March 6, 2000

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Who Calls The Shots? A New Management Matrix Emerges

By Eric Chabrow

-business is a collaborative effort that often requires a new style of management. As the culture of E-business permeates through a company, the boundaries between traditional business and IT divisions blur. Companies are creating matrix-style teams of executives and project leaders from IT and business units to plot out and implement E-business strategies.

"The CIO is the point man, and none of this can happen without IT, but the issues are much bigger than the CIO," says Eric Clemons, professor of operations and information management at the University of Pennsylvania's Wharton School of Business. "When it's done best, E-business is done by a triumvirate--with someone representing product design, marketing and sales, and IT."

Such an evolution is occurring at tool and equipment maker Snap-on Inc. When the $1.8 billion Kenosha, Wis., company hired Al Biland as CIO two years ago, he established two business councils aimed at integrating IT capabilities with business thinking. The IT Executive Steering Council consists of Snap-on's CEO and his direct reports and meets monthly. The IT Business Council includes senior managers from throughout the company and gathers quarterly. Both groups address broad-brush IT-business matters. As Snap-on's corporate culture began incorporating more E-business practices this past year, Snap-on created the Global Web Council made up of the VPs of IT, marketing, sales, manufacturing, and engineering. The council meets quarterly for about two days. The first day is spent brainstorming E-business ideas; the second day, the group decides which projects to fund.

"As a technologist, I can say, 'Yeah, we can do that,'" Biland says. "But as a business person I have to ask, 'Should we do that?' It's like Jurassic Park; they could recreate the dinosaur, but they never took the time to consider-- should we do that?"

More than 90% of business and IT executives say IT plays a more active role in the overall business, according to the new InformationWeek Research Redefining Business 2000: E-Success survey. That poll of 300 business and 300 IT executives reveals that nearly two-thirds of the respondents say their companies' IT managers drive E-business purchasing decisions. But such decisions aren't made in isolation. In half the companies surveyed, business managers help decide the purchasing choices. One-quarter of the executives surveyed say E-business unit managers are actively involved in that process, too.

Indeed, a new breed of managers who incorporate business savvy and IT know-how is emerging to run E-business initiatives in some companies. One such company is First Alliance Corp., where Nicholas Geber is E-commerce director, a job on equal footing with the Irvine, Calif., mortgage lender's CIO, and both executives report to the CEO.

Geber, a one-time president of a small mortgage bank, began his career as an IT manager and consultant. His experience teaches him that a combination of technical skills and business knowledge is ideal for an E-business executive. Most business managers focus on only what they need to do to get their job done, he says. "The business technologist knows how to apply the whole system to reach a goal," Geber says. "In client-server, you had a much finer demarcation between IT and business people. E-business is driving that third piece in between--the business technologist, who is intimately familiar with business."

Return to main story, "Seeking The Deeper Path To Success."

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