Bad News is Good News

Recently, two well-known Canadian firms, Holt Renfrew and La Senza, shut down their on-line retail operations. With all the effort being made to get Canadian business on the Web and into e-commerce, it’s instructive to note that two companies have cycled though the whole shebang and (for the moment at least) are out of that game. I don’t know the details of the decisions taken by these companies so I’m not in a position to comment on them.

What I do know, however, is that the bad news for these companies is very good news for all those CIOs trying to manage the expectations of senior management. Regardless of what En Route Magazine says, it takes a long (and very focused) time to get an e-commerce operation up and running in a successful and sustainable fashion.


What senior managers who want to move quickly into e-commerce don’t realize is that in many cases their companies are nowhere near being e-ready. The sad truth is that, after decades of benign neglect by senior management, their organizations haven’t got the infrastructure, the database and information management capability, or the management smarts to take on an e-commerce initiative.

How many times in the last 10 years have you tried to get support for an information and data-management regime that would embrace the whole organization? How many times in the last five years have you recommended setting up a data warehouse to manage all customer information? And let’s not even bring up the numerous attempts to get everybody on to Ethernet. I could go on, but why bother.

Now, because some glitzy Web-site design company took your VP Sales to lunch and told him that they can give the company’s Web presence a pretty face in three weeks, everyone wants to know why you’re dragging a very private part of your anatomy on this hot issue. Aren’t you a team player?

Well, what is the lesson? Same old, same old.

Your real challenges aren’t technical, they’re managerial. And so is the route of remedy. You’ve got to get senior management to understand that e-commerce is more about “commerce” than it is about “e.” And, hardest of all, you’ve got to get them to understand why they must accept active operational responsibility for the e-commerce initiative, stem to stern.

And that will be a real uphill slog. Why? Because management gets captured by visible customer-focused IT benefits. Remember your warehouse initiative? The reason you didn’t get them to move on this initiative is that they (literally) couldn’t see the business need for it. What you should have done was campaign for in-store kiosks and stuck the data warehouse on the back end as an integral part of capturing customer data.

Now you’ve got to get them to see that the Web site, while very important, is just the pretty face on what is a complicated collection of technology-based business processes that all have to work seamlessly to deliver the goods the customer ordered on-line.


Tell them that a lot of e-commerce initiatives fail for reasons having nothing to do with technology. Insufficient marketing and undependable order fulfilment probably account for as many failures as undernourished technology (e.g., absence of customer database capability, uneven transaction capability).

Tell them that the project needs to be headed by a senior business manager who will be responsible for ensuring that all of the (business) processes actually meet customer expectations. You’re on the hook for all of the technology and the IT strategy of course. Together you can work out the processes and strategies (especially risk management strategies) required to get the site up and running.

Chuck Belford is president of Management Smarts Inc., a Nepean, Ont.-based management consulting and training company. He can be reached at [email protected].

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