Beware letting IT "run the world" in e-commerce. That's the advice from Craig Barrett, president and chief executive of Intel, which in less than two years has transformed itself from a traditional vendor to a giant of e-commerce.
In an interview with Computerworld US, Barrett detailed Intel's evolution from a nominal Web presence using the Internet mainly to communicate with its 45,000 distributors, to an e-commerce force, transacting more than $US1 billion in online business monthly.
A key to that transformation was not dumping e-commerce on IT's lap, Barrett says. Although the information technology team needs to be a key player in e-commerce, IT is oriented internally; trying to change that orientation would be a mistake.
"It's difficult to take an organisation with an established set of performance metrics and then say all that's just changed," he says.
Aside from the inefficiency of that approach, there's a real danger that IT, like any organisation, would naturally optimise e-commerce for its own needs rather than the needs of external customers, he says. "The Internal Revenue Service can optimise its operation, but it will not optimise it for its customers."
Instead, Barrett chose an e-commerce champion from sales and marketing who enlisted support from IT, logistics, manufacturing and the business units. "By setting up this cross-disciplinary function and putting in business people, we brought the business requirements very quickly to the top priority," he says. "IT was then just part of the solution."
Intel is currently piloting the use of the same e-commerce technology to trade with its own suppliers. Once that's in place, Barrett will be attacking a tougher issue: the weak links between the two ends of the supply chain. "You have 24-x-7 real-time ability to commit product to a customer here; you have 24-x-7 real-time opportunity to buy raw materials here," he said, "But if the internal planning cycle takes two weeks, what have you got?"
The challenge, he says, will be to speed up the processes between purchase and sale to keep up with Internet time.
Part of the problem is outdated systems, but the more difficult part is outdated processes. "The planning cycle has to get down to a one-day time frame just like the business metrics at both ends," he says.