step because there is simply too much competition that is causing confusion for customers.

"The past year has seen BPO come into its own as the cost and efficiency savings it offers are finally recognised. This year has not only seen a number of new projects being tendered, but also the acknowledgement of some highly successful existing projects within businesses as 'outstanding BPO in practice'. Moving forward, I would expect such growth to be fuelled in the small-and-medium-sized markets - with a changing emphasis from larger suppliers so they are geared up to be able to service this part of the market.

"The major technological area of burgeoning growth throughout 2005 will continue to be RFID. Whilst 2004 has been the year of hype, 2005 will be the year of realistic acknowledgement of how it can be used effectively within businesses and with that significant investment. Anyone who doesn't recognise its value and invest in it will see the opportunity slip away very quickly. I absolutely believe that we need to look ahead three years for RFID to be a ubiquitous technology and would liken it to the way Chip and PIN has evolved. For example, in the case of Chip and PIN it has been consumer demand that has fired the speed of introduction when often the retailers were slow to react. With RFID, it will be suppliers that put the pressure on the market and drive the introduction of the technology.

"Overall, 2005 will certainly be a make or break year across the many facets of the IT industry. Although it is a positive step, the consolidation at the top end of the IT industry will make waves for every end user organisation, large or small. Equally, there are some major decisions that we will all need to make - whether it's about the impact of RFID or determining the benefits of BPO for our businesses. What's key in all of these areas is a fundamental shift in the industry to the idea of IT transforming a business. Not a new concept, but certainly one that is gaining more ground in corporate boardrooms. Whether it be RFID as a way of revolutionising your supply chain or BPO as a tactic to create efficiencies and cost savings, the thread that runs through them all is the idea that through process improvement IT is an enabler for sustainable business transformation and change.

"As corporates strive to compete and outperform market expectations through continuous improvement and innovation they are looking to how their businesses are run to achieve that - and of course at the heart of that lies IT. 2005 will not be about new technologies, radical change or hype - it will be the year of pragmatism and of IT well and truly being at the top of the list to support corporate change agendas."

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