The IT department of tomorrow

For big corporations such as Unilever, implementing e-business means a whole new IT strategy. David Bicknell reports

For big corporations such as Unilever, implementing e-business means a whole new IT strategy. David Bicknell reports

Anglo Dutch food giant Unilever rarely seeks the glare of publicity. So, when it openly discusses its e-business strategy - and the IT issues behind it - it is likely to have a strong influence on others.

Last month (June), at the annual conference of electronic messaging group EEMA, the company - which has over 100,000 users, and an annual IT budget of more than £600m - sketched out a future for IT in supporting e-business that will bring home to many how the business world has changed.

For many organisations, e-business has so far only been about setting up a Web site, and preparing to do some form of electronic commerce. But for the world's biggest corporations it goes much further than that. For Unilever - and General Electric (GE), which also detailed its e-commerce strategy last month - e-business is just "business"; it pervades the whole of the organisation; it is paramount and pervasive.

According to Unilever's director of electronic commerce, Martin Armitage, e-business now impacts internal processes, partners, customers, and suppliers. It is just "too important to be a special project".

Imagine, Armitage suggested, an IT world where 50% of applications are outside the firewall, and where there is no differentiation between internal users, customers, suppliers and consumers, and where your service desk answers queries from all of them. Meanwhile, you are managing over 200 firewalls, and your network is simply "the Internet". This is the world of e-business that IT has to manage.

Today, IT's customers are internal, in a standard, controlled environment, where volumes are predictable. In the future, the customers will be internal and external - customers, partners, and suppliers. Volumes will be unpredictable, and the only common element is likely to be the Web browser.

There will be e-exchanges - and they will be mature, rather than the vapourware of now - and transaction loads will escalate beyond any plan.

Suppliers and partners will be different too. Instead of traditional hardware and software suppliers such as IBM and Compaq, companies will be using application service providers (ASPs). In place of global telecommunications suppliers such as Global One and Concert, well-defined terms of engagement and a largely "product-focused" approach, start getting used to using e-business service companies such as Syntegra, content providers, and having a service-based focus.

That will mean a massive impact on the infrastructure too. The IT supporting e-business will be:

  • directory centric

  • have large numbers of firewalls

  • use single, secure authorisation

  • have secure transactions

  • have a single service desk

  • one Internet network

  • use standards-based messaging - such as the extensible markup language (XML)

    Despite all these critical changes, one topical subject has yet to gain the full approval of both Unilever and Nestle. Unlike a host of other companies that have scrambled to make announcements, Unilever and Nestle remain to be convinced of the long-term benefit of marketplaces or exchanges.

    Nestle and Unilever's reluctance has not been for lack of approaches. In fact, they have been approached by a whole string of ventures.

    But, for Unilever's Armitage, and Tom McGuffog, director of e-commerce at Nestle, the real economic value of exchanges has yet to be established. Unilever, for example, may buy in around 40,000 PCs to replace outdated machines. But it already has existing relationships with suppliers, and as a multinational, it buys in large volumes. What is to stop it finding out from a marketplace the lowest price for those PCs, and then going to its suppliers - outside the marketplace, and with whom it has an existing relationship, and saying, "cut me a deal". In essence, the marketplace concept seems to fly against the trend towards having longer-term relationships with a small number of partners.

    With or without exchanges, eventually, in terms of IT, it will be commonplace to see a world where "global" really does mean 7x24x365, where directories are vital, where applications will be Net-based, and where scalability will have a new meaning.

    It will mean a daunting world for some IT organisations. For others who have embraced the concept that e-business is just "business", the fun has only just begun.

    The new IT World

  • 50% of applications are 'outside' the firewall

  • No differentiation between internal users, customers, suppliers and consumers

  • The service desk answers calls from all users

  • You are managing 200+ firewalls

  • The internet is your network

    Who are IT's Customers?

    Today

  • Largely internal

  • Well-defined standard environment

  • High standardisation

  • Controlled volumes

    Future

  • Internal & customers & suppliers & partners

  • Web browser is the only common element

  • Unpredictable volumes

  • This was last published in July 2000

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