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September 27, 1999

InformationWeek 500
IT Excellence

The influence of E-commerce is putting IT departments at the head of the business table

Related links:

E-Business: What's The Model?

E-Biz Resource Center

And from our sister publications:

Computer Reseller News Trends In E-Business
enior IT executives will come to remember 1999 as the year that began with lots of worry over an issue abbreviated Y2K and ended with attention to all business opportunities beginning with the letter "E." Technology chiefs at InformationWeek 500 companies--businesses identified as the most innovative users of technology--have been pulled in two directions much of the year. To their delight, many are finally wrapping up Y2K programs after years of overseeing them. They're also being called on to guide their companies into E-business, an effort that includes forming closer relationships with customers.

The companies included in the InformationWeek 500, our 11th-annual ranking, made the list based on an extensive survey of IT usage and business processes that was fielded in May and June (see story on methodology).

E-business was rated the top business, organizational, and technology priority of IT managers at InformationWeek 500 companies for the next year, which comes as little surprise given the frenzied efforts of many companies to establish electronic supply chains and develop Web ventures.

A resounding 97% of 250 IT executives at InformationWeek 500 companies queried in a follow-up survey in July said E-business was one of the key business priorities their IT departments would implement or support in the next 12 months. E-commerce applications and intranet or enterprise portals were at the top of the list of key strategic technology priorities. On average, InformationWeek 500 companies now draw 21% of their total revenue from E-business transactions.

bar chart A growing number of companies provide customer service or sell products or services to other companies on the Web, according to the initial qualifying survey completed by InformationWeek 500 companies. There was also a dramatic increase in companies' purchases on the Web for a wide variety of IT products.

IT leaders say the Web is proving to be an efficient way to market their companies' products and services. "It's a new distribution channel for us, and the time to market has been very fast," says Robert Reeder, VP of information and communication services at Alaska Airlines Inc., a $1.9 billion airline in Seattle, which was among the first airlines in the world to sell tickets on the Web.

How is the E-business phenomenon being played out? Like a growing number of companies, Snap-on Inc. in Kenosha, Wis., a $1.8 billion manufacturer and distributor of hand tools, automobile diagnostic equipment, and shop equipment such as hydraulic lifts, has created an online catalog of its products. It's preparing a service to let customers and dealers order products online, and it's getting into online equipment auctions.

That's not all. Alan Biland, VP and CIO, says Snap-on is also providing a Web site to assist peopleand companies in setting up auto dealerships, a service that Snap-on is providing on an outsourcing basis to automakers such as Ford and Honda. "If someone is thinking of starting a new dealership, they'll be able to log on to the Web and get everything they need," Biland says.

bar chart The move puts Snap-on in the interesting position of featuring competitive auto-shop tools on its site. "In the spirit of building customer relations and gaining a larger share of the market, you have to think out of the box these days," Biland says. "It may not be just your products that customers want."

More businesses use intranets and enterprise portals for agreater number of applications, including human resources, training, customer service and management, decision support, marketing and sales-force automation, workflow, and enterprise resource planning.

Alaska Airlines' intranet has become an indispensable tool for getting up-to-the-minute information to employees and helping them do their jobs better. "It's central to everything we do with our employees," Reeder says. "We have a diverse workforce that's spread out over the West Coast, and our pilots can be all over the world." The system provides an easy way to get applications and information to those people, including up-to-date data for flight crews.

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