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Lead the Parade

Lead the Parade

Interacting electronically with customers is the number one opportunity and challenge for IT executives, both in Australia and around the world. Such interaction ranges from providing superior customer response and service to doing full blown electronic commerce.

A front page story in ComputerWorld this month proclaimed that "feverish demand" for computer telephony integration systems (CTI) is eclipsing virtually every other computer-related technology. According to the report, a focus on customer service is causing Australian companies to "embrace CTI with a passion". But as Mulder and Scully like to say, "We are not alone". All around the world, IT executives and vendors are obsessed with linking to customers electronically.

Take the Yankee Computing 100, a select group of CIOs at large US companies.

When surveyed in June nearly half the companies said they planned to spend more than 20 per cent of their IT budgets on customer-focused applications over the next three years. Nearly one in three said they would spend more than 30 per cent of their IT budget on investments in customer service and marketing.

Such investments in customer service technology are rapidly passing from the "nice to have" stage to the "you won't be in business without it" stage. They illustrate how IT executives are busy creating systems that extend outside their own organisation. These efforts will soon shift up a gear as sophisticated electronic commerce systems increasingly offer the chance to seize new business and steal a march on competitors.

As I write, SAP and Intel have set up a joint venture company called Pandesic that will from next year offer electronic commerce hardware and software packages to small and medium businesses, worldwide. At the same time, IBM has announced it is repositioning the AS/400 as an electronic commerce server capable of heavy-duty transaction processing on the Internet.

Now I believe that absolutely the first thing you need to do is to make sure your perceptions of the promise and challenges of electronic commerce mesh with those of your CEO and your board. You must be going in the same direction. This is underlined by a study of CEOs and CIOs at 100 of the largest UK companies which was published last month.

While the British chief executives were enthusiastic about the extra service that they felt could be delivered via electronic commerce, the CIOs were far more cautious. Specifically, 57 per cent of CIOs believed that an electronic interface to the customer would decrease customer loyalty, but only 20 per cent of CEOs agreed. The IT executives worried about the Internet being a force for disintermediation (customers dealing directly with suppliers) but their CEOs said that customers just don't behave like that. Two out of three of the British chief executives believed that, in an electronic commerce world, their top three competitors would remain the same. Only 40 per cent of the CIOs agreed. Finally, while the CEOs were gung ho about deploying electronic commerce solutions, reckoning they wanted it implemented in around six months, the IT executives thought 18 to 24 months was more realistic.

Those are significant differences between CEO and CIO. Whoever is right -- and that probably depends on the specific industry you're talking about -- it does indicate the crucial importance of aligning expectations.

Fortunately, Australian organisations possess a window of opportunity to get their acts together. A recent IDC survey of large US companies (ones with more than 500 employees) found that relatively few are fully up to speed with electronic commerce. Some 6 per cent had an electronic commerce strategy in place, and a further 12 per cent had one partially in place. Another quarter of the firms were evaluating the possibility of implementing one.

If those proportions are mirrored in this country, and I believe they are, then you've got plenty of time to jump to the front of this parade and lead it. Your customers await you.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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