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September 27, 1999

CIO Forum
Build With Growth In Mind

Remember to be innovative and differentiate your product, and you may even have time for lunch

By Debra Chrapaty

hat's the nature of Internet business? More than anything, it's speed--speed of development, speed to market, speed to get your brand in the mind of your customer base. Way back when, before Internet time, things seemed a tad more manageable. Product innovation meant six months to develop and another three to pilot, test, and implement. There was time for lunch and maybe even a few other things.

That's no longer true in the age of Internet business. The demand for new products and features has shrunk the six-month de-velopment cycle to six weeks--or less--all while offering exciting and reliable products. So how does a company manage this insatiable appetite for quality, fast-moving innovation?

First, let's make a distinction between products, architectures, and innovators. Products are the key to differentiation. But it's hard to stay differentiated in cyberspace. Every day you are in a Web war where barriers to entry and innovation tend, at least initially, to be lower. Innovation--and differentiation--may mean life or death to your company.

Like all businesses, you must listen to your customers to win the Web war. If you emphasize quality and build a strong brand, then your customers will share your passion about your products and will be willing to help you improve them. So listen, learn, and take action. Remember that the Web lets you reach out and touch your customer, one-to-one. It's a perfect feedback tool--not just a sales medium.

Innovation has many faces. It may be present in an advanced feature set, a site redesign that makes your product more intuitive, or changes in servers or networks that offer better speed or performance. To be innovative in the world of electronic business, you must rely on a flexible architecture. But choosing among the hundreds of companies offering tools for fast, reliable E-business development isn't as simple as it seems. How do you leverage their tools? How do you choose?

I believe that the rule is to build for innovation. Don't be seduced into creating a solution by "buying the right tools." If you select your technology in isolation--without an overall scalable architecture--you end up implementing a bunch of expensive, disparate tools. Review the drivers of your business and draft an architecture blueprint before selecting individual tools. This applies to both your infrastructure and application designs. Let your blueprint and business self-select tools that enable product innovation.

But who executes on innovation? Here you have choices. You can do it yourself or select an outsourcer that can deliver a reliable product faster and better than if you did it yourself. Even for an Internet company, using outsourcing services can be a good choice, especially when you're in the startup phase of your product development.

Staffing up is tough, and everyone is competing for the same talent pool. If you develop with the help of outsiders, be sure that you're creating a sustainable model with a talented internal pool to maintain your product. Furthermore, be proactive about the architecture you select. Even if a partner has recommended your architecture, it will become your production environment that you'll rely on to be scalable day-in and day-out. Make sure your environment is one you can live with and grow with for the long term.

There's a Web war going on out there, so let your customers drive your innovation. Let your business goals drive your blueprint. And of course, let your blueprint guide your innovators. Then maybe, even in Internet time, you'll have time for lunch.

Debra Chrapaty is CIO of E-Trade and president and chief operating officer of E-Trade Technologies. She was InformationWeek's 1998 Chief of the Year.

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