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E-Business: Do Managers Demand Too Much of IT Departments?

[Berlin, GERMANY] German managers underestimate the technical demands involved in e-business projects. As a result, 75% of all such projects fail. According to Mummert + Partner Unternehmensberatung, a management consultancy, computer experts are presented all too often with an accomplished fact which they feel they can't handle. This problem will only be compounded with the increasing number of e-business projects. Nevertheless, three out of four companies are planning to bolster their sales in the next five years with such projects. Managers believe the analysts who are convinced that e-business volume will rise to 1.5 trillion dollars by 2004 in Europe alone.

Over the next five years, the German industry will place more emphasis on customer service, e-business projects and international controlling. 52 percent of those interviewed are planning to implement improvements in production. 47 percent intend to do the same for purchasing. These results stem from a survey of those responsible for SAP and IT in Germany's top 100 high-volume industrial companies which was carried out by Mummert + Partner. The IT departments are increasingly becoming the decisive factor in the success of sales activities, reductions in purchasing costs and company controlling.

To date, the companies' computer experts have been mostly involved in adding new programs to the electronic infrastructure. E-business projects, however, bring with them considerably more work - work which is often underestimated. Frequently, the necessary expertise is lacking. In the past 20 years, employees in computer departments have been working primarily with the programming languages Cobol, PL 1 and 4GL. Most of them have not received any retraining in new technologies such as Java. Due to the time pressure in e-business and the lack of flexibility exhibited by some staff, further training is no longer possible. The result is that many departments need to hire new staff. This frequently poses a problem since specialists possessing the desired skills are rare - and often they prefer to be recruited by new Internet companies where the pay is higher.

According to Mummert + Partner, a precise business strategy is the basic prerequisite to Internet success. The goals that are to be achieved through e-business need to be clearly defined before the site is launched on the Internet. Concrete steps for implementing Internet plans can be developed from findings made in the planning phase. In addition, a technology committee, including both representatives from computer departments and management, could be established to improve internal communication.