I recently conducted an e-business visioning session with the executive
management team of a company in the financial industry. The inspiration
for the meeting was the CEO's concern over whether an e-business project
proposed by the company's IT department was aligned with the strategic
business opportunities offered by the Internet. At first blush, the IT
proposal seemed incremental. Its main purpose was to replace portions of
existing systems with Web-enabled versions. The proposal was cost
justified by the amount of operational savings it would produce.
We started the meeting with a review of the company's core
competencies, its current services, and the composition of its market. A
spirited discussion ensued, and most of the conversation had little to do
with technology. When viewed in a broader business context, it became
clear that the Internet technology was strictly a tool, albeit an
important one. It turned out that executive goals were focused on
expanding the size of the company's market and finding new services to
offer to that market. The CEO was looking for ways to double company
revenues. When looked at from this perspective, it was easy to understand
the CEO's concern over the incremental appearance of the IT proposal.
The next stage of our session captured a set of potential business
initiatives to accomplish the CEO's goals. We didn't let IT considerations
constrain these initiatives. Instead, we ranked the initiatives by their
business benefit first, followed by technical implementation
considerations. Through this exercise, company executives realized the
following:
- By reducing the costs of distributing the company's products and
supporting its customers, the Internet solution greatly expands the
pool of customers that could be served profitably.
- The Internet platform makes adding new products and services a
relatively trivial exercise, and it will enable the company to extend
its offerings through partnerships with related ventures.
- Because of these two factors, some of the best and
fastest-to-implement initiatives came from revisiting ideas that had
been previously rejected as financially unattractive due to
operational and sales costs.
- By far, the bulk of the implementation effort for these initiatives
fell outside of IT and involved shifting the company's sales,
marketing, and management approaches and forming relationships with
new partners and distribution channels.
- The e-business project originally proposed by IT could support the
chosen initiatives "as is" or with minimal modifications.
The end result? If implemented successfully, the initiatives identified
in the session would more than meet the CEO's objectives. The company is
planning to move quickly on those initiatives while conducting feasibility
studies on "next phase" initiatives. The IT project will receive
greater emphasis, and the question of alignment has been put to rest.
The lesson to be learned here is that to gain executive support and
buy-in on e-business initiatives, IT has to move beyond technology to
understand and articulate the business ramifications of its case. In this
situation, operational efficiencies translate into lower costs per
customer, which in turn translates into a much larger potential market.
The value of this larger market is actually 50 times more than the
anticipated operational savings!
