A Critical Change

A Critical Change

The trend, experts believe, is the beginning of a fundamental shift in how companies will be organized in the future, so as to accommodate and take advantage of information networks. Stephen Haeckel, director of strategic studies at IBM's Advanced Business Institute, says the creation of high-powered, cross-functional, cross-company business-technology teams is one key way that firms are beginning to transform themselves to become more responsive to customers. In the process, these teams begin to organize themselves around functions rather than departments, as in the old corporate hierarchical order of things. "This is critical to changing how companies respond to customers and define the very reason they are in business," Haeckel says. "With hierarchies and silo-departments of old, it has been much easier to forget the whole point of why you're in business. If you organize by function, though, the entire organization becomes more responsive to customers and adaptive to changing market trends."

Ranjay Gulati, professor of e-business at Northwestern University's Kellogg Graduate School of Management, says that more and more companies will begin to use these types of teams to build new links between partners, suppliers and customers. "Teams have been around forever," Gulati says, "but what is unique is that e-business teams now include suppliers, engineering, customers working together—and companies are outsourcing these activities to these teams." Examples of such teams exist at Ford and such software development companies as Cadence Technologies.

But Gulati notes that such teams won't preempt organizational structures in all companies. "Many still need geographically-focused units, and individual accountability still prevails," he says. Still, such teams are being used by more and more companies to implement e-business, because "e-business is transfunctional—not IT, sales or marketing alone but cross-enterprise. You need cross-functional teams to implement this, and these teams are helping to focus companies around technology as drivers of business."

Don't balk now. Gartner predicts that e-business initiatives are going to be the central focus of CIOs for the next six years. Demand for e-enabling technologies is expected to remain strong through 2004, despite the slowing economy, Gartner says.

Codack, for one, hopes Gartner is right. "There's no turning back for us and for other companies who need to get more competitive, and quickly," he says. Bottom line? New teams, managed well, can get you there faster and more cheaply.

Laton McCartney is a veteran technology and business journalist who is the author of the national bestseller Friends In High Places and is an editor at Sm@rt Partner, a Ziff Davis publication.

This article was originally published on 05-01-2001
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