Application 2; Annotated Bibliography

S T R A T E G I E S FOR 1 RANSITIONING

' O L D ECONOMY' FIRMS TO E - B U S I N E S S

SliKVHYiNCi THl- WKt-CKAGi; OP THH IXVl-COM MllLT-

down oi 2001, it is easy to overlook the persistence and rapid growth of c-btisincss throughotit the U.S. ecoiv otny. While many high-Hying dot-com firms, includ- ing Bcyond.com [2], Boo.cotn | 3 | , DrKoop.com [8], Kozmo.com [1], atid Webvan |51 vanished, use of the Iinertict as an essential business tool continued to grow d ran lilt ically. At the peak of the e-business hype in 2000, most pundits ignored the tiascent efforts of large IcgiKy firms, or those that existed before the advent of e-business and had yet to embrace the Net. A com- mon mispcrception about e-business was and still is that you either got it or you didnt get it. By definition, flashy e-business purc-plays, or the dot-coms, got it, and except for a few visionaries, legacy firms didnt. Ibday, legacy firms represent the future ol e-busiiifss, and understanding e-business from their perspective gives us a clearer picture of how e-business will develop in the future. The online gro- cers represent a clear example. I he pure-plays Home- grocer and Webvan received enormous media attention and heavy investment from venture capitalists. Today, both arc out of business, while traditional British gro- cer Tesco has emerged as the tnost successilil grocer online.

When devising an e-business strategy for

legacy firms, be wary of the five myths of

e-business development white embracing

the five guidelines of managerial

responsibility and leadership.

T h e hype surrounding e-business has inspired a set of myths about legacy firms and the nature of e-busi- ness that might give tnanagcrs an oversimplified and misleading view of the wired economy. Careful analy- sis of the e-business initiatives and strategies of legacy firms helps get us past the myths toward a more real- istic perspective on e-business. It is far too early in the liistory of the e-busines.s phenomenon to declare win- ners and losers, but by reporting what is happening in the field and challengitig the myths, we hope to give

niatiagers of legacy firms a better picture of the strate- gic choices available to them in preparing their organizations for e-busi- ness and the key factors they need to weigh when making their decisions, i he result is a clearer indi-

cation of what it takes to make sustainable use of the Internet in business.

During the winter and spring of 2000, we identi- fied nearly 200 senior managers throughout North America with major roles in formulating or imple- menting their organizations' e-business strategies; we call them chief e-commerce officers, or CeCOs, thotigh they have a dozen different titles. We con- ducted in-depth interviews with 35 of them to under- stand their roles, how their jobs were defined, and

EDIEAL J. PINKER, ABRAHAM SEIDMANN, AND REGINALD C . FOSTER

COMMUNICATIONS OF THE ACM May 3002/Vol 4S. No 5 7 7

W I T H O U T A SOUND E-BUSINESS STRATEGY,

ANY FIRM, NEW ECONOMY OR OLD, IS AT A SERIOUS

DISADVANTAGE. how their organizations were preparing to enter the Internet economy. We also wanted to understand why some organizations move aJiead and why others are stuck in neutral. Included were Chubb, Fannie Mae, Kraft Foods, Kodak, Prudential, Texaco, and other large legacy Firms.

Myth 1. The first-mover has the advantage, and everyone else is online anyway, so pve up. The impli- cation is that slow-moving legacy firms are not able to compete with the dot-coms that entered the e-market first and established brand loyalty with high switching costs and a network ot loyal users, customers, and sup- pliers. However, the Internet land grab is not over, mainly because the notion of being online is still not well defined. To some organizations, being online means having a corporate Web site; for others, it s the ability to conduct transactions through the network. For us, being online means having a sound e-business strategy. One day, economists may convincingly prove or disprove the assertion that in e-business there is a strong first-mover advantage. Meanwhile, we know that without a sound e-business strategy, any firm, new economy or old, is at a serious disadvantage.

The mistaken fixation on Web sites and their func- tionality is a result of the natural tendency to focus on the tangible. Much more difficult is to appreciate what goes on behind a Web site: the business processes; the integrated systems; the firms overall e-strategy. Believing the myth of overwhelming first- mover advantage is dangerous for two reasons: It can lead to misinterpreting the competitive landscape, and tt can divert management attention away frotn the formulation of an e-strategy to observable technical milestones that add little value [6].

In our study, we found that as of the summer of 2000, many well-known, well-regarded legacy firms lacked any Web site at all (admittedly, this was a pass- ing phenomenon) and matiy firms had Web sites designed primarily to support investor-relations com- munications or display basic product brochures. For example, Ann Taylor, a U.S.-based women's clothing retailer, did not even have a Web site, giving the

7 8 May 20a7/Vot 4S.No S COMMUNICATIONS OF THE ACM

appearance of being behind the times; Ann laylor.Lom eventually rolled out in November 2000. AnnTay- lor.coni outsources order fiilfillment logistics to J.C^ Penny and is listed prominendy on the Yahoo.com shopping site. The site today has sophisticated fea- tures linking the online experience to that in Ann Tay- lors brick-and-mortar stores. Ann Taylor is not alotic among clothing retailers moving online. 7 he Brooks Brothers online catalog allows retail customers to order custom-made shirts, and Men's Wearhouse, Tal- bots, and The Gap have each developed a strong pres- ence on the Web. Rather than being eclipsed by dot-com rivals, these firms are steadily developing the new channel to complement their existing stores and catalogs.

Successful e-business requires a firm to define its strategic objectives for that business. Building on these objectives, it sets particular technical milestones. Determining the strategic objectives, or what e-busi- ness means to a firm, then organizing to effectively achieve these goals, are managerial challenges. In the following sections, we explore some of the reasons this effort remains a management challenge.

Myth 2. It's all about finding the next killer appli- cation, lhe popular business press has reinforced the notion that the only way for firms to successfully involve themselves in e-business is to develop an inno- vative new product incorporating the Internet and revolutionize their core business models [4]. Examples include American Airlines' NetSAAver email system, which almost overnight attracted close to two million subscribers for its weekly specials, and Cisco Systems' online customer support systems. Another interesting case is the online auction. While eBay developed this application into the heart of its business, its purely online business strategy is the exception rather than the rule. In fact, a growing number of online auctions are managed by legacy firms, including Dell C ôm- puter, Lufthansa, and Sam's Club [9, 10]. These firms use online auctions as a complementary distribution channel. Managers accepting the killer application myth as gospel live in fear of competitors developing

one first and arc seduced by quick-hit thinking that distracts thetn from the less exotic goal of determining how their firms might harness the power of the Inter- net to improve how they do business. These managers risk diverting critical resources to high-risk, low-return technology projects or to the rapid acquisition of star- tups promising to complement existing business lines without careful attention to the costs of integration.

Our study found that managing an e-business tran- sition is more about leading the design and imple- mentation of a comprehensive and contintiously evolving e-business architecture than buying a tech- nology solution. We asked participants to describe what they thought were the most daunting obstacles to e-business success in their organizations. By far, the most cited were what we term organizational obsta- cles. CeCOs face the challenge of justifying support for an inherently risky endeavor whose success is diffi- cult to measure and is likely to dramatically change an organization's internal power structure. The protracted debate at Merrill Lynch in 1999-2000 on the merits of offering online trading illustrates this point [11].

Managers should distinguish between the need to move quickly, spurring innovation, and belief in a sil- ver-bullet solution to the challenges of e-business. One common approach to accelerating e-business efforts is to create a dot-com spin-off, feeling that only within an independent entity with a separate culture is it pos- sible to be innovative.

Myth 3. The only way to get started in e-business is to spin-off or acquire a dot-com. This myth derives from real internal and external challenges to the credi- bility of a firm's e-business efforts. Internal develop- ment projects of complex information systems in many companies are rarely accomplished on time and within budget. Moreover, it has been difficult to attract new employees with e-business skills to legacy firms because of the difficulty of creating an atmosphere of excite- ment in firms for which e-business is only one of many ongoing initiatives, rather than their sole purpose; it is also difficult to create Internet-oriented working condi- tions in firms with established policies for the allocation of decision rights, performance measures, and compen- sation. A spun-off organization entices managers as a way to make an end run around corporate obstacles. For example, some managers told us how challenging it is to be noticed by senior corporate management as long ;is traditional business activities perform well; oth- ers told us that spinning off their early Internet activi- ties might gain them direct access to the capital markets, enabling them to raise millions to fuel their Internet ambitions without going through the requisite rigor of internal capital budgeting.

I he dot-com spin-of} is an example of crearing a

direct c-business unit, or DBU. Firms perceiving an immediate threat to their market share or sensing AW opportunity to leap aliead of the competition might be prompted to seek to organize their e-business efforts in ways that achieve quick results. The DBU provides an enormotis speed advantage. Many retail firms have thus spun off separate dot-com divisions to explore this new channel or acquired existing dot- coms in their industry'. For example, when threatened by Drugstore.com and PlanetRx.com, CVS acquired Soma.com; 7bys-R-Us created Toysrus.com to protect itself against the threat of upstarts like c Toys; and Bar- nesandNoble.com was spun off to counter Amazon.com. Later, CVS developed its own CVS.com, and loysRus.com consolidated its delivery process with Amazon.com.

The direct approach does not always involve a spin- off and does not preclude horizontal cooperation and integration. For exatnplc, in 1999 Kiaft Foods estab- lished an e-business division; today, it coordinates Kraft's major e-business initiatives, such as providing services to vendors of its brands and marketing these brands direcdy to consumers. This DBU operates as a test bed for c-busincss activities that will, if successful, ultimately be reintegrated into the overall firm. Fannie Mae has also organized its e-business activities as a DBU but in a much more ambitious way^— .̂reating e-versions of each of the major activities in its business. Ultimately, all transactions will be moved online, and the e-business DBU will encompass the entire firm. Firms like Kraft and Fannie Mac use the direct orga- nizational structure to help create next-generation ver- sions of themselves for the Internet age. They view e-business a.s having a pervasive effect throughout their organizations that could not be maximized by spin- ning of} an online division.

When there are strong process "compIementaritiLV between the e-business and the conventional channels, the spin-off model can undermine shareholder value. Charles Schwab quickly recognized that its market penetration associated with online services was signif- icantly greater in cities in which it also had physical branches. It learned from its customers that establish- ing a new investment account is a complex activity, as most prefer direct human supervision and advice in an office environment [7]. Moreover, because of the dif- ficulties of systems and process integration, the direct approach might limit what a firm might achieve in the realm of e-business. For example, Circuit City gives its online customers the option of home delivery or pick up at a store and provides real-time store-by-score inventory information. This customer-friendly opera- tion draws customers to the stores, putting them in touch with salespeople, exposing them to more prod-

COMMUNICAT1ONS OF THE ACM May 2002/Vol 4S. No 79

ucts. and creating an avenue for good customer sup- port. Integrating online systems with in-storc infor- mation and inventory systems would have been tough if the online effort had been spun-oflFas an indepen- dent dot-com.

A spin-off may be the path of least resistance to e- business. But because it does nor integrate e-business with a firms core processes, a spin-off might also leave che origin;il firm no closer to its ultimate e-business goals. In addition, as the examples of Schwab and Cir- cuit City demonstrate, a firm pursuing the spin-off strategy might miss opportunities for exploiting logis- tical and product-support synergies between its own traditional and relatively new e-busincss opcnuioiis.

Myth 4. A single department or functional area should lead e-business initiatives. Some managers view the Internet as just another selling channel to be managed by the markeriiig department; others view e- business as a technological issue that should be added to the r r departments set of responsibilities. We also f-ound situations in which a particular division recog- nized the most immediate benefit and took the initia- tive tu participate in e-business. With such approaches, either no executive has been assigned to formulate an e-strategy or the strategy is being formu- lated in a very narrow way.

We found that firms seeking the broadest e-busi- ness result, not necessarily the quickest, ty'pically orga- nize themselves in what we call a virtual e-business organisation. I h i s approach is based on the assump- tion that e-business activities should exist throughout an organizations value chain and that e-business improves coordination among its activities so they coniptenient one another. 1 he role of an e-business management team is to coordinate projects, catalyze efforts across business units and functional areas, and help formulate the Firm's overall e-business strategy.

The ways firms choose to implement the virtual approach differ significantly. Sometimes a looser structure fits the corporate culture better, and many of these organization;il choices are played out in the var- ious strategic business units (SBUs). For example, at Johnson & Johnson, a notably decentralized firm, the same decentralized structure has been carried over to e-commerce. 1 he Johnson & John.son Web site pro- vides investor-relations information and links to its various brand Web sites. An up-to-date URL is appar- ently the extent of the firm's coordination i)f e-com- merce activities. In a large U.S.-based insurance company that participated in our study, the CIO meets with representatives from the firm's SBUs to shape overall e-strategy, though his main function is to set the technology infrastructure standards for the entire firm and provide the technical know-how to

support the various SBU Initiatives. When e-business is viewed as a means of improving

processes, rather than transforming them, the virtual organization is typically implemented by appointing; a setiior manager (the CeCO) to head a council of tnan- agers leading e-business activities in different organi- zational units. We call this e-business strategy the weak virtual approach.

We identified several firms where the CEO quickly felt that e-business was a strategic imperative but was not current as to the technical knowledge needed to lead the eflort. In such cases, the CHO delegated responsibility for e-strategy formulatioti and imple- mentation to a CcCX .̂ The CeCO initiates, rather than coordinates, e-business activities and has signifi- cant ownership over the firms e-strategy; we call this organizational structure the strong virtual approach.

A large North American banking corporation also in our study took the strong virtual approach by plac- ing e-srrategy definition in the hands of a senior vice president designated as the CeCO. He has piofit-aiul- loss responsibility for joint ventures with technoiogy firms in the e-business market. He is responsible for a cost center operating within the boundaries of the existing firm with clearly delineated roles, such as establishing e-b us in ess-related educational programs antl standards for security and privacy. When orches- trating the firms c-strategy, he works closely with the SBUs that actually own the custon^ers, deferritig to their needs. He also identifies gaps in the firms e-strat- egy not covered by individual SBU initiatives, A.?> well as the opportunities for cooperation across SBUs, such as in business-to-business marketplaces.

Wliile the strong virtual approach might seem overly complex, it may be the only one capable of integrating e-business into the entire enterprise with- out causing major disruptions. Like many multi- national financial services firms, the bank provides a range of services to a broad range of customer seg- ments in hundreds of branches. Its executives rea- soned that any spin-ofl would leave a huge business behind ni need of transformation. However, creating a completely online organization is not feasible tor a company deriving immense benefit from its presence in the physical world. Its objective was therefore to pull together all customer information and banking applications to provide one-stop shopping via the Web for all its customers. The bank thus moves in stages: its Web services initially offered only informa- tion; transactions were added later; and in the future relevant services and offerings from third parties, even competitors, may be added.

Many options are available for reorganizing a firm for e-business. The choice of organizational structure

8 0 Maf 1002/Vol 45.No 5 COMMUNICATIONS OF THE ACM

should depend on the anticipated effect of e-business, characterized by the immediacy of the threat posed by e-business competition and the pervasiveness of the changes the firm wants e-business to bring to its core (see Figure 1).

E-Commerce Leadership As In the case of the CeCO in a strong virtual e-busi- ness organization, transforming the firm to e-busitiess involves many managerial challenges. It needs to develop an e-strategy, and the related projects require some centralized leader- ship. Many early e-business projects were bottom-up initiatives in need of coor- dination, aiid it was es.sen- tial for someone to ensure the firms efforts stayed focused. Moreover, these initiatives are often cross- kinctional, requiring a senior executive to manage the process integration. Finally, e-business fie- quetitly leads to deliberate disintermediatioii or to bitter channel conflicts, as has been seen in the insur- ance, airline, photo finish- ing, and automotive sales industries where agents find themselves compet- ing with their suppliers through direct online sales.

These unprecedented managerial challenges require politically savvy executives who synthesize business antl technology strategies and capabilities. More important, they require an executive invested with considerable deci- sion-making authority acting independently of indi- vidual functional areas. Such a person would represent what we call the idealized CeCO (see the sidebar "Emerging Role of CeCO").

Myth 5. The CIO should lead all e-business efforts. Traditionally, decision making about technology' in a business involves the interaction of the CFO, CIO, and CTO, as well as representatives from the SBUs (see Figure 2). Adding a CeCO to the IT management team can disrupt the existing roles and boundaries of a firms leadership. Establishing technology alliances might have been in the domain of the CIO/CTO and

today, a third party, the CeCO, is involved.

• Figure l . Selecting an

organizational structure for

e-business.

Close

Immediacy of t h r e a t

Far

Spin-off

Weak Virtual

(CeCO coordinator)

Direct (Next-generation firm)

Strong Virtual

(CeCO initiator)

b

Narrow Transformative Pervasiveness of change

Examples 1. Corporate strategy 2. Brand development 3.Technology alliances 4. Customer relationship

management 5. Enterprise integration 6. Supply chain

integration 7. Infrastructure

potentially advocating an alternative technological viewpoint. Similarly, while the CIO/CTO tradition- ally established standards with the SBUs for the cor- porate intranet and data security, a CeCO seeking increased external connectivity might advocate contra- dictory policies and standards.

Solutions to some of these potential conflicts involve placing the CeCO within the office of the CIO or designating the CIO as CeCO; we found both approaches occur fre- quently in practice. For example, the CIO of Xerox Corp. assigned a single group of IT professionals to manage development ol the Xerox.com Web portal, ensuring consistency In look and feel when inte- grating the front-end Web presence with the back-end enterprise resource plan- ning infrastructure. While the CIO manages the Web technoiogy and its integra- tion with the firm's legacy systems, the individual business applications are determined and financed by the various business units. Similarly, the CIO of Bausch & Lomb developed a set of standards to create a uniform look and fed for the firm's Web design, though the actual Web implementations are done

by various brands through independent portals. In each case, the CIOs role in e-business strategy develop- ment is rather limited,

focusing on technology provision and infrastructure.

While this approach smoothes over short-term organizational conflict, it poses a number of difficul- ties. For example, many managers fVel that the nature of the CIOs standard responsibilities makes the job inherently incompatible with the CeCO (see Table I). CIOs sit atop large organi/^ations, some with billion- dollar budgets and thousands of employees, responsi- ble for providing bulletproof services at low cost. They are charged with maintaining large mission-critical legacy systems and may be risk-averse in their use of

A Figure 2. Traditional

loci of decision authority

and control.

COMMUNICATIONS OF THE ACM Nay 2002/Vol 45. No

Table l . Contrasting roles of CiO and CeCO.

technology. While they manage technology vendors and outsourcing, they do not typically create tech- nology alliances to develop revenue-generating opportunities. The CIO may also be reluctant to pursue the younger, faster-paced, higher-priced Internet technology labor market or the more exper- imental and iterative development approaches at odds with the traditional software development life cycle.

Putting the CeCO in the office of the CIO can be problematic because it would tend to establish the CeCO as a technical person rather than someone who understands business needs and strategy. Accord- ingly, in our sample we found that CeCOs report- ing to CIOs almost always had notably strong techni- cal backgrounds. The CeCO needs to be ori- ented toward the external market and business strat- egy; e-business involves reinventing business mod- els, designing processes that interact with ctis- tomers. and reshaping profit strategies, as well iis creatively rebundllng prod- ucts and services. These activities require coordina- tion with the SBUs, possi- bly cutting across SBUs and functions. Technical workers reporting to CIOs may find it difficult to assert organizational lead- ership in these areas.

In spite of these factors, our study also found that CIOs play major roles leading e-business efforts, pri- marily in firms whose strategy emphasizes a business- to-business focus. Respondents highlighted the CIOs pivotal role in integrating business processes across legacy systems and across corporate boundaries in cer- tain vertical markets. We found that among firms describing their e-commerce efforts as business-to- business, 67% had a CIO functioning as the CeCO or had the CeCO reporting to the CIO. Among firms describing their e-commerce as business-to-consumer, only 42% assigned such a direct leadership role to the CIO; we found more product development and mar- keting executives serving as CeCOs.

The role of CIO is also evolving. The need for scale, rapid integration, and reliability will exceed

onels)

Orientation

Performance

Compensation

Direct Reports

Charter

CIO Internal

Cost^bulletproof

Flat

Many

Operational

CeCO

Internal and external

Profit/reinvention

Performance-based

Few

Transformational

Organization Type

Weak virtual

Strong virtual

Spin-off

Next-generation

Strengths

Broad-based, not disruptive

Broad-based, transformative

Fast, not disruptive

Fast, transformative

Weaknesses

Not far-reaching, slow

Slow, disruptive

Narrow, unintegrated

Disruptive

the capacity of most in-house IT organizations. leading to greater reliance on external technology service partnerships. CIOs will have to disperse their responsibilities among their firms' various business units and look for other ways to lead the e-business efFort.

Four Paradigms for Moving Forward Our research identified four major organizational par- adigms for moving a legacy firm into e-business: weak virtual e-business organization; strong virtual e-busi- ness organization; direct spin-ofF; and next-genera- tion firm. Although it is too early in the history of Internet-enabled commerce to determine which

might ultimately dominate, we can already identify at least some of their strengths and weak- nesses (see Table 2).

The spin-off and n e x t - g e n e r a t i o n - f irni approaches are the most likely to yield a more Focused effort and quicker results. The spin-off may leave the original firm rel- atively unchanged and unprepared lor e-business. 1 he spin-off and weak vir- tual approaches tend to avoid ititerorganizational friction—the spin-off by definition and the weak virtual approach by leav- ing much of the atithority and initiative with the SBUs. The decentralized weak virtual approach may result in a fragmented efFort that does not achieve a tnajor organiza- tional transformation. Also, trying to initiate

change across functions and SBUs in a strong virtual approach is more challenging and more Hkcly to cause conflict than the relatively simple coordination ol the e-business activities of disparate SBUs in the weak vir- tual model. Although most firms experience manifes- tations of several paradigms at the same time, we found they can be characterized as following a single dominant strateg)'.

In choosing the right organizational strategy, man- agers should not let themselves be misdirected or dis- tracted by the five myths described earlier. Rather, they should apply the following guidelines:

A Table 2. Contrasting e-business organizational structures.

8 2 M^y 2002yVol 45 Na 5 COMMUNICATIONS OF THE ACM

It's early. Even though some oFyour competitors are online, it is still early in the game for everyone. The land grab phase is not over, and the first priority should be to establish a comprehensive e-strategy. Continuous improvements and data-driven experi- mentation put you ahead of your competitors.

Dont expect a single application to transform a business. It is highly unlikely that a single application would transform any business right away. Develop well- designed organizational procedures for rapidly deploying effective e-business solutions for your core business processes. For most legacy firms, the move to e-business is evolutionary, not revolutionary.

You face a massive inte^ation challenge. Integrating e-business into the heart of a firm cannot be solved through acquisition or development of a spin-ofF; this approach might even make things worse.

Project a single face. It is important to organize efForts in a way that presents a single face to customers, suppliers, and business alliances; maintains system compatibility across business units and ftinctional areas; and identifies opportunities for cross-fiinc- tional synergies. Your e-business efForts should not be built around a single department but structured to fit with a cross-flinctional process orientation For the entire Firm.

It's not only for technical management. Although implementation oF e-business requires the manage- ment of complex technologies, it does not mean that e-business leadership should be put in the hands oF primarily technical managers. E-business creates opportunities For strategic innovation and

Emerging Role of CeCO

Deborah Sawyer, managing director ofKorn/Ferry International, an executive recruiting firm, reports, "We're seeing the need for

CeCOs across all industries and in every type of

organization we work with. Whether professional

services, banking, hospitality, IT, or publishing,

the need to quickly ramp up Internet and e-com-

merce capabilities is turning client organizations

on their heads." The stature af the CeCO is also

evolving. She adds, "When these types of individu-

als were first hired, they typically resided in either

the chief strategist's office or the affice of the

CIO. Due to the role's increasing importance ta the

overall strategy of organizatians, the CeCO is now

mare frequently reporting to the CEO. The ideal

candidate is a unique combination of strategist,

technologist, and evangelist." B

should thereFore be led by experienced managers with strategic business vision First and technical skills second. An emerging option is to designate a CeCO with strong decision-making authority over the intersection oF corporate strategy and the e- business effort.

Firms whose path to an e-strategy is not clearly marked need to organize themselves in ways that allow opportunities For experimentation and learning. Don't expect it to be easy. Q

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Times {Apr. 12.2001). 2. Buckman, R. Beyond.com files tor bankruptcy protection, to sell assfts to

Digital River for Si I million. Wall Street Jourm! {]2.a. 28. 2002). 3. Cooper C. and Portanger. E. Spooked: Money men liked Boo. and Boo

liked money; then it all went poof. Wall Street Journal (June 27, 2000), A l .

4. Downes. L. and Mui. C. Unleashing the KitUr App: Digital Siraifgies for Market Dominance. Harvard Business School I'ress, Catnbtidge, MA, 1998.

5. Maiigalindan. M. Webvan seeks protection ftom creditots. Wall Screet Journal (July Id, 2001).

6. Melymuka. K. Survey finds companies lack e-commerce blueprint. Com- puterworU {Apr. 17, 2000), 38.

7. Mendelson. H. Srhwab.com. Graduate School of Business, Stanford Uni- versity, Case Number EC-18. Apr. 2000.

8. Ohison. K. Troubled DrKoop.com is barely breathing. Computerworld (Aug. 28, 2000).

9. Pinker E., Seidmann A., and Vakrat Y. The Design ofOnlifie Auctions: Business Issues and Current Research. Working paper ClS-OI-O'i. Simon School. University of Rochester, 2001.

10. Pinker E., Seidmann A., and Vakrat Y. Using Transaction Data for the Design of Sequential, Multi-unit, Online Auctions. Working paper CIS-00- 3, Simon School. University of Rochester. 2000.

11. Smi[h, R. and Gasparino, C. E-commerce: O n die battlefield: Late to che party; Whai took Merrill [,ynch so long to respond to the Weh? Its C E O says it had good reasons. Wull Street Journal {}u\y 17. 2000), R34.

E D I E A L J . P I N K E R ([email protected]) is the Xerox

Assistant Professor in the W . E . Simon Graduate School of Business

Administration of the University of Rochester, Rochester, NY.

A B R A H A M S E I D M A N N (seidmannav@si mon.rochescer.edu) is the

Xerox Professor in rhe W . E . Simon Graduate School of Business

Administration of the University of Rochester, Rochester, NY. R E G I N A L D C . F O S T E R {Reg_Foster@amsi nc.com) is the chief

e-commerce officer of American M a n a g e m e n t Systems. Fairfax. VA.

We thank American Management Systems for ics generous support of this research.

Permits inn ru make difiiral or hard topics otall or parr of this work tor personal or class- riKim use is granted without fee provided ihai copies are nor madt or distributed for profit or iiimmercial advancagc and that copies brJr chis notitv and the (iill citation on the first piige. Tu copy Dlherwi.se, cn republish. w jiost on servers or lo rtdisiribulc- tu lists, requires pritir specific permission and/or a fee.

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