The E-team

Companies are retooling their IT organizations to tackle an explosion of E-business opportunities.

Several weeks ago, Raymond Pawlicki, vice president and chief information officer of Novartis Pharmaceuticals Corp., was preparing for a meeting of the IT steering committee at which the company’s CEO, CFO, and heads of sales and marketing would be briefed on the company’s major IT projects. As he studied the agenda, Pawlicki was struck by something. “Even though these projects addressed widely divergent needs within the company,” he says, “on a macro level, they had one common characteristic: four were pure E-business projects, and the other two had strong E-business implications.”

Even as recently as a year ago, E-business did not dominate corporate strategy sessions to such a degree. Today, at Novartis and elsewhere, it’s become hard to separate it from plain old business. But the pressure to rewire just about every business activity imaginable with Internet technologies is having considerable impact on corporate IT organizations.

Indeed, there is evidence that many companies are floundering. A survey of 53 CEOs conducted by Transition Partners Co., a Reston, Virginia-based consulting firm, found that only half the respondents consider their IT departments to be stable. The remainder said that shifting business strategies, competitive pressure, turnover, and other factors have left their technology organizations in flux.

Does the advent of E-business require substantial organizational change? Many companies now say yes, but there’s no consensus on how to restructure to best advantage. “We advocate putting the development function within IT, but in a separate unit focused on E-business,” says Tom Pettibone, a partner in Transition Partners and former senior vice president and CIO at Philip Morris Cos. and New York Life Insurance Co. That’s one answer, and a number of companies, such as Ingersoll-Rand Co., are doing just that. Some companies are critical of this approach, while others embrace first one answer, then another, suggesting that in the Internet Age, technology isn’t the only thing that changes constantly.

From IT to E-IT

While E-business often receives special treatment within the walls of organizations, some companies insist that the proper approach is to embed the necessary skills and expertise within the existing structure. At Novartis, CIO Pawlicki argues that “because E-business will soon be pervasive, we need to transform our IT department into an ‘E-IT’ department. We want a full convergence of E-business projects and traditional IT projects, and you can’t do that with two separate IT organizations.”

Making that happen depends largely on training or, more accurately, retraining. “Our approach runs counter to the way most companies are doing it,” says Pawlicki, alluding to the widely held belief that the way to get a new E-business system up and running is to hire people with Java or other Webcentric skills and throw them at the task posthaste. When Novartis decided to create a Web-based order management system that would let customers check order status and related details, it took existing programmers skilled in the arcane art of RPG programming and trained them to work with new Java-based and Microsoft E-commerce software. “It’s not true that mainstream IT people can’t cut it in an E-business world,” says Pawlicki. “Our people responded extremely well, and it was great for everyone’s morale.”

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