Govt study blames IT for barriers to e-business

IT managers have been identified as a key barrier to the success of B2B e-business projects, according to a nine-month study sponsored by the federal government and released today.

This is because one of the main obstacles to e-business project success is engaging trading partners and getting them to connect to the new system.

To encourage adoption, the report recommends targetting business and operational executives, not IT, because they were most likely to put up barriers.

Commissioned by the Department of IT, Communications and the Arts (DCITA), the report said to: "Package systems so IT involvement in the decision making process is minimized, or eliminated altogether, as a significant enabler."

Undertaken by S2 Intelligence, the research involved 54 organizations and 12 e-business systems covering building and construction, telecommunications, manufacturing, agriculture, business services, insurance and financial services.

Bruce McCabe, S2 Intelligence managing director, said that while IT staff do raise legitimate issues such as security, in most IT projects, they actually created more problems when it came to B2B trading systems.

"The barriers are political, not technical and are around issues of ownership. When technology is being developed by another company and introduced to them they want to know where it came from rather than asking if it's good for the business," McCabe said.

"It is best to interact with operational or business staff to avoid resistance from IT."

And getting trading partners on board in a cooperative manner can be critical to the success of the project, especially when dealing with smaller organizations, because coercion can produce adverse outcomes.

"Pressure to participate from dominant trading partners is a very widely adopted strategy in industry, but can produce the opposite of the intended effect," he said.

"After agreeing to adopt, trading partners tend to not accept the system as routine in their operations, and work to avoid providing assistance in ongoing development and improvement of the system.

"It is also important that the share of costs and risks born by the trading partner are seen to be in proportion to the share of benefits they receive," McCabe said.

Duplicating business processes must be avoided at all costs, he said, as this was the strongest and most universal theme of all.

He said asking businesses to rekey or handle the same data twice kills a project although this is very common.

On the flip side, consolidating or eliminating trading processes makes an e-business system much more likely to be adopted.

One example is integrating e-business systems with financial software packageswhich small trading partners use.

"A critical success factor is pre-packaging initial demonstrations and ensuring the first introduction to the system is executed flawlessly," McCabe said.

"Early adopters in a community of trading partners have a strong influence on overall success or failure."

Two case studies are detailed in the research including the Sunrise Exchange. In just over a year, 760 insurance brokers were engaged and transacting electronically with underwriters, transforming B2B processes in an entire industry.

The research has been translated into a 56-point checklist for managers implementing these systems and copies will be available for download in coming weeks at www.dcita.gov.au

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