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December 18/25, 2000

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Behind The Numbers:
Significant E-Business Change Is Brewing

unny thing about change. You notice it happen to others before you see it happen to yourself. Does this rule apply to technology adoption, too? At first, you might not think so. After all, you notice when a new computer appears on your desk. You notice when you try a new cell phone.

But new toys don't begin to tell the full story. Two years ago, InformationWeek Research set out to measure and track the impact of E-business initiatives. The E-Business Agenda survey was created to spotlight key trends and measure the transformation of five industries in the networked economy, including manufacturing, information technology, financial services, health care, and retail and travel.

The fourth wave of the E-Business Agenda Study, a survey of 375 IT professionals, suggests that significant changes are afoot, including shifts in business models, scalability concerns, cultural changes wrought by E-business, a rise in broadband initiatives, and the rapid emergence of mobile commerce.

Chart 1 What is the human consequence of this transformation? According to the survey, two-thirds of IT professionals agree that change affects their company's culture. More is expected of employees than before. And today's expectations won't be the same tomorrow.

In this evolving economy, workers are constantly asked to update and expand their own skill sets, much as companies are shifting business processes to meet market demands. Cross-functional training and empowering employees are techniques used to improve employee skill sets. According to 76% of IT professionals,

E-business facilitates cross-functional work teams, which have a significant impact on employees' workloads and the company's culture. Cross-functionality also provides many employees exposure to new issues; a new perspective may create new solutions to long-standing dilemmas. For two-thirds of those companies surveyed, employees feel more empowered to lead change in the company, up from 58% 18 months ago.

As dot-coms continue to fold, merge, align business models, and struggle for profitability, one might believe the end of the E-business revolution is near. The truth is that the revolution is not over--it's evolving. Many IT professionals have learned to live with the pace of change. In fact, if change is the only constant for E-businesses, then the best course of action is to become a leader, rather than a follower.

Is your business embracing change? Let us know at the address below:

Own the data behind InformationWeek's Research. See our available reports at http://informationweek.com/reports
Lisa Boomer
Managing Editor, Research
lboomer@cmp.com

This week in Behind The Numbers:

More Tools, More Work Heading Off Competition Better Customer Service A Bumpy Road Ahead

Chart 2 More Tools, More Work
Are technology and innovation helping people be more efficient and, therefore, more productive? A wise person would argue both sides. According to the E-Business Agenda survey, 82% of IT professionals surveyed agree that growth and change are making more work for all employees, up from 77% 18 months ago. Employees have more tools at their disposal to help complete daily tasks. There are intranets to simplify internal issues, the Internet to do outside research, and word processing programs that virtually write letters and reports on their own. So why is everyone working harder? It hardly seems fair.

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Chart 3 Heading Off Competition
The pace of change is having a dramatic impact on employee workdays. With shorter product-development cycles, condensed planning periods, and narrow margins, workers are confronted by the challenges that this fast-moving business environment generates. Some companies can withstand untested business decisions and fast product launches. However, many can't. Regardless of tolerance levels, few managers can rest on their laurels. And four in five IT workers say their company's management is responding faster to competitive pressure. But to become a market leader, companies have to anticipate competitive moves, rather than react to them.

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Chart 4 Better Customer Service
It's never wise to discount the opinion of a client, so companies are making a strong effort to ensure that customer feedback isn't only being heard, but that it's also being used to strengthen customer relationships. A majority of businesses report they've already made gains in such areas, with 84% saying that their employees are listening more closely to customers than before. In an attempt to use the information gathered during such interactions, seven out of 10 sites are applying customer-specific information to enhance the company-consumer experience and increase client loyalty.

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Chart 5 A Bumpy Road Ahead
Dot-com companies might be struggling to show cogent business models and profitability, but their difficulties aren't stopping other companies from trying their hand at Web-focused initiatives. In all, 34% of IT managers polled by InformationWeek Research report that their company's business objective has become centered on E-business strategies. Only 18 months earlier, 27% of sites reported undergoing the same transformation.

Whether these sites succeed online will depend on their ability to survive their own mistakes, learn from the errors of competitors, and their capacity to stay ahead of the curve and anticipate the next market sweet spot.

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