Your First Task: Online Tactician

There’s a strong operational component to the CIO’s e-commerce role today: Keep e-commerce applications running, deploy new applications that the business needs, and keep costs under control. Today, most companies have their online strategies in place, according to Rochester’s Pinker. Now the focus is on execution.

Bud Mathaisel, corporate vice president and CIO with Solectron, a Milpitas, Calif.-based electronics manufacturing services provider, sees a pattern in the adoption of e-commerce that reflects previous waves of new technology deployment. "In the first wave, innovators take charge of everything," he says. Then the novelty wears off, and what was new becomes routine. "The same was true with minicomputers and PCs. When it stopped becoming fun for the people who ran it, they handed it back to IT," he says.

Solectron never had a separate e-business unit. Instead, Mathaisel’s IT group worked with teams from each functional group to find ways to use the Internet. Those teams ran their own e-commerce applications, to some extent. The functional teams haven’t disappeared, but Mathaisel’s IT group has taken on more of the technical responsibility for online buying and related applications. For instance, IT has taken over management of "collaboration environments," which are online meeting rooms employees use to work with each other as well as with customers and suppliers. The online rooms began as pilots but proliferated to the point that the company didn’t have enough bandwidth to support them. Managing network capacity wasn’t a job that users had the expertise to do?nor did they want to. Now Mathaisel incorporates the meeting rooms’ usage into his calculations of organizational bandwidth needs.

Centralized IT decision making about e-commerce has been a byproduct of the economic downturn. One of the first steps many CIOs took to control costs as the economy weakened was to impose standards on website deployments. Mathaisel consolidated hardware. He’s replaced servers that do "unique things, like the corporate portal or supplier interchange" with larger, multipurpose boxes. Joe McMakin, vice president of global IT at Air Products, an Allentown, Pa.-based chemical company, decided to replace custom-built extranets with a standard set of online services for interacting with trading partners. And he will largely control when and how those services are integrated with the company’s SAP and legacy systems.

Business unit executives in many industries have relinquished control of e-commerce applications, in an acknowledgement that the IT organization can deliver applications more efficiently. The arrangement "is a quid pro quo," says Mathaisel. The business units are "keeping functional business process responsibility, but they’re expecting the CIO to produce a more robust, lower-cost environment. As long as that equation is satisfied, everybody’s happy," he says.