INTERVIEW With "Interactive Week"
a Ziff Davis Publication
Atlantic Research Technologies,
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Article by Laton
Focused on results
damage estimates from the dot-com implosion and the ensuing economic
downturn are still being tallied, but this much is already clear: The
job of delivering successful e-business initiatives has become a whole
lot more demanding than it was during the Internet's heyday.
Granted, Fortune 1000 and Global 2000 companies, especially in
industries such as chemicals, energy, financial services,
manufacturing, retail and utilities, are still pushing ahead full-bore
with entire portfolios of e-business projects. And according to a
survey of corporate I-managers by Interactive Week, budgets for
Internet products and services will continue to rise, in some large
companies by as much as 20 percent.
But the attitude in the corner office has changed. Once viewed by upper
management as the silver bullet that would resolve any and all
corporate shortcomings, the e-business equation has been changed by the
dot-com meltdown and the associated backlash. "The recent failures in
Internet dot-coms sobered up everyone a little about the payoff of
e-commerce... and many of the anti-Internet dinosaurs are feeling
emboldened," said Bob Otis, managing director at Atlantic Research
Technologies, a worldwide executive search firm.
Put another way, today's I-managers--the business and technology
executives charged with overseeing corporate Internet initiatives--are
on the hot seat. I-managers are expected to deliver on the full value
of business transformation.
"A lot of our clients are e-commerce executives in major corporations,"
said Tom Pullman, a senior analyst at Forrester Research. "Up until the
fourth quarter of last year, they were given a lot of rope. Now with
the downturn, traditional line managers and business unit CEOs are
scrutinising e-commerce executives much more closely and holding them
accountable to hard internal investment metrics."
How are I-managers handling the economic downturn? To get a picture of
the challenges they're facing, Interactive Week surveyed Internet and
interactive decision makers on the state of their Net initiatives,
budgeting, return on investment (ROI), and top technical and business
obstacles. Not surprisingly, the survey found that managing budgets
and project deadlines were I-managers' top two management challenges.
"The future is going to be tough for a little while," said John H.
Keast, who headed up Pacific Gas & Electric's ambitious e-business
strategy and is currently executive vice president of operations and
customer service at Asera, an e-business software company. "Senior
management and shareholders aren't letting go of high expectations and
of getting value for the customer. The challenge for anyone in a
customer-facing [e-commerce] initiative is to unlock value and put
together a really incredible set of processes that reflect what the
customer wants to do." Forty percent of the I-managers polled were
running customer-facing Web sites.
But the survey also found that I-managers are rising to the challenge.
And whether they oversee sites serving customers, trading partners or
employees, successful I-managers have a couple of things in common,
experts say. They have a good feel for their business, are able to
leverage brick-and-mortar resources, can align information technology
(IT) and Internet initiatives, and can focus their efforts on results.
New formulas for success
There are examples of internet units that are doing just about
everything right. Grant Freeland, vice president at The Boston
Consulting Group, points to Delta Air Lines' high-flying Delta.com
e-centre effort. Under e-commerce czar Vincent Caminiti, Delta.com
generated US$265 million in revenue in the first quarter, and the
company expects the online unit to generate $1.4 billion in revenue
for the year.
But Internet departments that don't meet the new mandate are being hit
with layoffs. And the independent or semi-autonomous corporate
e-business development and operations units that don't match up with
the corporations' overall business strategy are being integrated into
the corporate fold or, in some instances, shut down. "They're taking
their cuts like everyone else," Keast said.
But some cuts may be happening too hastily. The success of units like
Delta.com is one reason many analysts still believe in Internet unit
independence. Closing or integrating e-centres, as some organisations
have done, may be an overreaction. "If an e-centre is very effective,"
Freeland said, "it doesn't make sense to integrate it prematurely. It
can probably operate very effectively off to the side for several
years," he said.
One danger of bringing e-initiatives entirely in-house: Many
organisations overestimate their ability to roll these initiatives out
internally, Freeland claimed. "They often get bogged down in a
business-as-usual attitude. Unless you get the organisation issues
right, the effort is going to fail."
To better their odds across the board, the Interactive Week survey
found that companies are now placing a premium in e-business
experience when they select senior managers to head Internet-based
business programs. Most I-managers--two-thirds--have business
management, as opposed to technical, backgrounds.
In April, Dun & Bradstreet put its business-to-business e-commerce
initiatives under Senior Vice President Steve Alesio. Before joining
D&B in January, Alesio was at American Express as president and
general manager of American Express' Business Services Group. With his
background in business development, B2B marketing and strategic
planning, Alesio was brought in to position D&B as a major player
in B2B commerce.