Why an IT Roadmap? 1. Creates an opportunity to better align business and IT initiatives. The Business Plan drives the IT projects. Helps the organization migrate from limiting the focus on market share, to becoming a market maker. 2. Enhances communications with employees, partners, stakeholders, providers and customers. Confirms everyone is on the same page. 3. Crystallizes the business drivers. Why are we doing this project? How does this fit into the overall plan? Helps in capturing tangible benefits. 4. Financial-drives the operating and capital budget activities to maximize the “bang for the buck”. Establishes/expands financial control and reporting. 5. Operational-Helps identify critical success factors and provides the platform for key performance indicators. Maximizes current business processes and information flow. 6. Documents the current IT environment and sets the stage for development efforts to meet business needs. 7. Results in a crisp statement of priorities and assists in the resolution of current “pain points”. Assures razor-sharp focus on critical enterprise activities. 8. Work is performed by an experienced, objective, outside consultant. Becomes the tool for transformation from current state to future state.

Spiking Gasoline Prices Hammer Economic Recovery

January 16, 2011

Rising gasoline prices are hammering the U.S. economic recovery.  Gasoline prices have been steadily climbing over the last few weeks, wreaking havoc with the U.S. economy.  CNN (WWW.cnnmoney.com), Fox news (www.foxnews.com) and Consumer Reports (www.consumerreports.org) all report a substantial increase in the cost of a gallon of unleaded regular for the week of January 10, 2011.  Nationwide the average price has spiraled to a whopping $3.09, up 19 cents since the first of the year, and an increase of 34 percent compared to last year.   This is the highest average gasoline price since October 2008. 

The price of oil continues to hover above the $90 level.  Oil closed at $91.54 on Friday, Jan 14, 2011.  The Wall Street Journal (www.wsj.com) reports that for every $15 increase in the price of oil there is a 1 percent decrease in U.S. GDP.

Energy analysts are somewhat baffled by this spike.  Historically, we don’t see this type of spike until later in spring when people start driving more and thinking about spring break or summer vacations.  Normally, at this time of year, consumers are driving less, paying off credit cards from holiday usage and trying to survive.  Gas supply is still strong; refineries are operating at peak levels, and there are no unusual outside factors driving the current spike.  Economists have noted the unusually warm fall weather, followed by a substantial snow storm across much of the countryside, have influenced the overall price.  Overall, consumers are driving less, some caused by rising gasoline prices, but also the large number of unemployed workers and uncertainty about the U.S. economy.  

It is way too early to develop accurate forecasts for 2011 and beyond, there is no indication that 2011 will be anything different that 2010.  Although future trends are extremely risky to predict, there are some prognosticators who have put forth a number of interesting hypotheses:

• John Hofmeister, the former president of Shell USA and the author of “Why we Hate the Oil Companies,” and founder of Citizens for Affordable Energy (www.citizensforaffordableenergy.org) predicts Americans will pay $5 per gallon of gasoline by 2012.
• Gasoline expert Fred Rozell predicts that 15 states, including Hawaii and Alaska, will see gasoline prices top $4 by Memorial Day 2011.
• The Energy Information Administration’s (www.eia.doe.gov) latest gasoline price forecast estimates that regular-grade motor gasoline’s retail prices will average $3.17 a gallon this year, 39 cents per gallon higher than last year.

 

What’s causing the spike?  Experts really don’t know.  Rising crude oil prices surely have an impact; but beyond that, the experts can only speculate.  Some economists have blamed the increase on China’s rising energy demand; while investors blame the spike on lack of confidence in the U.S. economic recovery and world financial crisis. 

What remains clear is that rising energy prices will negatively impact the U.S. economic recovery in 2011 and beyond.

U.S. Economic Recovery

Economic Recovery: A status Report

May 1, 2010

Most financial analysts and economic forecasters all agree that there are a few positive signs the U.S. is making small, slow steps in recovering from the financial crisis of the last 18 months.  Even President Obama has hit the road to brag about the recent improvements.  Last week the president was in Ottumwa, Iowa, where his presidential campaign got a big boost in 2008.  He admitted that the economic recovery hasn’t reached everyone, but he went on to say “Times are still tough in towns like Fort Madison.  And times are still tough for a lot of middle class Americans, who had been swimming against the current before the economic tidal wave hit”.    Agriculture Secretary Tom Vilsack, a former Iowa governor, travelling with the president told reporters “There is a silent crisis occurring in rural America that’s been ongoing for decades. “

The latest economic report shows some signs of progress: The nation added some jobs at the fastest pace in three years last month, the manufacturing industry is growing at a steady pace, and new claims for jobless benefits have declined.    

In other good omens, The U.S. Department of Commerce reported spending by consumers rose at the fastest pace in three years.  That helped the economy to grow at 3.2 percent pace from January to March 2010.    This was the third straight quarterly gain in gross domestic product.

The economic crisis in Greece and Spain has slowly crept across the entire expanse of Europe and was felt worldwide as the U.S. stock market pulled back 159 points as investors took a more cautious approach, thus breaking a hot three month run of the Dow Jones. 

First quarter earnings from public companies generally have been positive.  Eighty-five percent of the 98 S&P 500 companies that have reported so far have beaten estimates, well above the 61 percent in a typical quarter, according to Thomson Reuters.

While there multiple positive signs the economic recovery is alive and well, there are also other signs that indicate a more gradual recovery.

Unfortunately the unemployment rate has held steady at 9.7 percent for the last three months, and 15 million Americans are still out of work.  The White House (and other experts) estimates that that rate isn’t expected to fluctuate more than a few tenths of a percentage point in 2010. 

Most analysts agree: until we put 15 million Americans back to work, economic recovery is an oxymoron.