Build on experience - Industry Trend or Event

CommunicationsWeek International, April 2, 2001 by David Molony

Business-to-consumer (B2C) Internet trading companies--those notorious dot.coms--have crashed in huge numbers, but not before they taught some large corporates a few things about trading online.

Most of the B2Cs are gone now, and the failure of some noted business-to-business (B2B) marketplaces like life sciences' trader Chemdex has led some people to conclude that the B2B electronic commerce sector is going the same way. But take care; the e-commerce business has only just started to get organized, and a real revolution is happening in the management of information and communications technology.

In the first place, a survey by Zona Research Inc. suggests that B2B e-commerce is getting more important, not less. Zona found that while 36 electronic exchanges closed in the final quarter of last year, another 189 opened in the same period. There were still 1,029 exchanges working at the end of the year, by Zona's reckoning: a 4% business failure rate is not bad for any sector.

Businesses still see the value of e-commerce in improving operational efficiencies and helping them reach new customers and markets. Most big corporates have carried on with e-business plans, gradually turning themselves into so-called clicks-and-mortar companies, which combine traditional products and distribution systems with new online marketing and ordering channels.

IMPACT, a London-based development network for senior information technology managers and chief information officers, conducted a study across 24 companies with international operations and found that most had set up separate units with their own managers to take the business into e-commerce.

That was a good start, because it meant those new teams could advance development of technology and business applications at the same pace as Internet startups and didn't have to follow the traditional IT engineering processes if they didn't want to. Managers learned new practices, like how to get projects into the marketplace quicker than they had ever done before.

But the study also suggests that right now most companies are not quite sure how to handle the next step; bringing their so-called e-IT managers and teams into the main corporate IT units. This is not just European old-economy conservatism kicking back; half the units studied were supporting business in the United States.

But none of these bluechip companies has made its mind up yet what to do with e-IT. Should they disband it; subsume it within the main division and leave its staff to fight their own corner; or should it be used to help remodel communications and IT provisioning throughout the business?

The worry is that the new technology and business skills the e-IT managers have learned over the past couple of years could be ignored or forgotten in the new economic realism.

Many big companies have responded well to the Internet challenge over the past two to three years; they have gained a new dimension in information and communications technology management, along with a potential new business model. Let's hope their chief executives have the perspicacity to let them continue to build the great networked business.

David Molony, Editor