For eBusiness & Channel Strategy Professionals

October 6, 2009

Improving The eBusiness And IT Relationship

Making The Relationship Work For you With Our TEAM Framework
by Brian K. walker with Patti Freeman Evans, Elizabeth Davis, and Brendan McGowan

ExECUT I v E S U M MA Ry
eBusiness and IT are inextricably linked. You cannot have an effective and productive business online without an effective technology environment and the support of great technical resources. Yet we hear every day from eBusiness leaders about how the relationship between the business and IT is not working. Forrester looks into the ways in which eBusiness leaders can bridge the communication gap and has identified some of the solutions to help improve collaboration and get the work done like developing a common focus and shared vision, aligning goals, reorganizing, co-locating, improving processes, and having fun. eBusiness Leaders report CHaLLenging reLationsHips witH it Seventy-one percent of eBusiness leaders report average to very low levels of support for their business coming from IT (see Figure 1). In fact, many prefer to outsource key technology needs in part to avoid working with internal IT staff (see Figure 2). When it comes down to it, communication can be so strained that it can seem as if you are talking to people from another planet.1 We commonly hear about various issues from eBusiness leaders that include the following perceptions: that IT just does not understand eCommerce, that IT is too slow, or that IT is not reliable. And while it is likely a reality that IT is a shared resource with other groups, the levels of investment required by a growing business are likely greater by percentage than a stable or decreasing one.

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Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

Figure 1 Seventy-One Percent Of eBusiness Leaders See Average To Low Support From IT
We get the support we need from IT. (Responses on a scale of 1 [does not describe my eBusiness group at all] to 5 [describes my eBusiness group very well]) Describes my eBusiness Does not describe my group very well (5) eBusiness group at all (1) 9% 16% (4) 21% (2) 18% 71% of eBusiness and channel strategy professionals gave responses of 1 to 3. Neutral (3) 37% Base: 279 eBusiness and channel strategy professionals (percentages may not total 100 because of rounding) Source: February 2009 Global eBusiness And Channel Strategy Professional Online Survey
54378 Source: Forrester Research, Inc.

Figure 2 IT And Development Is Outsourced By 69% Of eBusinesses

Do you outsource any of the following functions? IT/development/infrastructure Usability/customer experience/creative Project management Business analysis/analytics Customer service Operations Marketing Product management Other 8% 2% 25% 21% 19% 17% 15% 40% 69%

Base: 48 eBusiness and channel strategy professionals (multiple responses accepted) Source: September 2008 Global eBusiness And Channel Strategy Professional Online Survey
54378 Source: Forrester Research, Inc.

October 6, 2009

2009, Forrester Research, Inc. Reproduction Prohibited

Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

Competing goaLs set up naturaLLy ConFLiCting CommuniCation Based on our discussions with eBusiness and technology leaders, the fundamental reasons behind the conflict between the business and IT come down to the conflicting ways in which the groups measure success, goals, and long-term objectives. These conflicts include:

Revenue versus costs. The business side of the company is charged with driving the bottom line
and achieving revenue targets. The IT group is focused on managing to a budget and reducing expenditures. Thus, even when the business side presents a project with revenue improvement attached (e.g., increased conversion rates), the IT group may have no budget to allocate to this seemingly valid project.2 This situation is a prime motivator for the business to outsource to a vendor and access a different budget line that the business controls outside of IT.

Speed versus risk. The business is in need of speed: speed in terms of reacting to customer

experience flaws, bugs, or new feature enhancements as well as speed in terms of reacting to trends and competitive pressures. The IT group is motivated to test and test again, thereby ensuring that the risks of failure are minimized. IT resources are the ones answering the phone and responding to pagers in the middle of the night because the site is down or Web service isnt working. Additionally, they must combat the risks of security breaches and address payment card industry (PCI) and Sarbanes-Oxley (SOX) compliance. Moving fast can also add risk to a project, with more potential for mistakes to occur.

Time versus vision. The business needs to hit seasonal promotions and match competitive

pressures. Meanwhile, the IT group is responsible for a long-term vision of how the Web (and all technology) integrates into the enterprise. Managing by short-term goals, which may seem arbitrary to the IT group, prevents the enterprise architects and developers from designing the best long-term solution, one which adheres to their standards of reliability and mitigates risk over time.

Flexibility versus stability. The business wants maximum flexibility to change the site, run

creative promotions, and integrate clever point solutions and features testing to maximize revenue. The business wants self-service tools to change the site within minutes. The IT group wants to ensure a stable Web environment where there is no potential for unauthorized code getting released, which is a situation that will paralyze Web servers, hog bandwidth, and lead to memory leaks.

Needs versus competing priorities. Many eBusiness groups operate with a shared or

centralized IT organization. They may rely on this group for all or just some of their IT development and support needs, such as enterprise resource planning (ERP) integration or database hosting. When the business needs support for a project or bug fix, accessing these shared resources may be a challenge, as they may be precommitted elsewhere or could be pulled away if something comes up on an enterprise system that they also support.
2009, Forrester Research, Inc. Reproduction Prohibited

October 6, 2009

Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

improving tHe reLationsHip Between you and it In working with many of our clients and having many discussions, various recommendations for improving the working relationship between the business and IT have emerged. Forrester has organized these recommendations into one overarching transparency, embedded groups, alignment, and management buy-in (TEAM) approach (see Figure 3). The pillars of this approach follow. transparency and open Communication are the Cornerstones of successful Collaboration As with many challenging relationships, the place to begin is by focusing on communication. Begin by meeting with the highest-level person you know in IT and start a regular open discussion, including:

Have a heart-to-heart conversation with your technology peers. Clarify the areas that you
need to own as a company versus those for which you are better served by seeking vendor support. Agree on them and communicate the findings up the ladder.

Develop processes to manage your requests in alignment with IT capabilities. Where

possible, leverage existing technology, and partner with key people in your technology group to right-fit the projects to the capabilities and budgets they have. Where projects are clearly outside of that, identify how those projects get escalated, justified, and funded.

embedded groups gain insight into partner pain points and process improvement Many clients have had success in improving their work with IT by more closely aligning the individuals on each team. Some specific recommendations for driving results include:

Build trust between your team and IT by getting them to work together. Select a small,

important project, and assign joint responsibility to a few skilled people from across the business and IT organization. Ask them to jointly develop the strategy, business case, project plan, and requirements. Use the success and challenges to develop a model for future projects and to build momentum around collaboration.

Invite key IT resources into the jobs your team is doing. Ask select IT team members

including engineers to periodically schedule time to closely observe and understand how members of your team are doing their jobs using the tools developed and supported by IT. Advise members of your team to show their IT peers all the warts and workarounds and walk them through common scenarios. Ask the IT individuals to recap their findings, including quick wins to help improve productivity and usability of the existing tool sets. These quick wins will serve as a great set of success stories, bypass the typical red tape, and help the IT team understand your business at a finer level.

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For eBusiness & Channel Strategy Professionals

aligning teams strategically Keeps the Big picture top-of-mind You can quickly drive change by ensuring that your team and the IT team are clearly after the same things. While there are many ways to motivate people, you are almost guaranteeing problems by explicitly measuring performance and determining success differently for the business and IT teams. Recommendations for driving alignment include:

Create a common cause for the team to rally around, like the customer. By focusing on

meeting the customer needs, teams with seemingly different objectives can quickly unite. Involve the IT team directly in observing the customer in labs, participating in market research, and double-jacking in the call center along with members of your business team. Implement this focused process as a long-term plan for all projects to develop momentum behind jointly supporting customers.

Have some fun and create a source of innovation with a hack-day collaboration. Serving as a
fun and highly collaborative exercise, a hack-day is a very short competition where companies team up business and technology resources to develop new product concepts. Often, teams get Friday to work on ideas and then present the ideas on Monday, frequently working many hours over the weekend to develop working prototypes. Use a panel of leaders in the company to judge the results and award the winner. Incentives are great, but it is often the recognition of peers and the chance to see their projects supported that really motivate the participants. The outcome can be some great innovations and things worth taking to the next level, but perhaps more importantly, good will and communication develop within each team. Plus, its fun.

Put incentives in place across the teams. Work to incorporate goals such as site uptime and

error reduction into the business teams goals and include key business-side metrics in the IT departments goals. Some eBusiness pros note that they have had success with selecting revenue and profit goals across the board, while others feel that they need a more nuanced set of objectives to create the synergies they want.

management Buy-in is Critical and should Be gained with roi proof points To build a sustained level of IT support and funding for your initiatives, you will require the explicit backing of your senior management team. While eBusiness has operated in the shadows of many enterprises up to this point, it is time to feel the sun by:

Highlighting the strategic importance of the channel and its needs at a senior level. A good

place to start is to take the issue of IT support and priority-setting up a level or two to the chief executive officer (CEO) and have a discussion about the strategic value of the channel. By focusing on the value of your projects to the brand and the total company revenues, you can gain significant traction. Be clear about the requirements, and ask that the chief information officer (CIO) and technology leadership articulate the tradeoffs and alternatives to deliver the support required. Drive consensus and alignment of the priorities.
2009, Forrester Research, Inc. Reproduction Prohibited

October 6, 2009

Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

Developing business cases that address your business unit and the whole company. To gain

sustained support, these projects should deliver value early and often. Help illuminate the value of the projects fully loaded not only to your channel but also to the company as a whole by drawing out the multichannel impacts that your eBusiness projects will have.3 Help the IT group see the value they will bring to delivering on these. But expect your people to prove that their projects positively affect the business, and be transparent to build trust and credibility.

Figure 3 Break Down your Internal Barriers With The TEAM Approach
The TEAM approach Transparency Open communication with your IT department is critical. Break down the barriers by having heart-to-heart conversations with your technology peers, and develop processes to right-t your IT ambitions relative to your eBusiness budget and team. Embedded groups Get your eBusiness team to work together with IT by selecting a small, important project as a shared task. Invite IT resources to become part of the eBusiness conversation by getting their buy-in on periodic projects.

Alignment Create a common cause that eBusiness and IT can focus on, such as meeting the demands of the customer needs teams. Collaborate as much as possible, and be sure to do the fun things too like a hack-day collaboration to see who can come up with the best product internally. Be sure to incorporate goals such as site uptime and error reduction into the business teams goals. Management buy-in Highlight the strategic importance of the channel, and create the opportunity for IT support to become a critical element of your overall strategy. Illuminate the value of eBusiness projects by developing business cases that address your business unit and the whole company, making sure that IT sees the central importance of delivering again and again.
54378 Source: Forrester Research, Inc.

October 6, 2009

2009, Forrester Research, Inc. Reproduction Prohibited

Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

W h AT I T M E A n S

impLement tHe team approaCH to improve your worK witH it

If you are an eBusiness leader, there is no avoiding working with IT. The range of support required by IT varies greatly, as many businesses outsource much of their eBusiness technology needs. But even in that case, there are times when integration and project support are required. By focusing on your teams relationship with IT and approaching it strategically and holistically with our TEAM framework, you will derive benefits such as:

support for the investments in your initiatives. With the IT leadership behind you and
by gaining strategic alignment on the value of investing in the technology required to drive your channel and derive multichannel benefits the potential for your project to clear the hurdles necessary to get funding will dramatically increase.

improved project quality and on-time delivery. Getting IT resources involved in your
business will help them understand your project requirements and help steer the scope of the projects for maximum return on investment (ROI). By getting IT resources closer to the consumer and the business people they are supporting, they will begin to anticipate requirements and even over-deliver when they can identify that minimal effort will lead to a better user experience.

a source of innovation and differentiation. By empowering your IT resources and fueling

collaboration with the business, you have the opportunity to unlock hidden potential and drive innovation in user experience or multichannel avenues, such as in the mobile applications space.

anticipation of your channels needs and opportunities within it as a whole. By sharing

your vision for your channel and how the multichannel customer experience will evolve, you will arm IT resources with the ability to see opportunities in their many projects. Many of these opportunities will lie in large applications outside of your direct influence such as ERP, order management systems (OMS), customer relationship management (CRM), and point of sale (POS) systems. Your team may not even be aware of these opportunities until it is too late. An IT organization that is plugged into the future of the Web and cross-channel customer experience will identify opportunities to take advantage of them now and in the future.

endnotes
1

Is it normal to dread talking with my IT support? Am I the only one reporting to the operations department? Does anyone else think that their eBusiness offerings are lagging the industry? To help eBusiness professionals start to answer these questions and get a sense for how eBusiness managers work with IT and senior management and where their teams report, we surveyed our eBusiness And Channel Strategy Professional Research Panel. We found that most eBusiness teams are centralized and report into

October 6, 2009

2009, Forrester Research, Inc. Reproduction Prohibited

Improving The eBusiness And IT Relationship

For eBusiness & Channel Strategy Professionals

the marketing department, they continue to have rocky relationships with IT, and they need more support from senior management and the overall company. See the November 19, 2008, Taking The Pulse Of eBusiness Organizations report.
2

Thirty-two percent of panelists on the eBusiness And Channel Strategy Professional Research Panel cite the economy as their top challenge in 2009, followed closely by 26% citing budget limitations. See the February 18, 2009, The Recessions Impact On 2009 eBusiness Plans report. Retailers have been striving to provide seamless multichannel shopping experiences in order both to stay ahead of the market in an increasingly interconnected world and to align themselves with consumer multichannel behavior. In a recent report, Forrester used its Cross-Channel Review methodology to provide insight into the current state of consumers cross-channel experiences across four industries. In order to improve on their firms cross-channel design, retail eBusiness professionals are encouraged to use these particular examples from the industry together with examples of consumer multichannel shopping preferences. See the June 29, 2009, Multichannel Is Still A Myth For Retailers report.

Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com. 54378