Heads up: here comes your next IT challenge.

Enabling computer networks to triangulate the euro was the 800-pound information technology gorilla that sat on the 1998 calendars of many organizations. And the millennium bug is still crawling across some 1999 agendas. But, since there's always something new barreling down the IT pike, what's the next blip to look for on your radar screen?

Dorothy Hayes, director of internal audit at Hewlett-Packard in Palo Alto, Calif. (and recently dubbed as project manager for the HP business-unit split), foresees three blips: "knowledge management, the whole Internet space and electronic commerce," including security. And that overview neatly packages the answers from all the experts with whom Financial Executive spoke.

It's All In Your Head

"Extracting knowledge from systems, databases and warehouses" is first on Hayes' list because, she says, organizations have spent huge amounts of money creating these infrastructures. Now they must learn to use them.

Scott Shemwell, director of the oil and gas industry sector at MCI Systemhouse in Houston and leader of its Y2K-preparedness initiative, calls this "separating the hype from the reality." He says, "You have to understand your business and how technology can be deployed." But, he cautions, "You also have to understand the limitations of technology and the management of technology, as opposed to the management of the business."

Thus, says Daniel Burrus, the author of Technotrends: How to Use Technology to Go Beyond Your Competition and founder and CEO of Burrus Research Associates in Milwaukee, you must change the way you plan. "Strategic planning is financial planning in disguise in most companies, and that's a valid late-'90s approach," he explains. "But strategic planning requires far more. You need to de-commoditize your company's products and services; create a uniqueness that distances you from the competition; and try to capture mind share rather than market share."

He defines de-commoditizing as going from exclusively price-based strategies to "new ways to make your products and services distinct and to generate value, competing on the basis of company values, innovation, customer experience, reputation and service." He says mind share is "how long it takes your firm's name to come to the customer's mind."

"Most of the technology in organizations today is underutilized," Burrus thinks. "The 21st century CFO uses technology tools to redefine the marketplace and redefine growth in revolutionary ways. CFOs should not just be managing money, but wealth and wealth creation. That means managing time as well."

But just as you don't have to understand the physics of Alexander Graham Bell's invention to use a telephone, "You don't have to be a technologist, but you do have to be aware and apply new rules to the tools," Burrus says. Like the founders of Yahoo!, who foresaw the need to categorize information on the Internet, and Amazon.com, who transformed the way books are sold, "You have to redefine the rules for your industry with honesty and integrity, because if you don't, someone else will," he adds.

Shemwell says many financial executives have delegated IT responsibility to CIOs and others with a "just take care of it, don't bother me, I'm busy running the business" attitude. Now, he thinks, it's time for them "to put technology back on their plates, and look inside and outside the company to understand what can be used and how, instead of depending on a few people" - if for no other reason than because, he says, "Technology tied to the bottom line can take sizeable chunks out of your cost structure."

"The trick," Hayes notes, "is finding IT people who understand business. Ask, 'How do we spend an appropriate amount of money for the length of the solution life?'" Just as you budget to replace hardware, she says, "Plan on spending x-amount a year to replace software. A piece of the message is that you're never done spending. And you're never done spending wisely and appropriately." It can be hard to see ROI in technology, she adds, because "the benefits are often intangible."

Therefore, Burrus suggests a weekly appointment for a strategic planning meeting with a committee of one - yourself. (And, he warns, "Unless you write that hour into your calendar, you'll be busy putting out fires.") "Look into the visible future because companies that anticipate change best will profit most. Ask what problems you're about to have, the company is about to have, the CEO is about to have, your employees and customers are about to have, and what you can do about them. Ask how you can develop solutions based on your firm's core competencies."

Then, he says, "Become aware of the tools, because we're going to continue to see new ones. But more important, become aware of how we're going to use those tools."

Have Credit Card, Won't Travel

Who needs to drive a car to a mall to shop when you can drive a mouse? Fewer and fewer people, say statistics from Forrester Research and America Online. Forrester estimates 1999 Internet sales volume will exceed $18 billion - or 6 percent of consumer retail spending - more than double last year's $7.8 billion. AOL says its members alone spent $1.2 billion - an average of $80 for each AOL account - just over the 1998 holiday season.

It's no surprise, then, that Eric Brown, senior analyst at Forrester's software strategy service, thinks the next IT challenge is electronic commerce. "The agenda is still a busy one for corporations, but along more traditional lines of staying competitive and keeping up with Internet time," he says. Therefore, he thinks organizations must tackle two commingled tasks: building efficient applications and managing the impact of e-commerce.

Hewlett-Packard's Hayes says that involves determining how to "make interfaces and processes user-friendly and intuitive without assuming [a consumer's] pre-existing relationship with the company."

"Applications now get built everywhere, not just in IT," Brown adds. "That's not a new phenomenon, but it will start to tax the ability of IT organizations to respond in real time to the Internet economy." So, with consumers buying everything from socks to yachts on the net, firms need to meet the demands for immediacy from both their customers and the marketplace. This involves moving away from daily or monthly transaction runs - what he calls "snapshots" - to real-time transactions between back-end systems.

Thus, he predicts, "A real-time Internet economy and dynamic trade responding to the demands of customers and the market will pressure legacy systems, which are traditionally batch systems. The real-time requirements for connecting people and business processes to corporate systems is the next large challenge."

Security Blankets

As more business is conducted electronically, the opportunities for computer crime - at all levels of sophistication-proliferate. According to the FBI National Computer Crime Squad, e-crimes may include network intrusions, network integrity violations, privacy violations, industrial espionage and pirated software.

Therefore, whether you're selling to the world over the Internet or doing business in a finite universe via intranets, once you've ensured the availability and dependability of your systems, you have to insure their security. "You can't just put up a fence and assume you're safe inside it," Hayes warns. "You don't have the option of not thinking about the security aspect any more."

"There are two parts to this: a technical piece and a risk management component that examines how to protect the company's assets," explains Greg Gamble, vice president of the excess and surplus division at Reliance National insurance. "There can be a gap between the two, but they need to speak the same language. The key is having proper policies and procedures in force."

Hence, Gamble recommends a risk assessment using outside technical experts to identify potential exposures and to open lines of communication between divisions. If hackers, either from within the company or from without, were to breach your company's system, your firm probably would suffer losses, but it would also be potentially liable to third-party loss claims from customers or suppliers. Thus, he says, you need to build "trusted networks" third parties can use to convey sensitive information. These require firewalls, strict policies and procedures and network security risk insurance.

"If you're going to depend on it, make sure it's safe, secure and reliable,"' Gamble concludes.

Putting It All Together

That technology is evolving almost too fast for the average user to keep up is a given. You may never be able to harness every last gigabyte or learn to use each bell and whistle, but you can make your interfaces more pleasant - and more remunerative.

"We're all becoming so used to working on web-looking applications, we'll see a lot more of that in companies," Hayes predicts. "Small companies can look big on the Internet, so the dynamics have changed. You have to look at how technology tools and evolving standards empower various constituencies. But it all comes back to standard marketing practices: Understand who's trying to communicate with you. Then ask how you can present yourself in a way that's transparent. It's not technology, it's psychology."

Where's My Abacus?

Here are 32 techno-tools for the new millennium, according to futurist Daniel Burrus. If you don't use - or at least recognize - them all, you're already playing technology catch-up.

* Internet and the world wide web

* Internet (IP) telephone and fax

* Intranets and extranets

* Internet-enabled electronic data interchange 

* Knowledge-sharing electronic communities

* Knowledge bases

* Groupware

* Net-based education

* Just-in-time training

* Desktop videoconferencing

* Personal communication services (PCS)

* Electronic agents (I-Bots)

* Data mining and warehousing

* Parallel processing computers

* Network computers (NC)

* Advanced expert systems

* Neural networks

* Digital imaging

* Virtual reality and advanced simulations

* Advanced compact disks including DVD 

* Digital interactive television (DIT)including web-TV

* Personal digital assistants (PDA) with wireless data terminals

* Distributed object computing (DOC)

* Advanced communication satellites

* Global positioning satellites (GPS)

* Geographic information systems (GIS)

* Advanced fiat-panel displays

* High-definition television (HDTV)

* Voice recognition and synthesis

* Handwriting recognition

* Noise cancellation systems

* Biometric identification systems

- Source: www.burrus.com

Carol Lippert Gray is managing editor of Financial Executive.