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The Groovy Gurus

More than half of senior executives believe their employers need a dedicated senior-level manager with sole responsibility for E-business initiatives. Fidelity Investments, Mellon Financial, and Delta Air Lines have gone that route.
John Edwards, eCFO
April 15, 2001

Generally speaking, E-commerce surveys offer precious little insight into E-commerce. Often, the polls are merely marketing come-ons dressed up as research. What's more, many of the studies simply confirm the obvious: "New study shows Web sites that vaporize visitors' hard drives tend to have lower percentage of repeat customers."

Occasionally, however, you run across a study that actually reveals something. Take a poll conducted last year by KPMG and the Economist Intelligence Unit (EIU). Senior executives at old-line businesses were asked what changes needed to be made to their companies' structure for their corporate ebusiness strategies to succeed. The response? More than half said they believed their employers needed a dedicated senior-level manager with sole responsibility for ebusiness initiatives. But when those same respondents were asked who currently oversees their corporate E-commerce strategies, 70 percent said the task was handled by either an executive committee or the company CEO.

No surprise, then, that other surveys show Web initiatives often take longer to roll out than planned, require constant relaunches, and don't always deliver promised benefits. "You need to have a senior or strategic-level position so that you can work across the organization to create a unified and coordinated E-commerce strategy," insists Steve Elterich, president of ebusiness for Fidelity Investments (www.fidelity.com).

Over the past year, a handful of companies have gone that route. Before Fidelity established its E-commerce post in September 1999, Elterich says, each department at the financial services company was responsible for its own Internet plans. This sort of balkanized setup — typical at many corporations — can make it difficult for senior management to assess the true upside of an E-commerce project. "IT is charged with minimizing risk," explains Janey Place, executive vice president of E-commerce strategy at New York-based Mellon Financial (www.mellon.com). "But the E-commerce group must see a project out. The contradiction in risk profiles makes these two functions work better if they are separate."

Further, companies often have more than one iron in the virtual fire at a time. Atlanta-based Delta Air Lines (www.delta.com) has ongoing relationships with several E-businesses, such as Priceline.com and the aviation-industry E-marketplace Cordiem. Vince Caminiti, who was named vice president of E-business at Delta in August, says that having a single executive responsible for structuring and coordinating complex deals makes sense. "By having a top-level position," he asserts, "I have the stature to interact with other core leaders within Delta and at other organizations."

Still, getting management to okay a senior-level E-commerce title can be a tough sell — particularly since the dew is well off the E-business bloom. "Companies are increasingly decentralizing E-commerce responsibilities and asking existing business leaders to handle these decisions," claims John Barrett, executive director of Russell Reynolds Associates, an executive recruitment firm. "You are seeing fewer and fewer of these big E-commerce gurus."

Which takes you right back to the KPMG/EIU survey. For her part, Place doesn't see her job going away anytime soon. "We believe E-commerce is a part of business strategy — not separate from it," she says. The Mellon Financial Web strategist concedes, however, that creating a separate function for E-commerce requires a tilt in the corporate mindset." Development of capabilities must be done across organizational lines," she acknowledges. "That's not always the easiest way for a company to function."

John Edwards is a contributing editor of eCFO.




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