Should CIOs be Chief E-Commerce Officers instead?

A recent quote from Gartner Group will come as no surprise to IT professionals: "E-business will be seamlessly merged into the core business of any enterprise. That is the next natural progression of IT's role in business." But as the I in IT is replaced by e, what will be the role of IT management?

IT's role has always been ambiguous. Some executives still view IT as a necessary evil; few CEOs were ecstatic about spending unplanned millions of dollars on Y2K just to continue doing business as usual. Others consider it to be an important, albeit unglamorous, support function. Yet others realise that technology and the Internet are the keys to the company's future competitiveness. What makes it difficult for IT is that all of these people work for the same company.

Add to this the diversity of tasks and systems that IT managers must master. Running a LAN has little in common with developing e-commerce applications, yet most people lump it all into "computer staff responsibilities." A large percentage of current IT professionals are focused on ERP and Y2K issues. Are these people ready to implement a working electronic enterprise? And let's not be fooled by product announcements that describe how easy it is to create a Web-centric enterprise. These are uncharted waters, and it will be a while before making your enterprise Web-centric is as "easy" as, say, installing SAP.

Will business units take charge of strategic Web initiatives? This approach would result in a collection of applications that may not integrate with the existing infrastructure. And business unit executives are more susceptible to the notoriously unsubstantiated claims of technology vendors.

My prediction is that the IT department will stay in charge of important IT technology initiatives. But to do so successfully, the IT organisation should be split into separate units for infrastructure and e-commerce, with the former serving as enabler and the latter as trailblazer, akin to the relationship between marketing and sales departments. Whether incumbent CIOs remain in charge of both units will depend on their ability to transform themselves from CIO to CeO - chief e-commerce officer - by adopting new traits and being proactive in creating the new organisational structure.

Successful CeOs will have to play on the revenue side of the business. They will be judged on their ability to make money. This means that they will have to understand the company's market position and sales process, work closely with the sales and marketing organisations and analyse the ROI (return on Internet) not as loosely defined cost savings but as hard profit increases.

The CeO will also be nimble. As Web technology rapidly evolves, the CeO's ability to quickly switch to "best-of-class" technology will affect the company's ability to succeed in the marketplace. However, it will remain important to know when not to switch. It takes a wise CIO to conduct due diligence, but it takes a true CeO to make the bold moves and hedge the risks.

Finally, the CeO needs to combine the best traits of commercial software product vendors and internal infrastructure developers. The vendors stay ahead by adding new features, courting clients, analysing markets and looking for new niches. The internal developers succeed by ensuring the reliability of their deliveries.

Should the CIO and the CeO be the same person? We're talking about hugely diverse responsibilities and diverging priorities. I believe that two organisations are needed, one for information technology and another for electronic technology, but only one person should be in charge - assuming, of course, that that person is ready and able to take on the new challenges. Splitting such a position may lead to diverging technology directions, lack of integration, bickering and low morale. But as time goes on, the distinction between the infrastructure and "extrastructure" will become blurred, and these two IT organisations will merge again. It is, after all, just the computer staff.

Alex Karpovsky is president of Kanda Software, a Concord, Mass., Web application development company. Contact him at alexk@kandasoft.com.

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