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Peer Pressure

Peer Pressure

Applied well, e-business techniques and infrastructure implemented in successful established businesses can dramatically improve their ability to exchange knowledge globally, delivering better customer solutions while ratchetting up corporate profits, Wilton says. For CIOs this offers a real opportunity to deliver benefits to the corporation and assume the hero's mantle.

"But they probably won't see it as that," laments Wilton. "They'll see it as anarchy." The it in question being the peer-to-peer networking necessary to allow informal knowledge transfer in a global e-trading corporation, which Wilton believes is critical to ensure that the company delivers to the customer what is required rather than shoehorning the customer into what is easy to supply.

If all corporation information is stored centrally maintaining control is easier, but Wilton believes the information will be less frequently used and less often updated. By encouraging peer-to-peer information sharing, it is more likely that virtual communities will form - for example among salespeople who sell to small retail businesses in Sydney, London and Chicago - and people will informally communicate information about the solutions that work for this breed of customer.

It's a bit like the gardener's dilemma. For total control of the environment a gardener rakes the jacaranda's petals from the lawn and paths as they fall. Imposing order means there is less chance of a mishap (no one slipping on decaying petals), but it also means that everyone misses one of the real benefits of the tree. Analogously, CIOs might like the control they win with a client/server architecture, but the company misses out on the benefits of peer-to-peer networks. Some organisations, though, are experimenting and leaving the petals scattered.

GlaxoSmithKline, for example, has recently taken out a 10,000-seat licence for a peer-to-peer network, Wilton says. For global corporations Wilton believes these sort of informal information networks will be essential as forward-thinking companies realise that the real benefit of e-commerce is the ability to meet the needs of individual customers wherever they are based and however large or small they are; these organisations will shed the shackles of a management matrix ruled by territory and product managers.

Wilton offers the example of a large multinational company that wants to buy three large servers - one for its London office, one for Hong Kong and one for Chile. At present most corporations' management matrix demands that this customer conducts three sets of negotiations, is offered three prices and three sets of delivery terms. In a more customer-centric organisation both the supplier and the buyer are able to take advantage of the economies of scale and the ability to do business online. The supplier also builds up a broader information profile of the client and, over time, grows the value of business from that customer.

Smaller customers will benefit from a customer-centred information approach as well. By allowing informal exchange of information it should be possible for the supplier to segment customers by need, regardless of where they are based in the world, and profit from knowing that a solution sold to a tyre maker in Slough might be equally applicable to a tyre maker in Cincinnati. For CIOs, this means abandoning the regional information silo mentality and embracing a more dynamic (although still robust) information infrastructure.

To achieve this, Wilton believes that CIOs must develop a more strategic approach. They first need to delve into the business they support to find the real drivers of value in the corporation. Once they understand what those are, they must identify the processes that support them and measure their effectiveness. It may be that some of the underpinning processes need to be improved, and technology can be an ally to help achieve that, he says. Once those processes are working well (Wilton says at Six Sigma level, or 99.999 per cent efficiency) e-business techniques and technology designed to catapult the business ahead can be introduced.

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