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Business Ownership of E-Commerce
From: Cambridge University Press
| By:
Paul May |
EDITOR'S INTRODUCTION |
The introduction of e-commerce into a business is a complex undertaking. Every aspect of a successful enterprise's organization and operation may need to change. In this essay, business-technology consultant Paul May considers the impact of e-commerce by exploring the question of who should own it. |
 here does ecommerce "belong"? This is one of the most common questions raised within organizations and, although many people are uncomfortable with raising the question, it is nevertheless an important concern. We have been trained to discard mental constraints relating to organizational structure and to regard local ownership as an inhibitor to innovation and to customer service. Yet, we also all know new initiatives are doomed to failure unless explicit responsibility for their success is identified and publicized. |
The key to allocating ownership for ecommerce within the organization lies in recognizing and communicating its constituent facets. Therefore, the branding and corporate voice of a business-to-consumer site should be given solely to the existing corporate communications team, with whatever support they may require from a new media design unit. Customer dialog issues should be located squarely with the existing customer services team. These two teams take the lead in establishing how the company speaks and how it listens. |
Ownership of ecommerce systems themselves tends to raise more contentious issues. Most ecommerce systems recruit a range of legacy systems, which are under the control of the organization's IT department. Some ecommerce initiatives require solutions sourced by third parties, sometimes in the form of services rather than software components, for example, a credit checking facility. While the capability in question originates outside the organization, the IT department is the default owner of the relationship. |
This is even more likely where business-to-business, system-to-system interactions are involved. In this case, the complexity of matching two or more sets of indigenous peculiarities emanating from a set of organizations with their own histories and traditions tends to make the IT team the only player with any hope of understanding the project's critical path, let alone staying on it. It goes without saying that any organization with an established IT department will find its IT team eager to build new functionality or integration bridges, although the alacrity of such teams to collaborate with external suppliers is variable. |
The IT/business divide
IT expertise rests in the IT team and IT departments make good environments for the development of solutions, process expertise, and facility with the firm's data--this is indisputable. Ownership of the associated business processes, however, does not go hand-in-hand with responsibility for the applications that serve them. An IT department may assemble, maintain, and operate a system, but it is a custodian of that capability, not its owner. Ownership remains in the business. |
The IT/business divide is an increasingly confusing distinction as ecommerce develops. Clearly, some businesses are electronic and all businesses are tending this way. Business is IT and IT is business; so everyone is on the same side, performing the same dance. Organizationally, however, skills still tend to pool at the extremes of a business-IT scale. More important, loyalties do, too. |
People with a business orientation tend to see computing folks as obscure and obstructive, while IT people tend to see business people as unimaginative and slap-dash. These are horrific generalizations, of course; but some truth is in the observation that each "side" sees itself as the true keeper of the enterprise's best interests--a role it enacts through the maintenance of certain professional rituals. |
No simple answer exists to this conundrum. Smaller and younger organizations tend to have less of an entrenched business/IT divide and the answer to its removal for larger companies may be to spin out new organizations with separate identities, goals, and cultures. This may seem counterproductive because the legacy systems, processes, and other intellectual property of the host organization represent its key value to a future ecommerce-enabled enterprise. |
Yet all established companies need to go through the process of making themselves appear "strange" to themselves, so they can challenge assumptions about their strengths and weaknesses. Budding off a multidisciplinary team that is tasked with implementing ecommerce capabilities across the company is one way of achieving this perspective. In this way, we can allocate responsibility for the leadership of practical change, without attaching ownership of all its goals and resulting processes. |
Support and development
Ecommerce applications have greater support requirements than most traditional business systems. Business-to-consumer applications need to be operable around the clock and every day throughout the year. Traffic analysis identifies periods when the least impact will be felt from maintenance downtime, though such an analysis may also be used to justify marketing efforts in the relevant time zone. |
The principal means of ensuring scalability and coverage is to operate mirror sites, with several separate images of the public ecommerce offering. This requires synchronization management, which adds a further level of systems-level functionality to a mix that already contains Internet connectivity maintenance, security monitoring, and component failure monitoring. |
The daily impact in the systems department is, therefore, akin to a reformulation of its mission as a real-time business. An established regime with business hours support and overnight batch processing gives way to an environment where transaction streams and background reconciliations and analyses run in parallel. |
From the point of view of systems development, most ecommerce applications are developed iteratively. Both business-to-consumer and business-to-business initiatives involve cycles of experimentation and evaluation. A sound practice is to prototype all ecommerce services internally before they are extended to their eventual user community. Inhouse use of online brochures, catalogs, and reservation systems developed in the target technology allow the organization to test its logical and technical architectures in a controlled environment. |
Ecommerce systems development is often outsourced, with software components or services supplied by experienced third parties. Much is to be said for using third-party catalog and content management products, and for adopting third-party security frameworks. Where a service cannot be profitably performed inhouse, such as providing real-time currency exchange rates for nonlocal purchasers, third-party providers are the obvious choice. |
Systems integration
When it comes to the systems integration task, however, being categorical about sources of expertise is harder. On the one hand, the inhouse team has the best understanding of its legacy systems, their organization, and behavior. On the other hand, they may have little hard experience in making them work together or in yoking them to the technologies of the Internet. |
Internet experience is growing at a fast rate within organizations, but the need to maintain legacy systems and to develop new point solutions means few internal IT teams can give their whole attention to integration issues. When committed business-to-business ecommerce is at issue, no obvious source of expertise covers all the applications of the partners. In these cases, external help is readily available from the various systems integration houses that specialize in various species of systems glue. Facility with layered architectures and component technologies are important criteria for choosing such partners. |
Outsourcing can be extended beyond systems development. Indeed, the use of partners to develop or support aspects of the ecommerce offering is an example of the extended enterprise in action. Small companies may outsource their entire business-to-consumer sales channel to one of the major portals, offering their goods and services for sale to the world without even having a single PC to their own name. |
Larger concerns may want to host most of the channel's functionality themselves, to enable integration between their Web presence and their backend order and fulfillment systems. But even substantial organizations are likely to partner with external providers for certain specialized services. The two chief services in this category are payment transactions and goods shipment. |
At the level of the channel's overall format and direction, many organizations choose to buy in design and content origination services from outside. This is often because the organization's original Web presence was built by a new media agency. |
Skills audit
The skills required for ecommerce lie somewhere between the hard, prescriptive assumptions of the general technology follower and the soft, all-purpose requirements often associated with business change. |
An example of the former assumption is the idea that anyone wishing to get involved with ecommerce needs to learn HTML or Java. It is certainly true that anyone who is seriously interested in business-to-consumer ecommerce needs to devour online experience--buying products online, comparing service levels among competitors, and forming opinions about good interaction design. But it is unnecessary to become a visual designer or an applications programmer. |
The other extreme trails a rag-bag of general criteria that it would be churlish to deny to most human activities. Certainly, problem-solving skills and customer orientation are important in ecommerce, but both have been handy since The Stone Age. Team members involved in ecommerce may need to solve problems of systems compatibility, sales message construction, or traffic variability depending on their specific roles and the makeup of the team. |
We find the key determinant skills of ecommerce in the middle ground between these extremes. Technology skills include familiarity with distributed systems and object-oriented design. Softer skills include the ability to conceive of the customer as a present force, rather than as an abstract phenomenon, and the accompanying desire to engage with customers when the opportunity presents. |
The vision thing
Above all, the most important skill found consistently among ecommerce practitioners at all levels is the ability to perceive and articulate their work as a crucial aspect of business strategy. Where it is successful, ecommerce feels like a crusade. It isn't about fashion or merely incremental benefits, but an element in the reinvention of the business. |
In the past, we expected business leaders to take responsibility for "the vision thing," while their followers made it stand up. Today, a palpable sense exists that digital connectivity puts its manipulators in control of the vision. The tools of process change, customer connection, and performance evaluation are now immediate and ubiquitous, meaning it's cheaper and faster to test an idea than ever before. Translating idea into action, through the tools of ecommerce, contributes directly to the business's development in a manner denied to earlier generations. The greatest skill lies in recognizing this power and embracing the responsibility to use it. |
Can an organization be instilled with this sense of power? It's not as easy as sending everyone away on a course to be sheep-dipped in e-age attitudes. In many ways, it's easier than that. By making the signature technologies of the Internet era freely available to employees, corporates can discover overwhelming sources of ideas, examples, and enthusiasm. Companies that frown on employees using their desktop machines to search for a car or vacation are denying the greatest source of ecommerce learning at their disposal: the experiences of committed individuals engaging in ecommerce behavior. |
Employees who use today's Web are qualifying to create tomorrow's ecommerce applications. Employees who are encouraged to work away from the office begin to experience a flavor of an extended, virtual world of work. Employees who are encouraged to research via the Internet discover new perspectives on customer desires, competitor offerings, and alternative modes of business. In this environment, a sense of empowerment grows. |
Wise corporates recognize it is better to be associated with the dawn and development of this new awareness than to let it flourish solely in a nonwork context. As the lifestyle of organizations becomes more information-rich, so the potential of their people grows. Ultimately, the greatest skill required for an organization embracing ecommerce is the capability to foster a climate of learning, experimentation, and confident imagining. |
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