Survey finds companies lack e-commerce blueprint

Despite all the sound and fury that's surrounding e-commerce, key managers in most large companies are still unclear about e-commerce strategy, and their people lack e-commerce skills. And e-commerce is causing a lot of upheaval in organisations, but so far few seem to have developed a blueprint for how to handle it. Those are among the findings of a recent survey of more than 300 major companies conducted by New York-based global management consultancy Towers Perrin.

Of particular concern is the shortage of "e-literate" people in the workforce. Nearly nine out of 10 respondents said not enough of their key managers have e-commerce skills and insights.

"There's a big reliance on the latest technology buzzwords, without understanding what they are or the ramifications to the company," an e-commerce manager at a major retailer explained. "Management above the worker-bee level doesn't understand."

The survey also found that even when people possess several years' experience, that doesn't guarantee that they "get it." Companies with more than two years of e-commerce under their belts indicate that their chief concern is still that too few key managers have Internet skills or insights.

Sixty-six percent of respondents said they are struggling to attract people wanting to take advantage of online opportunities. "There's not a lot of experience out there," said Mike Coleson, an applications manager at Educational Credit Management in St. Paul, Minnesota.

The survey also revealed that traditional organisational structures and cultures tend to inhibit progress in e-commerce. Nearly three-quarters of respondents acknowledged that their organisational structure slows decision-making. "We have several layers of management that you have to get through," explained the e-commerce project manager. "And depending on the knowledge or interest level as you go up through the chain, things can get stymied."

More than half of those surveyed said their culture is a barrier to getting things done. "People are very protective of their area," said an e-commerce manager at a major manufacturer. "When you're changing the way you do business, they feel very threatened."

Although the need for change in organisational and management structures is understood, not much has taken place so far. But the degree of change anticipated over the next two years indicates how seriously corporate management views e-commerce issues. "We're looking at organisational changes," the manufacturing manager said. "We're aligned along product lines, but e-commerce covers everything, so you have to figure out how to reorganise to take care of that."

Change isn't easy, but the stakes are clear, she said. "Our success is going to depend on how quickly the company can effect these kinds of changes."

E-commerce also promises to shake up business processes. Less than 20 percent report that e-commerce concerns have forced significant changes to processes such as advertising, market research, supply-chain management, account management, customer tracking and after-sales support. But more than half anticipate such changes in each area within two years.

"We'll be re-evaluating our old batch-processing environments and moving toward real time, where we process data as we receive it," the retailer said. "We're going to see process changes associated with having to do more business-to-business over the Internet as opposed to EDI [electronic data interchange], and we'll be offering processes in multimedia: traditional and EDI for our large trading partners, and alternatives on the extranet for others."

There is no clear home for e-commerce in the corporate structure. Currently, information technology is leading marketing by a hair, but there's no commonly accepted understanding of who should "own" it. "We are extremely fragmented," the retailer reported. "We have the business-to-business extranet owned by one group, a public Internet site owned by another. A new business-to-consumer effort will be managed by a third group. It's really out of control."

Most companies are playing e-commerce close to the vest, with 90 percent or more of those surveyed maintaining internal control of customer service, customer data management, ordering, payment and fulfillment. The only exception is technology, where 44 percent have outsourced Web site development and 45 percent, have outsourced software development and systems integration.

Join the newsletter!

Error: Please check your email address.

More about Towers Perrin

Show Comments