Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jack T. Pearson who wrote (40837)	2/20/2000 5:45:00 PM
From: Michael Watkins	Respond to of 99985

Jack, Most people should probably just press next on this message because I am rambling with no clear train of thought... Jack, I think we probably agree more than we disagree. To a degree ;) In my company, buying a PC used to take 68 steps and 9 months. Now it takes 24 steps and three months. I do see examples of this all the time. Its usually a combination of technology and process change that makes these improvements happen. Sometimes its merely process and policy change needed. For example, I do some consulting in the area of procurement and payables. For one large client we looked at the way they process and approve expenditures. They validated in accounting every expenditure over 200$. It turns out that on a percentage basis, most of their expenditures by staff were under 5000, and of those, over 97% of them were passed; of the 3% initially rejected, more than 70% of them initially passed. Yet they spent between 35 and 75 minutes per expenditure over 1000 and under 5000 in order to validate them. When you are talking many hundreds of thousands of expenditures, the minutes add up quickly -- far more than any potential loss, not even factoring in lost opportunity from eliminating the checks and spending the time on analysing what they were buying and how to do it better. Now they just pay em, and do spot checks on a small subset. the time savings were enormous once the cultural stigma of not checking everyone was passed. No technology was required to make this change. Now, I'm in the business of selling expensive technology projects so don't get me wrong, I like this stuff. But I do not think that the savings being made possible by process, policy and technology are anywhere near the market cap of all the tech companies trying to flog their wares. I guess I'm repeating myself here, sorry! However, to further make my point (and to further the 'nothing new under the sun' point being made earlier today), we've seen all this technology before. Saving money on internal procurement was always available. People packaging these concepts into COTS (common off the shelf) software products aren't doing anything new and revolutionary. Its my contention there will be enormous consolidation of vendors (i.e. look at how many database vendors there were on mainframe, unix and eventually PC platforms - look back 10-20 years ago and look now) as the overall market for these products is not big enough (IMO and admittedly with no research other than history) to support the huge numbers of like vendors -- all of them trying to cash in on the same dream. A key hint here is so few of them are profitable. What astounds me are professional services firms going public that are not profitable. Speaking as a managing partner of a private professional services firm, I can not for the life of me imagine running my business without a decent profit for partners at the end. I'd be out of business quick. So I see vendors and PS firms running their companies on the knife edge of no-profitability, their very existance totally dependent on a booming stock market in order to continue. If the booming tech market falters, how many of these firms will be toast I wonder... I realize I am rambling and much of this is just gut feel and opinion, but hey, its not a chart - charts are very precise. Back on topic - I do not disagree with you that much has come together to provide organizations with ways of greatly improving their internal processes and external relationships. But there is a finite end to productivity improvement. Has to be. the "new economy" (in an absolute sense and relative to the "old economy") Not trying to be cute here, but what the heck is the new economy anyways? When I look at where I spend my money, most of it still goes to hard goods and "legacy services" (air travel; hotel; restaurant; etc). The information technology companies are mostly in the business of serving the companies that the world considers old economy; and sure, there's a whole new class of business whose business is to sell products to other new economy businesses - both of which for the most part make no money. Seems to me that the old economy, if there is such a thing as two economies, with its deep pockets can outlast the new one, as it isn't dependent on an overvalued stock market for its survival. At any rate, I think change is good; technology is good; $ are good; what I dont know is if this strong tech market will continue (on a fundamental and emotional basis) and what, if anything, will be the catalyst for its undoing. And with that, I think i'll go back to being a chartist since there's much less room for debate in them thar bars... Cheers Michael