Wait and see
Of course, not every enterprise is doubling its e-business budget or restructuring around the Web.
The wobbly economy and the resulting shakeout in the ranks of e-commerce technology vendors, for example, has caused Beers Construction to shift to a wait-and-see stance on e-business.
In the past year, Ortez Gude, vice president in charge of technology, watched his company commit to a number of off-the-shelf Web offerings, only to see providers such as Collaborative Structures go out of business or be acquired.
That left his business unitsââ,¬"and his IT teamââ,¬"scrambling for replacements. And that's not something he wants to see happen again.
"We've always had an intensive process where we evaluated potential partners, and we factor in the risks, the viability of the company and the payoff," Gude said. "But the market is now a whirlwind of change. Companies we've done business with have gone, and others have consolidated. We're not going to change our strategy and do the development ourselves. But we are going to look at potential partners a lot more closely."
And that's carried over into how the $1 billion construction company is looking at electronic marketplaces and exchanges. "The senior management team is more worried about making investments in the Internet than before," Gude said. "It's not changing our fundamental direction or belief in the Internet, but on things like exchanges, we're not moving forward with the same velocity. We've backed off."
Gude's budget is a "little higher" this year than last, he said. The difference is in how he will spend the money. Last year, he concentrated his investments on e-commerce, including an online e-payment project. "This year, we're going to work on how to more effectively deliver information onto the Web in order to reduce our costs. We want to focus on customer service and use the Web to make an impact on the bottom line."
While the economic slowdown has created questions and uncertainty for companies like Beers, it's also created some IT opportunities. Dot-com layoffs, some IT managers say, have served to ease the recently tight market for people with leading-edge IT skills.
J.P. Morgan Online, like Beers, is going to change the way it spends on the Web this year, dramatically. But it's not decreasing spending. The private banking firm merged with Chase Manhattan last year, and when the dust settled, it was clearly time to change some things, said Morgan Online CEO Glenn Smith, in New York.
The company began its Web efforts three years ago with two goals in mind: Give current customers lots of tools and acquire new customers. The first goal has been moderately successful, Smith said, "to the point where people are asking us if we're giving the store away by putting so many tools in our customers' hands."
But customer acquisition was expensive and tough, in part because private banking "is a high-touch business," Smith said. "People want to speak with a real human being and deal with someone directly. The Web just doesn't do that for us."
That fact, combined with the merger that gave Morgan Online access to an entire customer acquisition team, forced Smith to make a tough decision: close down the J.P. Morgan Online acquisition group, lay off about 100 employees and focus only on current customers.
But Morgan is keeping its technical subsidiary, Arrakis, which is working on the second and third generations of the site. In addition, the company is looking to incorporate into its site a number of additional features from Chase, including banking.
In fact, Morgan is increasing overall e-business spending, although Smith wouldn't say by how much. "It would be a real mistake to back off it now," he said. "We've figured out a way to make it personalised and give our customers interactive dialog. It's time to take that to the next step."
What's perhaps surprising is that, even as the economy appears to slow, many established businesses are accelerating their spending on e-business initiativesââ,¬"intent, like Morgan, on taking that next step.
"We used to talk about how slow and overhead-laden brick-and-mortar companies were, that they were too ponderous to compete on the Web," Giga's Glidman said. "But it's clear now that they're blessed with good business practices. The companies that are going to have the best strategies long term are the slow and steady variety. That's the key."
And that's where Eastman's Buehler comes in. "We just didn't get caught up in the hype. We've got sound due diligence. All we have to do now is execute," he said.
