E-Commerce Is Changing the Face of IT

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INFORMATION TECHNOLOGY

Companies that heavily invested in Internet technologies are having second thoughts. They are realizing that the IT structure must mesh with business goals and be flexible enough to launch applications in months, sometimes weeks. Traditional IT models that emphasize back-office functions, yearlong development cycles and a separation of tasks are outmoded.

Michael Earl and Bushra Khan of the London School of Business surveyed 24 companies engaged in e-commerce in the United States and United Kingdom and found that IT perceptions and practices are evolving rapidly. They also discovered marked differences in the way established brick-and-mortar companies, dot-com startups, and e-commerce boutique companies and spinoffs see the IT function.

Today, companies recognize that IT can make or break the business. The separation between IT and "the business" is disappearing. Past IT models that focused on engineering, best practices and disciplined processes have given way to an enhanced spirit of freedom.

Another shift relates to cost. Companies that once installed detailed IT cost metrics now perceive time, not cost, as the currency. The speed of decision making, applications development, design changes, implementation and technology adoption drives today's IT function.

Those changing perceptions manifest themselves in new practices. Short-term, rolling plans are replacing long-term strategies. Uniform technology platforms are ceding place to three-tier architecture: two tiers connected by middleware (for translating data messages between the two layers, for storing processing logic and data-handling subroutines, and for establishing a gateway between ephemeral systems and more-permanent ones).

A new-venture outlook is widespread — and an aggressive use of short time spans. Some companies reported that they would not undertake any project likely to last more than three months. Also, companies are simplifying project management — even eliminating the use of project managers.

Of those practices, rolling plans, new-venture development, three-tier architecture and multidisciplinary teams are key: the first two addressing faster development; the second two, the tensions between technological excellence and business value.

Michael Earl is a professor of information management and director of the Centre for the Network Economy at the London Business School. Bushra Khan is an IT-strategy consultant at Computer Sciences Corp., headquartered in El Segundo, California. Contact the authors at mearl@london.edu and bkhan@csc.com.

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