Strange Bedfellows

Today, thanks to the Web, the once-distinct lines between functional areas are blurring.

Until a couple of years ago, Amway's IT staff - "the Eggheads" or "IT Techies" as sales and marketing director Greg Bowman likes to call them - were as mentally remote from the rest of the business as they were physically removed.

Not only did they have little understanding of the business they were in, they didn't even work within hailing distance of the business units they were meant to serve.

E-commerce has changed all that. Now the IT people understand Amway's business raison d'être as well as anybody in the company, and part of the IT department is even physically located within the marketing department. But it's not just IT that's become more at one with the enterprise. Amway's finance people can quote you chapter and verse of Amway's e-commerce strategy. They have to know it backwards, because theirs is the vital role of continually checking that the strategy makes purchasing sense for the consumer and financial sense for the company.

In fact, Bowman says, there's now a level of cohesion between all sections of the business, especially the marketing, IT and business relations teams, that never would have been possible before the Web.

Welcome to the end of the corporate turf wars. Organisations that forge powerful new cross-functional alliances as they prepare to launch their e-commerce projects find such collaborative efforts not only help them overcome reservations about Web-driven change and win more support for Web-initiatives internally but also help the company better focus on the end product. That in turn means faster rollouts of e-business offerings and opens the way to vastly improved customer service.

Changes, Changes

In the traditional bricks'n'mortar companies of days gone by, things were relatively simple. Marketing people got leads to pass on to salespeople. Salespeople used those leads to sell stuff to customers. Customer service people supported said customers. Human resources people looked after all three groups, while finance did its own thing but kept a close hold on the purse strings of every group involved. IT did its own thing too, but often had no idea what everybody else in the organisation did, let alone why they did it.

Today, thanks to the Web, those once-distinct lines between functional areas have blurred and collaboration has become the Holy Grail of best business practice. Groups like sales, marketing, customer service, IT and human resources are setting aside politics and forging new alliances unlike anything ever seen before.

For instance, at the NRMA there are ongoing e-commerce projects in each of the three core areas of the business: business-to-consumer, business-to-business and business-to-employee.

General manager of information services Gary Dransfield says the e-commerce business unit acts as a catalyst to bring together the relevant parts of the organisation to deliver e-commerce projects.

"Within our organisation we have a wholesale, retail, or a manufacturer-distributor view of the world," Dransfield says. "The distributor owns the marketing, the brand and the channels. The manufacturer owns the product design and delivery. E-commerce acts as a broker to bring them together into e-commerce deliverables."

In today's e-commerce-driven company, teams are less interested in fighting over ownership of the customer than in creatively finding ways to meet those customers' needs.

Take the situation at Dun and Bradstreet, where e-commerce has been a preoccupation for several years. D&B considers itself to be at the forefront of e-commerce. The first company in Australia to develop an extranet, today it conducts 80 per cent of all transactions via the Internet.

"A lot of companies talk about being Web-enabled and having an e-commerce strategy, but we started practising it three years ago," says Christine Christian, managing director D&B Australia & New Zealand. "We are recognised as an organisation that really walks the walk - we don't just talk the talk."

As a provider of information D&B capitalised early on the Internet as technology to deliver its product, Christian says. Technology has also allowed it to add value to its data and deliver it to customers far more effectively.

But the move into e-commerce has also had other effects. For one thing - as at Amway - it has forged a strong partnership between business and IT and helped IT become a key driver of strategy.

"Before that point, the IT unit was a separate unit to our business," Christian says. "It was just a provider of a service to us, and that's the way it was treated and positioned within the organisation.

"But IT needed us as much as we needed IT to execute our e-commerce strategy. So we really forged a partnership and we work very closely together. Whenever we have any ideas, or customers come up with a special need, we bring IT into the strategic planning process."

But there's more. Because the company is now pitching larger pieces of business than ever before, finance has likewise moved into the e-commerce fold. Because the Internet is now being used as a sales channel, the sales department is involved in development of e-commerce strategy. And since the operations group now has to work faster and create new ways of gathering information, it is also on board.

To cope with the new cross-functional alliances forced on the company by the Internet, Christian says D&B has "democratised" the strategic planning process within the organisation.

"We've selected a group of 12 people representing all parts of our business - not at senior management level but down in the organisation - and they have got together to develop our e-commerce strategy, not only now but in the future," she says.

The D&B program is called Beyond the Horizon. Here, team members examine the likely long-term needs of the business community, with an eye to developing strategy to meet those needs. As a result, D&B is now focused on eight strategic areas. Each of these has a business owner - one of the original 12 - who in turn has solicited volunteers that work in teams to execute D&B's overall e-commerce plan.

"What it has meant is that everybody in the organisation is involved in executing the plan, developing the plan and delivering on the plan," Christian says.

It must be working. Christian says many businesses are using the Dun & Bradstreet model as a case study and are looking at ways to replicate it within their own organisations.

Peace in Our Time

Until e-commerce began to loom so large on the business horizon the strategic planning process was limited to the senior management team of an organisation. This frequently proved unfortunate, since most members of these teams were prepared to admit they didn't have all the answers.

E-commerce gives those at the coal-face - the ones who both intimately understand the customer and the details of the problems involved in delivering to that customer - a chance to help drive strategy also. Critical to those efforts are the three Cs: communication, collaboration and compromise.

Take the situation at Caltex, a company that's energetically reviewing ways in which e-commerce might both add value to current offers and also produce extra revenue streams. The company's first foray into the e-commerce sector was, Australia's only Web site devoted to Australian road travel: a kind of one-stop shop for drivers.

Caltex adopted a proven business model approach to the venture, under which the business must prove itself each step of the way in order to obtain additional investments.

Furthering that model meant developing appropriate alliances and gaining buy-in from numerous areas of the business, says e-retailing manager Michael Ridley-Smith.

Caltex runs some Caltex stores. Franchisees run others. Dealers who run their own properties manage still others. Each group has internal business units within Caltex to look after them.

With some projects requiring the company to get buy-in from business managers in three separate areas, with all the concomitant debates about whose budget should pay for what, getting buy-in can be "a lot of fun", Ridley-Smith says.

To maximise collaboration and minimise conflict, Caltex holds regular cross-functional planning days where the e-commerce function communicates its plans and activities and gets buy-in and feedback.

That solves some problems but creates others, Ridley-Smith says, not least in raising expectations about e-commerce.

"It's difficult because you want to keep things to yourself and you know as soon as you start telling people, they are going to start talking about it, even internally, and that can raise expectations internally too early.

"But it's important to raise some expectations internally. At our most recent nationwide marketing conference it was important for staff morale in the marketing division of the company to hear that the company was pursuing opportunities, even if we weren't able to tell them precisely what these were.

"They want to know that their company, which is quite likely to be classified a rust economy company, is doing innovative things and thinking about ways in which the new economy can be worked to our advantage."

Ridley-Smith also occasionally presents e-commerce proposals at regional meetings to ease rollout and also communicates as broadly as possible on the intranet.

"It goes without saying that when we go live with some of the things I'm working on, we will be trumpeting our horn loudly internally, just as much as externally, because there's nothing like having 2000 more ambassadors," he says.

Mining for Gold

Mining giant WMC's move into the new economy started with the selling of nickel and cobalt over the Internet. It became one of the first companies in the world to trade metals online.

Group manager information Einar Vikingur says WMC gives central direction on e-business policy through the information management function, but the business units have to pay for individual initiatives.

"We have a number of business units - Nickel, Gold, Copper, Uranium, Fertilisers and so on - and each has its own e-commerce projects up and running.

"What happens there is that whilst the strategic direction and the will come from the Information Management function, what we do to make sure that each project has a business case is to say they must be funded separately by the people who want them. That means each case is scrutinised rigorously."

There's an information manager for every business unit. They get together fortnightly to discuss ideas and proposals and take them from there.

"In other words, we make sure that while there may be individual projects, there's always a corporate overview to make sure that we have an overall direction," Vikingur says.

"It works very smoothly, mainly because there are quality people involved and everyone's got the company's interest at heart."

Six Sigma Quality

Cross-functional collaboration comes much easier to some organisations than to others. General Electric threw out its old business models some time ago, well before it began any e-commerce initiatives. It recognised that globalisation and instant access to information, products and services were changing the way its customers conducted business.

The new GE approach recognises that today's competitive environment leaves no room for error. The company has gone all out to delight its customers and relentlessly look for new ways to exceed their expectations. The prime vehicle for the effort has been its Six Sigma Quality program, a highly disciplined process that helps it focus on developing and delivering near-perfect products and services and to look at its business from the customer's perspective, rather than its own.

Now its e-business push is building on that firmest of firm foundations.

GE's e-business initiatives can be divided into three different categories: e-buy, e-make and e-sell, with each separate effort requiring the e-business area to interact with different collaborative partners, from finance and marketing through to risk function and IT.

E-commerce leader Jim Cock says as a learning organisation with a strong focus on the sharing of best practices from around the world, GE's business units were well used to working in cross-functional teams long before the organisation began its e-commerce efforts.

"The Six Sigma initiatives involved processes that made sure that you had collaborative teams from different functions that worked on a particular project. As we move into e-business we can use Six Sigma, because it helped us to map processes and things like that in the first place. When you're looking to digitise processes and so on, obviously that is the bedrock upon which you build."

But he says e-business is extending the understanding of other units, which was already beginning to emerge under Six Sigma.

"In particular, the IT area is learning more and more about how the business functions and which areas are the most critical," he says.

It seems there are many more benefits from e-business than just the obvious ones. After all, getting any organisation working as a cohesive, effective whole where every member of the team has a role to play and an understanding of the business, has to be for the good of the business. Leading organisations expect to see much more of it. ©

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