FRAMINGHAM (08/15/2000) - When Made2Manage Systems Inc., an Indianapolis-based provider of ERP systems for small- to medium-size manufacturing companies, decided to step up its B2B e-business offerings, senior management pulled a dozen people out of the 80-member IS department to form a separate "Eport" group. Their mission has been to launch and maintain m2mEport.com, a slick new website that houses Made2Manage's Web-based tools and services.
Other companies have taken the same tack, splitting their IS departments into two groups: One to focus on legacy systems and the other to get the website up and running.
"We were finding that we weren't able to change perspectives and focus on new technical skill sets as quickly as our customers needed us to," says Christopher Clapp, vice president and general manager of Made2Manage's Eport group. "We had to find a way to focus on Web technologies and strategies without distraction from other technical objectives."
Clapp and Gary Rush, vice president and general manager of enterprise business systems, the group responsible for the more traditional client/server enterprise applications, met first to discuss how the two groups would function and which employees would work best in which group. They then approached select employees with the Eport idea, and Clapp created the new department.
Sounds like a good way to go. But such a split can result in morale problems if a company isn't careful. "Those left behind [in the enterprise systems group] may feel that it is less exciting to work on the legacy applications than on the brand-new, latest and greatest stuff," says Rush.
To squelch the perception that the Eport group has more fun, Rush has to make sure that his own staff is working on exciting projects, and both managers have to resist the temptation to recruit star employees from each other. "If this were a laissez-faire system, we'd be stealing from one another," says Clapp.
"But while it may be in my personal interest to steal his people, it's not in the customer's best interest or the company's, so I don't."
For the most part, the split is working well for Made2Manage but only because Clapp and Rush communicate regularly about project priorities and potential personnel conflicts. What about you? Have you split your IS staff in two? Are the rewards worth the risks? Here is a sampling of the responses that I received. You can respond to me at firstname.lastname@example.org or via the Web at comment.cio.com.
Here's a novel thought: ask your department how they believe they would work best to achieve the department's objectives. The result is that you get feedback that you may not have considered, you build a sense of team--regardless of the final decision--and you will have more buy-in on that final decision. When was the last time you were successful in any significant effort without buy-in from the vested parties? John Schneider Director, IT Radix Communications Saint Joseph, Mich. email@example.com A CIO considering a serious b2b or b2c undertak-ing may want to consider an even more radical approach than simply splitting the existing IS organization.
Such an approach usually leaves both organizations under the same corporate culture. In other words, the same culture that drives the business-as-usual model would continue to drive the new e-business.
A more radical approach would be to create a separate enterprise, driven by business and IS folks who do not bring the old culture with them, but who instead bring a fresh perspective about how to change the business model.
Operating with their peers in their own physical environment, they could bring a fresh approach to marketing, distribution, HR and so on.
E-business is as much about corporate change as it is about technology. The real success stories of the future will be from those companies that take this approach. Steve Terry VP and CIO Beneficial Life Insurance Co. Salt Lake City firstname.lastname@example.org We did this about four months ago. two teams were formed out of one: IT and IT development. Two senior members of the IT team were moved to the IT development team, and an IT development director was hired. I then promoted existing IT team members and recruited three new members from inside the company to provide technical support on our internal line-of-business systems. The IT development director then ramped up his team to be more Web focused. We meet on a weekly basis to keep the communication flowing.
This has worked well for us mainly because of the good relationship the IT development director and I have and also because the executive team fully supports it. Jeff Marsalis Director of IT iGo Corp. Reno, Nev. email@example.com We have a similar instance where we had to expand our department to support numerous B2B and e-commerce projects by complementing implementors from different departments.
When you start creating new groups to manage new technologies, the department and the single goal of the company are compromised. Rather, you should allow your staff to take ownership and have them manage such technologies, and hire people who are dynamic enough to support the project and to strengthen your core business and department.
I believe in giving my staff more challenges and involving them more with the business. Gene Yoo Divisional Network Manager Coca-Cola Enterprises Los Angeles firstname.lastname@example.org I created a web group silo more than two years ago. The team is still under the CIO hierarchy; however, they have a good deal of autonomy.
The result has been remarkable dynamism and swift mastery of Web realities. In such a rapidly changing and ultracompetitive environment, anything less than total focus will result in substandard results.
The lesson learned here is that not all silos are bad silos. Hale Johnston Executive Vice President and CIO Dodson Group Kansas City, Mo. email@example.com Why Split Up Your IS Department?
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