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September 27, 1999

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E-Business Moves To Center Stage

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Y2K concerns are easing, so executives are ramping up for selling via the Web

By Gregory Dalton

hat a difference a year can make when it comes to IT advancements. Just consider the consumer goods industry. Many IT executives in this business were sitting on the fence last year when it came to E-commerce-but these days, you're likely to find them crammed into boardrooms discussing Internet-commerce plans.

One reason is that most year 2000 problems are now largely under control, so more attention is being given to the subject of launching E-business ventures. But more important, many in the industry have a clearer view of the benefits and a stronger understanding of how to approach E-business-especially companies whose products and services cannot actually be transmitted or delivered by an express shipping company.

"It's pretty hard to get a UPS guy to pick up one of our refrigerators and deliver it to a home," says Edward Wojciechowski, Maytag Corp.'s VP of IT, who admits he was initially skeptical about what the Internet could do for the $4 billion Newton, Iowa, appliance maker. But he's changed his attitude. "I admit, I'm a convert," he says. "I've gotten more excited because the Internet is now becoming understood" within the company, and various departments are starting to "wrap their minds" around what the Internet means for them.

"Everyone has gotten a whole lot more comfortable with it," says Patrick Zilvitis, CIO at Gillette Co. In April, the $10 billion personal-care products company, known for its own brand names as well as its Oral-B and Parker divisions, began experimenting with electronic sales to consumers via a third-party distributor using a Web site.

Gillette is close to completing a global SAP enterprise resource planning implementation in North America. The Boston company then plans to roll out the software in its European and Asian operations. Data in the SAP system will serve as the basis for much of the company's Internet efforts, such as allowing distributors to check order status.

Beaulieu of America LLC, a $1.1 billion carpet manufacturer in Dalton, Ga., is trying to figure out how it can use the Internet to improve and enhance communication among its 20,000 customers, including resellers, distributors, and retailers.

"One of our top priorities is to provide information to our customers via the Internet," says Mike McTaggart, VP of IT at Beaulieu. This fall, the company will let nearly 20 companies view product information via a password-protected Internet site and then gradually expand it to all customers. "We are taking it slow," McTaggart says. "We want to be able to learn as we implement."

For many companies in the consumer- goods industry, establishing E-commerce initiatives is a matter of timing. "We haven't focused too much on the Internet in the last 18 months because we've been focusing on Y2K and our global SAP ERP implementation," explains Tom Hennigan, CIO at Polaroid Corp., a $1.8 billion photographic equipment company in Cambridge, Mass.

Polaroid has been getting its E-business house in order by building a data warehouse for all company information, centralizing desktop support, and creating a firm set of IT standards. These initiatives have helped slash the IT costs of supporting the business by one-third, excluding the cost of projects such as the ERP implementation.

Mindset Shift
But Polaroid's SAP rollout, which includes financial, purchasing, and manufacturing modules, is on hold for the rest of this year due to year 2000 preparation efforts; it will be completed next year when the company's Asia division is brought on line. As soon as the Y2K freeze is over, Polaroid plans to aggressively pursue several Internet projects, Hennigan says.

Polaroid recognized that it must sell on the Web "and it is a matter of figuring out what and how," says Hennigan. "The whole Internet mindset has shifted over the last six months."

Polaroid has channeled its new awareness and enthusiasm into five potential Internet projects: selling direct to users; opening dealer channels and providing ordering capabilities; possibly selling some new product which will leverage Polaroid's imaging expertise and the Internet; electronically linking its supply chain; and revamping its Web site.

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