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How IT Departments Are Responding to the Challenges of E-Commerce

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Introduction

How IT Departments are Responding to the Challenges of E-Commerce Professor Michael Earl and Dr Bushra Khan Centre for the Network Economy CNE WP04/2001 How IT Departments Are Responding to the Challenges of E-Commerce Michael Earl and Bushra Khan, London Business School New information technologies bring new business threats and opportunities with them and it is the business impact which generally captures management attention. However, each wave of new technology also brings new challenges for the IT function, not only in responding to newly perceived business needs (the demand side) but also in the way the IT function has to work (the supply side). From time to time the combination of new business drivers and new technologies and techniques forces the IT function to undergo fundamental change or transformation. This happened in the early- to mid-1990s and led to new agendas being proposed (Rockart et al, 1996), new models of IT practice being developed (Cross et al, 1997), and to reassessment of the core purpose and capabilities of the IT function (Feeny and Willcocks, 1996). Business exploitation of the Internet and the World Wide Web, which we perhaps can label the "era of e-commerce" or "the dawn of the new economy", would seem likely to provoke yet another transformation of IT practices in the early years of the new millennium. Popular books on e-business often suggest that a key to success in this era is a robust and comprehensive IT infrastructure on the one hand and a capability to rapidly develop and implement new e-business applications on the other hand (Hartman et al 2000). Thus in the summer of 2000 we examined how IT departments were responding to the era of e-commerce. In particular we surmised that the apparent need for rapid construction of a new generation of IT applications which were becoming the channel, product or core processes of e-business, and which also had to work reliably, represented a substantial challenge for traditional, established IT departments. ...read more.

Middle

Accordingly exacting human resource policies and procedures are adopted, either deliberately or by emergent necessity. These include induction bootcamps, incentives for time to market performance, revenue growth, or meeting service level targets, bonuses for recruiting other IT personnel and employee satisfaction surveys. Such initiatives are reminiscent of HR policies in strategy boutiques. The belief that such boutique-style organisation and HR practices are necessary often was one of the arguments behind spinning off an e-commerce venture or creating a new "E-IT" department within an incumbent company. In web application development companies, dotcom start-ups and many spin-offs, the IT personnel are not, however, in a separate department; they cohabit with the rest of the business. PRACTICE FROM TO Organisation Specialist Function Boutique Activity Planning Long Term Exercises Rolling Plans Architecture Uniform Platform Three Tier Architecture Development Waterfall Method New Venture Development Control Project Management Programme Managers Life Cycle Build to Last Launch and Learn Work Organisation Division of Labour Multi-disciplinary Teams Table 2 New Practices in IT Weekly Planning The practice of IT Strategy or IS Planning has been a top IS management issue over the years. It has spawned methodologies, consultancy practices, research and a veritable lexicon of terms. These include "IS Strategy Planning", "IT Strategy", "the Applications Development Portfolio" and "Systems Long Range Planning". None of these ambitions is nonsensical. There was and is a need to align IT investments with the business; it helps to have a long range plan for IT resource development and deployment; there is often a need to prioritise application needs and requests; IT application development projects could be multi-year activities. So whether IS/IT planning was an annual, occasional, three yearly (or more) exercise, it was generally long term and involved substantial effort. In e-commerce ventures, IT planning often is done through weekly, Monday meetings. In one 18 month-old dotcom start-up, the CEO and CTO meet weekly to agree priorities in order of urgent fixes, missed deadlines, reactive opportunities and next step business developments. ...read more.

Conclusion

They also provide a routine mechanism for intensive review of projects jointly between IT executives and business executives. Rolling plans therefore also would seem to be a good device for IT - business integration, especially when "IT is the business". New Venture Development is a metaphor for systems development in e-commerce; it is also the philosophy which underpins the suggested three-phase venturing life cycle for systems development. This suggested new methodology provides a structure for evolving from loose exploration of an idea through iterative design to tight implementation. It also provides two checkpoints for funding, resource allocation and go/no-go decisions. By adopting the venturing label, it might also symbolise and legitimise the goal of fast execution. Three Tier Architecture offers a means of reconciling fast and ephemeral development of customer-facing systems-based products and channels with more permanent, industrial strength back office processing and data management. Business and technology uncertainty always limited the degree to which IT architectures could be comprehensive and stable (Earl, 1989). Recognising what must be adaptable and what should be more stable is a sensible way of confronting reality. Clearly the key is the availability of middleware which does the interpretation job effectively. However, some companies are already committed to this principle; indeed some have adopted what may be an even more sophisticated approach, namely multi-tier architecture. Multi-disciplinary Teamwork is the principle, it appears, that IT executives who have worked in both old IT and new IT departments most value. They want to ensure it is not lost as their e-commerce ventures grow larger and they are encouraging their peers in old IT departments to adopt this way of working. It has been advocated in the past (Bensaou and Earl 1998); the new context of e-commerce has stimulated it - indeed it has emerged naturally. We suggest that these four principles should guide the management of IT in e-commerce ventures; they may well make sense in traditional IT departments as well. ...read more.

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