Most companies have been forced to make important decisions about their business model over the past decade, with many – including travel specialists – already looking at where their e-commerce strategy is going next. John Kavanagh investigates.
There seems to be something about web projects that makes many companies ignore the IT management lessons that have been learnt the hard way over the 55 years since the birth of business computing.
Those lessons are all the more important because e-business initiatives raise new technical and company culture issues. The web is often being bolted on to old but established and stable business systems that have happily handled orders and stock control for years.
Some companies take this opportunity to replace their entire IT with a new e-business system covering the whole organisation. Meanwhile, there is an opportunity for new thinking to look beyond the existing ways of doing things.
In the light of all this it is disappointing that a new UK study of e-business projects, carried out by IT consultancy Carroll Consultants with Exeter University, found that only one third were fully successful – they were on time, within budget and met the business specification.
The success rate was better than that for IT projects as a whole, which various studies have put nearer 20% – but even so the research found 63% missed one or more targets: 60% of these were late; 47% went over budget; and 27% did not fully meet the specification. Another 4% of projects failed altogether.
Researcher John Carroll highlights the fact that success factors from IT projects down the years applied equally to e-business developments.
“The encouraging conclusion is that traditional project management processes and methodologies are alive and well and just as relevant to e-business projects,” he says.
In particular his research found that the list of issues critical to success was topped by senior management support and full user involvement.
Other success factors that will be familiar to seasoned IT specialists included stating the project scope at the outset and then controlling any changes to the scope, drawing up a project management plan, estimating the resources for each activity, planning project communications, and then monitoring and controlling the project work and the schedule.
But even though the success factors are well-established and well-known, they too often seem to go out the window in e-business projects, according to a separate study by the Sociotechnical Group of the British Computer Society, Europe’s biggest IT professional body.
Its research found e-business developments being dominated by IT people and little attention being paid to human and organisational issues.
Other criticisms from those questioned included ill-specified objectives, problems of managing change, a loss of sight of business reasons for e-business, and missed opportunities.
This study, like Carroll’s, highlighted senior management understanding, vision and leadership as vital, pointed to the need to ensure technical staff and end-users were properly trained, and identified a particular need to focus on customers, who would have access to a company’s systems.
“Many of the issues are not unique to e-business: they are old problems,” the Sociotechnical Group report remarks. “Nevertheless, there is concern that many businesses have forgotten earlier lessons about good practice and failed to apply them to their work on e-business.”
It adds: “There are some key novelties in e-business that will require cultural changes in how businesses and the people in them think, behave and organise. These arise through changes in speed, distance, time, cost, customer expectations, data visibility, scope, business models, competition, and systematic thinking.”
There are lots of issues here – but the Carroll Consultants’ study suggests that the traditional “keep it simple” approach offered the best hope. Carroll found a marked correlation between e-business project length and success.
Projects lasting less than six months were the most successful. Then those lasting six to nine months – and none of the projects lasting more than nine months was fully successful.
The Sociotechnical Group research broadly supports this finding, recommending companies consider a “learn as you go” approach, undertaking changes in manageable chunks.
This approach, and in particular building on the existing IT and organisation, has been highlighted by some industry observers, including the Gartner research group: “One of the biggest basic mistakes organisations make when implementing an e-business strategy is to completely redesign the business to become an e-business.
“E-business is not a binary switch from traditional to e-business. The key to success is mix management, where the e-business and traditional business models co-exist and are tailored to fit the market they address.”
This approach was adopted by Stapleton’s (Tyre Services), when it moved into e-business – not least because it did not want to ditch its existing business systems. This was despite potential issues around linking its proprietary software package and non-standard old database to the web. Since then the company has developed its e-business initiative to improve some business processes – both for itself and for its trade customers.
Stapleton’s experience also shows the value of using an e-business initiative to look beyond the existing ways of doing things – but without scrapping the organisation and starting from scratch.
“We didn’t want to replace our business system, a package called Tyreman, because it was proven and fully integrated,” says IT manager Andy Scaplehorn. “It integrates sales orders, warehouse management, accounting, stock control and business intelligence. We went for the cost-effective approach of getting software to combine our legacy system with a web application.”
That software was from specialist company Transoft. Its Component Adapters enable systems written in older programming languages to connect to the web and other newer applications.
“The Transoft middleware has enabled us to use modern technology on an old database,” Scaplehorn says. “The use of such software meant “a sharp learning curve”, he admits, although once installed the overall system “pretty much looked after itself”.
Stapleton’s used another specialist company, EBS, for the web application and site design. “The site is not very pretty: it’s designed to be functional,” Scaplehorn says.
Having used specialist companies to get into e-business, Stapleton’s now does much of the further development itself through its seven IT staff. They have been trained in Microsoft Active Server Pages and the Java programming language for developing and programming web pages.
One aim from the start was to handle a fast-growing number of orders without similar expansion of the call centre. Product information is now put on the website from electronic documents, removing the need for phone calls. Trade customers can now look at their Stapleton’s accounts and invoices. Online ordering now accounts for a fifth of trade orders, or £2 million a month: this is the equivalent of 60,000 phone calls a month, or more than 12 extra staff.
Trade customers have been able to improve their service to their clients too. They go online to Stapleton’s to check tyre availability and place orders while on a call from a customer; previously they had to call Stapleton’s and then phone a customer back.
Stapleton’s has proved the value of observing basic IT project management tenets in an e-business initiative by keeping it simple and building on what it already had. Its success has helped it become the market leader as the UK’s biggest wholesaler of car tyres.
Keys to e-business success
Top management support, understanding, vision and leadership
Full end-user involvement
Preliminary project scope statement
Project management plan
Activity resource estimating
Empower the team
Monitor and control project work
Control changes, especially to the project scope
Institute stage or project closure
Learn as you go, be pragmatic, undertake changes in manageable chunks
Skills training for technical and end-user staff
Technical and end-user staff education in what e-business means – the potential and the issues
Focus on customers and appropriate business models for different circumstances
Sources: Carroll Consultants and British Computer Society Sociotechnical Group
Questions for management
Q. Why are we doing this?
Q. What contribution will this make to overall business strategy?
Q. Am I prepared to devote enough time to understanding and monitoring this initiative?
Q. Are my expectations, especially of the timescale and budget, realistic?
Q. Have we clearly recorded the most important requirements?
Q. Am I confident that I have people with the right skills and knowledge to handle this project?
Q. Have we done something like this before?
Q. Do we understand the risks?
Q. What are we doing to manage the risks?
Q. How would this project be affected if the market changed or a new technology became available?
Q. Am I managing the organisation in a way that is conducive to project success?
Source: The Challenges of Complex IT Projects, by the British Computer Society and the Royal Academy of Engineering (www.bcs.org/statements/royal)