Pace of change fuels Web plans

The agility of a gazelle is no longer good enough. It takes a chameleon to succeed in today's Internet economy.

Practically speaking, that means having the ability to change strategy at least every two months -- whether you're General Motors or the online corner grocery store.

It also means nothing short of perpetual forward motion for information technology groups because "right now, it's information technologies that are driving Internet business strategies", said Gig Graham, an analyst at Giga Information Group.

One of the key factors driving the new 60-day model is the warp speed with which companies now receive customer feedback via e-mail and Web-site-based satisfaction surveys. Companies that don't quickly respond with products or services run the risk of deletion from customers' electronic bookmark lists.

"Offering something better or new every 60 days is absolutely critical," said Elizabeth Rose, vice president of strategic planning and e-commerce at BMG Direct, an online music club in New York. "If you come back to my site and two weeks later I'm showing you the same stuff, I'm boring. I've got nothing to keep you coming back."

So over the course of 60 days, BMG offers each of its 1.8 million online members no fewer than three different, personalised pricing offers. Customers also receive new, customised buy recommendations on a daily basis, plus a top-sellers' list -- based on the previous seven days' sales -- that's updated daily.

Direct Hit Technologies, which sells Internet search engine software over the Internet, has been known to launch a half-dozen new product versions within a few days. Enabling that breakneck pace of product rollouts is an incremental software development model under which a project is never really finished.

"The great thing about the Internet is you can release a new product every day. You can release something that works -- but not as well as you'd like it to work - and then update it," said Gary Culliss, co-founder and chief technology officer at Direct Hit. "We create a product and do a minimum amount to get it working. You don't build the Taj Mahal all at once."

"Customers are a click away from going to competitors, so we need to refresh our Web stores on a 60- to 90-day basis," said Jerry Miller, CIO at Sears, Roebuck in Hoffman Estates, Illinois.

For example, Sears, which in May began selling appliances online, has since added new content and navigation features to its Web site. Later in the year, the retail giant will let customers schedule home delivery of appliances online, Miller said.

"There's a tremendous transformation going on in retail that's being driven by [the Internet]," he said.

All of which can be both exhilarating and exhausting for IT workers.

For example, on the day Frank Sinatra died, BMG's five-person development team worked flat-out to assemble and post a lifetime tribute to the legendary singer, as well as to feature special offers on every one of his recordings -- all in six hours.

On Grammy Awards night, the team worked through the night to have the winning recordings ready for online sales the next day.

"We borrowed somebody's office with a TV, ate dinner together and turned things into a party," Rose said. "We were all there to support the content developers who were pulling together content as the awards were announced."

In the real world, the music club needed four months to put together a paper-based catalogue. Prior to moving online, "our best-seller list was effectively a combination of our best guess and what we wanted to promote. We put it in the magazine, but it didn't necessarily reflect what people were buying," Rose said.

Direct Hit is keeping up with the hectic pace by hiring a new developer every other week, Culliss said. "The process here is, we hire a core group of developers, release a product, then hire a [new ] group of developers to support it," he said. The original development group then moves on to enhancements or to building other products.

In the financial services industry, "a week doesn't go by" without a big new partnership, alliance or new product offering that has a major impact on the market, said John McKinley, CTO at Merrill Lynch & Co in New York. Just last month, Merrill Lynch itself rocked Wall Street with its plan to offer low-cost, online trading by December.

Critics have hammered Merrill Lynch in the past few years for failing to react quickly to the online competitive gains made by rivals such as Charles Schwab & Co. But when Merrill Lynch finally did come up with its strategy, it moved quickly.

In February, the company acquired DE Shaw Financial Technology, a Cambridge, Massachusetts-based developer of Internet technologies for the financial services industry. A month later, Merrill Lynch began offering online trading to customers with assets of more than $US100,000.

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