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IT directors shut out of B2B decisions

IT directors are becoming less involved in board-level decisions to set up or participate in online business-to-business...

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IT directors are becoming less involved in board-level decisions to set up or participate in online business-to-business marketplaces, despite the centrality of IT to the process.

According to Prem Puri, IBM's global director of distribution solutions, the decision to join or participate in an online marketplace has moved away from the chief information officer. "In the past, we were always dealing with CIOs, but now these decisions are no longer CIO-led - it is the procurement director or the supply chain manager," he said.

CIOs are often not told of the decision to enter an electronic marketplace until after it has been made, said Puri. This means there are often significant misunderstandings about what a marketplace initiative can deliver.

"The chief executive and the board assume that joining a marketplace means you don't need to spend anything on supply chain management and procurement systems in-house. They think [joining a marketplace will] give them a shared infrastructure for outsourcing their supply chain management." The biggest surprise to them is that these initiatives needed a lot of in-house effort.

Nigel Montgomery, European research director at AMR Research, agreed that misunderstandings about what B2B marketplaces can deliver have caused IT directors to lose power at board level because they have not been able to deliver on suppliers' promises.

"For the CIO, B2B might as well mean breakfast-to-breakfast," he said. "He is just about getting hold of all these different systems and now he is going to have to put in some very long hours to make the B2B marketplace a reality."

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