INTERVIEW With "Interactive Week," a Ziff Davis Publication
http://www.zdnet.com/intweek/stories/news/0,4164,2761975,00.html

Full Interview with Laton McCartney
and ART's Managing Director

Topic: Changes in E-Commerce and IS Organizations at Bricks and Mortars Companies
Title: "Special Report: Focused on Results"

21 May 2001 issue

Interview Date: 27 April, 2001:
 

Question: "In bricks and mortar corporations, is e-commerce being brought into the IS department and under the CIO, or is it continuning to operate as a separate unit?"

Answer: "We see so many variations of where e-commerce groups are placed in company organization charts, that it is hard to predict exactly where one might find them, even at similar companies within the same industry. A couple of years ago, few companies knew what to do with e-commerce experts, so they tended to be formed into their own groups. There are reasons for this. Some long time IS managers felt intimidated by e-commerce people, who, rightly or wrongly, often got an extraordinary amount of attention, space and funding. Those were the days when people who might have had only six months' experience designing only their personal home pages with Netscape Composer were claiming an automatic right to six figure salaries, whereas highly capable VP's of Information Technology responsible for the whole corporate guts were told that they were only 'business expenses.' The e-commerce guru -- his or her guru title often self-proclaimed -- on the other hand, was the magician who would supposedly singlehandedly transform a medium sized 50-year old family machine tool firm into an Amazon.com of capital equipment with an e-commerce driven IPO -- all at the stroke of a single "save as" button on a web page. One figure was portrayed as the horseman taking you to a scary but maybe lucrative Billionaireland, while the other was that darn guy downstairs whom you needed to show you how to turn your computer on.
 

"Meanwhile, from their own websurfing, a lot of people started to see that sometimes e-commerce was truly useful, but that too often SSL pages stalled and cut internet connections and that java crashed browsers during transactions. When they heard that cookies and entering your credit card number on the internet might compromise your security, CEO's at companies started to actually understand what realistically they could or could not do with e-commerce and their customers, especially in B2C e-commerce.
 

"We've seen a funny effect of the reversal of enthusiasm levels about e-commerce at big companies. The recent failures in Internet dotcoms has sobered up everyone a little about the payoff of e-commerce on the stock market, and many of the real anti-internet dinosaurs are feeling emboldened.  Some good points are that established companies are not rushing into these technologies blindly, and nowadays, most IS managers have themselves plunged into internet technologies and they feel more excited about and are more competent in e-commerce than before. In this really fastly metamorphizing process, former rivals often come to appreciate each other. The e-commerce people have seen that they need to be friendly with the IS group to make use of the network infrastructure and databases to make the most of their technologies. The IS people have come to see that, all in all, when you're working with computers, you're all on the same team ultimately. Besides, a lot of the e-commerce stuff is really challenging fun to work with. In many companies, we've seen a gradual and natural fusion of e-commerce and IS staffs under a CIO or CTO. In some of these places, it's like a baseball team with right handed pitchers and southpaws - they're both seen for their special value and strengths and members of the same team.
 

"E-commerce and IS groups never should have been alien to one another, particularly since the e-commerce people themselves usually were former IS people. In our opinion, the 'need' for separation usually was artificial, really the result of pure panic caused by overmarketing electronic commerce providers that cautioned CEO's that 'unless you completely turn your company into an e-business, you will not exist in five years.' CEO's didn't know if their best solution was to go all-out internet, closing physical operations and firing sales reps, or to simply use the internet as a basic marketing or information tool for customers. Some gullible companies often rushed to create separate departments because the e-commerce providers and management consulting firms warned, 'Listen to us; don't trust your IS departments to these technologies.' The reality, might just have been that the IS people might have known too much about the real limits of computers and the internet and users' habits and adaptability to computer technologies. The IS people might have seemed like nay-sayers to overblown claims from e-commerce vendors, so they were often marginalized as 'non-believers' with their own agenda. It's seems ironic, though, that the IS people, who supposedly are more comfortable with computers than with people's emotions, might have known a lot more about the limits of today's e-commerce technologies than they are credited for, while the CEO's - mostly sales and marketing types who supposedly are shrewd at business and 'know their customers' - often accepted with blind faith extravagant claims about technology and machines from the e-commerce vendors.
 

"Some bricks and mortar companies from the beginning, and some later on, have made careful and balanced use of e-commerce in their operations, some combining and blending e-commerce and IS flavors as needed. Many of these companies have e-commerce people not just as a separate parallel group reporting to a common CIO, but as fully integrated team members within project-focused matrix information technology groups. They might work together with IS people to help the Sales department integrate e-commerce into their ordinary lives, or they might help create a fast-acting global supply chain group with e-procurement out of what a year ago was just a traditional inventory control system and a sloppy old contact list of suppliers. These focused e-commerce/ IS project teams can bring great return on investment, with the company immediately reaping effeciencies and competitive advantage. Rather than taking a gamble of turning your company into a dotcom, CEO's and CIO's can embrace e-commerce and reasonably quickly harvest savings and benefits from e-commerce implementations. Good economy or bad economy, investments that can improve your company's efficiency are investments that are hard to turn down.
 

"Other bricks and mortar companies are using e-commerce on a system-wide level, with some form of integration with IS staff, while at the same time, reserving some of their biggest e-commerce investments for special, entirely internet-oriented divisions or product lines. In these cases, the majority of true e-commerce folk might not report to a traditional CIO or CTO or VP of Information Systems at all. Instead, they might report to a CIO, CTO or VP of IS who is really an almost entirely e-commerce person, who might in turn report to a spinoff e-commerce division President, or to a marketing or sales VP of an incubator e-commerce division."
 

Question: "What's happening generally to the e-managers given the economic downturn? Are they losing their jobs? Are their responsibilities changing? If so, how?"
 

Answer: "The short-term answer is that everyone's salaries have for the time being gone down, or at least, the majority of candidates are seeing much less opportunities over all. Some large companies are laying off highly valuable and highly paid e-commerce people just to placate those Wall Street minor deities that equate layoffs with stock value, not because these employees' knowledge and abilities are no longer useful to their companies. Sadly, many of these companies hired these people without understanding why they were hiring them and they are now firing them without understanding how much they could be losing without them.
 

"Some people are finding exciting roles in less risky areas of e-commerce, such as in the development of customer service channels through web-based solutions, vendor-customer web collaborations, e-procurement supply chain formulas, etc.
 

"The dotcom bubble's bursting has created a lot of wreckage, and many very talented people are having a tougher timer finding good jobs, in part because the dotcom association with e-commerce is viewed as almost a curse by some employers. Part of this is due to snickering by those at bricks and mortar firms who never took the plunge into dotcoms, but some of it is due to the perception that most dotcom experience was flaky. A lot of the CIO's at the thousands of dotcoms out there that failed were perfectly good IS types, but they were not really hardcore e-commerce technical people themselves. The massive outflow of dotcom CIO's has tended to cause a watering down of the true CIO or true e-commerce brands in the job market. Many were not really CIO's, either, but rather many were really inexperienced IT managers with inflated titles. Many were buying off the shelf technologies cranked out by the same buggy vendors. Most were extraordinarly hard working, but many were not innovating e-commerce technologies or content. When their companies collapsed, a lot of people marketed themselves as "E-commerce CIO's," but their experiences and salary expectations might not live up to their old dotcom job levels, because they will be competing with more experienced e-commerce people or people who have really put in the time to be considered at CIO level. Our recommendation is that they market themselves for what they are: capable IS Managers or Directors with good exposure to, but not expertise in e-commerce; and we encourage them to highlight their risk-taking, challenge-oriented spirits, which should be particularly valued.
 

"It might take a few years for all the bricks and mortars companies to figure out in what department they will house their e-commerce people, but to us, it looks like the technical people themselves are talking to each other again and learning from each other again without the bravado and jealousies of the past, and that the EC and IS people will soon become indistinguishable from one another, because most people will become cross-trained in each other's craft. Maybe then somebody will have to invent another abbreviation or distinction for the guys and gals in the computer department, just to shake things up."