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Grow Your Own Way

With scarce resources, companies are rolling out E-commerce projects ever so slowly.

Some companies focus on customers first and let E-business strategies evolve from there. At Bristol-Myers Squibb subsidiary Oncology Therapeutics Network (OTN), that has meant combining more than 30 separate customer databases into one sophisticated Web-based version that helps the company distribute cancer drugs and related services more effectively. In the decade since its founding, San Francisco-based OTN has evolved into an almost total E-business. “You still need feet on the street,” says vice president and CIO Sue Dubman, “but aside from our sales force, much of our resources are being channeled toward our E-business efforts.”

OTN specializes in providing cancer drugs to community-based oncology practices, a growing market now that chemotherapy has become largely an outpatient procedure. While the health-care field is somewhat immune to conventional economic pressures, it does feel its own form of pain from intense competition and regulatory requirements. OTN hopes to preserve its margins by making itself indispensable to customers. To do that, it offers a host of services, most of them delivered electronically.

Content Is Not King

Two years ago, for example, less than 25 percent of OTN’s business (by dollar volume) was conducted electronically. Now the company does more than 75 percent of its business that way, and believes that by next year it can crest 85 percent. “Customers find it faster and simpler to do business this way,” says Dubman, “and it allows us to provide them with enormous detail on what they’ve bought, and when.” In fact, in its early days OTN was simply a retail distributor of medications. Now it supports oncology practices in all aspects of inventory management, tracks the status of orders, provides invoice record-keeping services, and continually polls customers as to what related services they’d like OTN to perform. “We’ve become a services marketplace,” says Dubman, “and that all hinges on E-business technology.”

Even a company as reliant on E-business as OTN, however, feels certain constraints. Dubman says that during the past 18 months, the company has performed a sort of triage, concentrating only on enhancements that seem tied to revenue generation or that are needed to keep the systems running. “We are primarily focused on the transactional nature of the system,” she says. “For example, we’ve scaled back plans to provide lots of content on the site. That might help customers in certain situations, but it’s hard to see how to make money on that. Look at how many medical content sites have gone under.”

David Yokelson, an analyst at Meta Group, a consulting firm in Stamford, Connecticut, says the same attitude prevails at many companies. “Everyone wanted a good-looking, dynamic, high-performing Web site,” he says. “Now many companies realize that they’re better served by concentrating on streamlining the ‘undernet,’ the whole rash of intranets that create a lot of shadow IT costs. Companies that simplify their undernets get immediate payback.”

Despite the tight purse strings, in fact, Filtronic recently paid a systems integrator to consolidate several of its Web sites into a single system, providing better customer service while cutting maintenance costs. That may be good news for Darst, who has not given up on his E-business ambitions. “In the absence of financial capital,” he says, “we’re investing plenty of intellectual capital. We are studying a number of E-business systems very closely, so that when we do have the budget, we can take action.”

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