E-commerce is changing how IT plans and builds systems. Command and control are out; flexibility and collaboration are inFor years, your company has been keeping track of which customers order what products from you. If members of your sales force could get their hands on that information, they'd be able to spot customer preferences and know which new products to recommend. If your design team staffers had that information, they could take customer preferences into account when creating new products. To really capitalise on this opportunity, both the sales force and design teams have to keep each other up to date on what's wanted and what's in the pipeline.
There's a problem with this scenario, however. The IT group and Web departments are both charged with coming up with ways to do this, and neither side is offering an approach that fits the tab.
IT first has to figure out which applications to deploy and then train everyone to use them; even then people will only be able to access information from specific, properly connected company offices. However, the information will always be correct and totally secure from probing by anyone outside the company. On the other hand, this approach presents your company with high training costs, a long implementation schedule and a real hurdle in getting the information into the field.
For its part, the Web group says it can create an application fast and cheaply while making the information accessible from everywhere. They'll use a Web-based front end that will cut down on training costs; anyone with a browser and a password can access and input information.
All the Web team needs is for the IT department to download the information from a legacy database onto a Unix server every night. This approach, however, creates a problem. The IT department isn't likely to go along because of the risk of creating redundant and out-of-sync databases, which anyone with Internet access may be able to get their hands on.
Some companies are solving this architectural dilemma by making their IT departments move on Web time. While that's a simple concept, implementing it means changing the way the IT department has been doing business pretty much since its creation.
At health-care network Yale-New Haven Health Systems in Connecticut, moving the IT department to a Web mind-set has meant more than migrating from mainframes and LANs to the Web. It has also meant going from a situation in which the IT department determined what was best for everyone to one in which the department has to share the decision-making power.
This shift came to the fore during a recent Web project. "We have an old mainframe legacy system that we use as our principal clinical system," says Mark Andersen, Yale-New Haven's CIO. "It has taken a lot of effort to make that accessible [through the Web]." Prior to putting its systems on the Web, the mainframe was used only for accessing clinical data - records and test results - from Yale-New Haven's facilities.
Now, the system's 3300 medical staffers can access clinical and reference information anytime, from anywhere. This means more satisfied physicians, better care for the patients and a savings payoff for Yale-New Haven itself. For example, if a patient has a problem when her primary care physician isn't on duty, the patient receives treatment from a doctor who has never seen her before. Before the Web, that doctor may have called the primary care physician and described the situation and patient's history over the phone. Now the primary care physician can look at the patient's records from home, access an internal reference library and then make treatment recommendations online. For the organisation, bills are now processed faster because records of services rendered are available to all departments as soon as they are entered into the system.
In technical terms, making this transition first involved installing remote dial-up access and then using a suite of programs from Citrix that integrates interactive applications into a standard Web browser, combining personalised Web content with managed applications. These programs also allow Yale-New Haven's IT department to manage applications from the mainframe.
Andersen also coordinated an initiative being run by the hospital's marketing group for external customers. This has added a health-care library and an online referral and appointment service as well as a subscriber e-mail newsletter to Yale-New Haven's Web site. Even though the IT group keeps the site up and running, it no longer dictates how things operate. Marketing is responsible for the site's content, yet neither IT nor marketing can change the site without agreement and cooperation from the other.
That's a big change for IT managers like Andersen who are used to having sole control of an organisation's computing needs and IT architecture. As the final arbiters on all things technical, the IT managers used to pick the applications that were deployed and made sure the users were trained on them. That's not how it works now with the Web, Andersen observes. At Yale-New Haven, IT has had to follow the lead of the marketing group in terms of what's needed on the Web. Yet IT enables the Web site by providing content from legacy systems. As a result, Andersen's department has more influence on the kinds of applications that are offered online.
Andersen isn't alone in playing catch-up to the Web development group.
Yet both IT and the Web sides are learning to get along with each other in many organisations. This new-found cooperation is often because of sheer necessity. Both are being hit with the need to justify their costs. "There are a lot of pressures on these folks right now. They're short of people, and they're under tremendous pressure to perform and provide valuable service to the business to justify their existence," says Fred Meyer, vice president of product management for Tibco Software, a provider of real-time infrastructure software. Many IT organisations have responded by becoming more aggressive about business-oriented goals, says Meyer. And this has meant IT has to work much more closely with the Web side.
Andersen says he has been fortunate in that he and Yale-New Haven's head of marketing get along very well. "Our relationship between the MIS and the marketing groups is one of the better ones I've ever seen," says Andersen. "They want to get stuff out there, and we want to make sure we know how to support it."
Most CIOs don't have it as good as Andersen, though. Friction between Web and IT groups is more common than not, often as a result of IT jealousy of all the organisational attention and funding devoted to the Web group, says Stephen Elliot, an analyst with GartnerGroup. "You would be hard-pressed to find anyone in IT who wouldn't want to work on an Internet strategy or anything related to the Internet," Elliot says. "[Working on Web initiatives] helps them hone their skills, gives them better prestige internally and presents them with new challenges that they might not have faced from the traditional infrastructure." And, in addition to not getting the funds and limelight, IT groups are also kept out of the loop, being treated like the proverbial mushroom - kept in the dark and fed, well, a component of fertiliser. "IT is, in many cases, the last to know what's going on, what's being developed, what type of impact it's going to have on the existing infrastructure," says Elliot.
Another reason IT personnel are envious of their Web group co-workers is that many Web groups started out as part of the IT department. When senior managers realise that the cultures and skills needed for a Web group are, in fact, very distinct from those being used by IT, they usually then do one of three things: create an entirely separate Web company; or establish an entirely new unit within the company. Unfortunately, none of these approaches guarantees success. The separate company may flounder, the third-party provider may not understand the core business processes and the internal unit may face serious opposition from within the company.
"If an organisation is created and still remains within the company, many times that's not as effective as intended because it tends to alienate a lot of the other pieces of the IT organisation that are not connected with that," says Kevin Mulcahy of DMR Consulting (US), a provider of management consulting and IT services.
Separate but Equal
Snap-on Tools has avoided this pitfall. The IT department for the Wisconsin-based manufacturer of auto industry tools was initially given the assignment of putting transactions on the Web. "Our initial e-commerce initiative was focused on our dealers," says Brad Lewis, manager of Snap-on's Internet commerce centre. The goal was to migrate the 3500 dealers away from faxing and calling in orders to submitting them electronically twice a week.
Snap-on launched the initial project in 1994, although it took two years for a majority of dealers to use it on a regular basis. Snap-on's senior managers then decided they could realise even greater efficiencies through the Web. To get that done, they created a separate Web unit in California, far away from the Wisconsin-based corporate headquarters. "[Being in San Jose] allows my group to truly focus on getting Web applications for e-commerce and Web sites up and running quickly and efficiently," says Lewis. "It kind of took us out of the typical corporate IT environment."
Despite being thousands of miles away from the IT department, the e-commerce group is still highly dependent on it. Thanks to the efforts of the IT department and the e-commerce group to integrate an online catalogue system with Snap-on's current ERP system, the company now runs a Web site that personalises its product catalogue for each customer. It adjusts the selection of tools and prices depending on which industry the customer is in and what, if any, pricing agreements the customer has with Snap-on. All of this requires a lot of information from the IT department - everything from when the latest tools are due for release to new pricing guidelines. In addition, some updates to the Web site no longer need to go through IT. For example, an employee in the industrial division can add a new customer to the system by filling out an online form with the customer's name, password and ID number.
Getting this up and running was a very frustrating experience for Lewis, who recognises that he was asking IT to break some old habits. To keep his objectives on the radar back in Wisconsin, Lewis has used every Web tool possible to shrink the physical distance between the two groups- using everything from Net meetings to videoconferencing to online project management in order to stay in regular contact with his counterpart in the IT department. He is not surprised that it has taken so much work for him to get the message across. "We're talking about a change in philosophy," he says.
In the Same Boat
It's helped that Lewis has been able to show the IT department what he wants to do and how it will help the company. "I believe in proof of concept. So I figure out a way to get it done, and I show it to them and say, Look at this; isn't this neat?'."
In turn, one thing that has made life easier for Snap-on's IT department is that Lewis and the e-commerce group understand how much of the content they need is contained in legacy databases. Such an understanding can help the Web group and IT department get along at other companies.
"Most of the facts or hard data that are going to be needed by the e-commerce system are already in the systems that exist," says Larry Warnock, vice president of marketing for OnLink Technologies, a provider of sales and marketing applications for e-commerce. "So if [the Web group] just looks at the systems they have - as sort of a great source of data - it can coexist."
Realising that communication is a two-way street, Snap-on's Lewis has one person from his 16-member department working at the IT offices in Wisconsin. His job is to translate each group's concerns to the other. "He's on my team but - while his job is to interface with this group so that they understand your needs and your problems - he's kind of riding the fence: some days it looks like he works for them and some days it looks like he works for me."
A similar mind-shift needs to happen at organisations to bridge the gap between IT and Web architecture. "Once you get done looking at your horoscope and your stock quotes, if the infrastructure isn't tightly tied to the Web site then you don't really have anything to say," says Meyer. "That us-versus-them, we're-building-the-Web-site and you-guys-go-away-and-do-the-infrastructure thing that was common a couple of years ago is really off the map now."