Joseph McKendrick<br>You Can Boil the Ocean, But You're Going to Get Scalded
- By Scott Bekker
- July 17, 2000
The vendors always make it sound so easy. You have back-end systems and data here, you have customers, suppliers and partners there, you drop some e-business software and middleware in between, and everyone is happy.
For most companies, though, a lot of sticky organizational issues tend to gum up this browser-borne Nirvana. Resources -- both human and financial -- are limited. Multiple departments are clamoring to get on the Web, while others are resisting. There's usually hundreds of applications to be dealt with, some of which are inflexible, others which aren't worth the silicon they run on. There are dozens of methods to e-enable them, from expensive integration projects to simple screen-scraping. Some analysts are even now saying to forget all that heavy lifting, and leave it to an ASP or an e-marketplace. Where do you begin? Who or what gets priority, and who decides on that priority?
Those are questions that stump even the most savvy e-business vendors that are guiding this new economy. A couple of leading vendors were recently forthcoming enough to share their lessons of doubt and pain at a recent e-business conference.
IBM's first impulse in the mid-1990s was to throw its operations onto the Web. As a result, the company eventually had to reign in more than 1,500 different Websites which were confusing customers and partners. To complicate matters, IBM had scaled back its direct sales force, so the company no longer had a buffer layer to mask the complexities of system configuration from customers, says Patrick McDonnell, IBM e-commerce director. The direct approach promised by the Web was, well, not quite direct, as Websites proliferated across all of IBM's far-flung departments and divisions. "There was content all over the place," he relates. "We had 27 different ledger systems to interface with. The situation was untenable," he says.
Or consider the quest of Qwest Communications, typically at the cutting edge of networking the information superhighway, which also had Websites all over the place. "We had siloed Web efforts within units that hadn't succeeded in pervading across our organization," relates Mara Abraham, Qwests' e-business director.
The only tenable solution for these large e-commerce behemoths was to unify products and services under one consistent Web umbrella. However, prioritizing which functions become Web-enabled is a challenge. Qwest's response to the challenge was to launch an e-business group to centralize disparate Web initiatives throughout the company. "Focus is important, Abraham says. "There were many roads we could go down -- such as CRM. We could have boiled the ocean if we wanted to." Instead of attempting to put all the company's operations on the Web, Abraham's task force developed an "e-business stack," which consisted of four layers cutting across the entire organization: e-supply chain, e-CRM, e-bill, and a Web front end as the top layer.
IBM chose to initially pursue e-commerce initiatives with the greatest returns, and work down from there. "There's a lot of application areas where you can get amazing ROI, sometimes 200% to 300%," says McDonnell. Achieving this ROI required "a clear-cut strategy and roadmap that the rest of IBM could embrace." One area where IBM realized it could see a quick return was e-care for customers and e-procurement. McDonnell notes that it used to take 30 days to turn around a purchase order at IBM, going out to any of 7,000 suppliers. Now, online through the Web, turnaround time has been reduced to one day.
The lesson learned from these e-business vendors is that a single, unified approach is essential to making gains from e-commerce. Learn to prioritize, and start with the low-hanging fruit. Don't try to boil the ocean all at once.
Scott Bekker is editor in chief of Redmond Channel Partner magazine.