The skills for a successful e-business

Originally commissioned by, and printed in, IT Training magazine

If you ask many IT people which skills are the most important to an e-business, they'd probably say "technical" or "Web design". But if you ask someone who is actually responsible for a successful e-business, you're likely to get a very different answer.

In fact, according to Jonathan Wall, marketing director at the UK's leading on-line IT reseller dabs.com, IT skills are one of the smallest parts of the mix - and actually the easiest skills to source. "New technology skills, such as Java and .NET, are easy to come by", says Wall. "Courses are readily available and developers are hungry and motivated to learn the latest technologies."

"It's not poor IT skills which cause e-business to fail - it's a lack of basic business skills."
Jonathan Wall, dabs.com

Wall insists that e-business success is not especially dependent on technology skills. "There's little to separate an e-business from any other business: any good e-business has to be a 'good business'. It's not poor IT skills which cause e-business to fail - it's a lack of basic business skills. Indeed, the most complex and sophisticated part of our own business is actually marketing."

Wall isn't alone in this belief. James Oughton is chief technical officer at Digital Vision, one of the world's leading stock photograph libraries. As a business, it's fundamentally different from dabs.com, because its product - images - are delivered directly over the Web as high-resolution JPEGs. Like Wall, Oughton sees marketing as the main driver to on-line success - but is clear about what makes an e-business's marketing really fly. "Data, data, data," says Oughton. "It is key to the business to capture and measure customer data - and then use that data for marketing. With a poor data strategy, a company can't move from a hunting style of marketing to farming. On-line services have the unique ability to track and store user actions and preferences. For example, data gathered from our search facility allows us to understand what customers want - and to then provide those new products."

It was from this need for e-businesses to learn from their customers' individual actions that the customer relationship management (CRM) industry has developed. Leading this field is Peppers and Rogers Group, a company headed up by Don Peppers and Martha Rogers, who have co-written some of the most influential books on the subject; their flavour of CRM is known as one-to-one marketing. Peppers and Rogers Group's customers include boots.com, Orange, Hewlett-Packard, Scottish Power and even the Inland Revenue. Robert Wadman, of Peppers and Rogers Group in Europe, agrees that a good data strategy is essential - but warns against gathering data for its own sake. "For marketing people, one of the joys of the on-line world is having direct contact with customers, via data. But it's easy to drown in that data and not see the wood for the trees. It's essential to segment the customer base. We achieve this by feeding customers what we call 'golden questions' - questions which, over time, help to categorise customers into segments. However, this approach is very much under-utilised in most e-businesses."

Andrew Wilmot, chief executive officer of leading e-business consulting company BDR, also believes that more companies get CRM wrong than right. "There is too much focus on customer acquisition and not enough on the kinds of facilities that will help to retain customers," says Wilmot. Another impressive hard-hitter, BDR's customers include BMW, Scottish Water and Canon. Wilmot believes that where BDR's skills benefit clients' businesses the most is when helping them use the Web to accurately profile customers in order to provide better service, via fast, relevant and accurate information - in essence, underpinning the technical infrastructure with strong marketing processes. "Some organisations assume that the basics of price, availability, positioning and the value proposition are somehow not relevant to an e-business and that the Web's unique channel to market can somehow overcome weaknesses in the offer."

It's not all about marketing, though. People might buy a product on-line - but that product has usually got to be shipped somehow.

When you're handling around 100,000 on-line orders per month, like dabs.com, logistics issues aren't trivial. "Our logistics process and systems are our most complex," says Jonathan Wall. "It's not hard to build a Web site that takes orders 24x7. But being able to take an order at 9:30pm and have it delivered by 10:00am the next day takes a massive investment and a lot of hard work."

dabs.com differs from many of its competitors, because it ships from its own warehouse rather than getting manufacturers to ship direct. Says Wall: "Using a single carrier, from our own warehouse, is the only way to consolidate orders and ensure service levels." In this respect, dabs.com has all the headaches of an e-business and all those of a traditional business.

Some e-businesses don't have a physical product, though. Perhaps the best example of this is Friends Reunited. According to co-founder Steve Pankhurst, Friends Reunited is the ideal e-business. "Everything happens on our Web site," says Steve. "We provide the infrastructure, but our members populate it with content. We don't have to package or deliver anything. We just support the site." Steve and his business partner, Jason Porter, were originally database developers, so they built the site themselves and don't see technical development as an issue. So what's Friends Reunited's biggest skills issues? "The legal stuff," says Steve. "This is a big area for us. We spend quite a bit on legal advice. Chat rooms and the Internet get a lot of bad press. Our approach is overkill really, we try to cover all bases and ensure that we protect our users. Internet law is changing quickly and we need to keep up."

"More Web sites are breaking the law than not."
Susan Singleton, Singletons

This underlines a serious point. While most e-businesses have technical and marketing skills, legal skills are often absent. According to Internet law specialist Susan Singleton, "More Web sites are breaking the law than not. For example, in the EU it is a legal requirement to put a VAT number, company registration number and postal address on a company Web site. Many companies do not. More importantly, there is a right to cancel orders placed on Web sites within seven days, but if a Web site doesn't tell people this, then the right to cancel increases from seven days to three months and seven days. And, companies must tell people if their site uses cookies. Failing in any of these areas is a criminal offence. Fines of £5000 - for each offence - can be imposed."

Trading internationally also raises complex legal issues - because different laws apply in different countries, although they are now mostly harmonised within the EU. "International legal rules would reduce both risk and legal bills for businesses," says Singleton. "Many companies have to take legal advice in all the main markets where they expect to do business."

Another skill lacking in many e-businesses is an understanding of yet another legal requirement - acessibility for disabled users. It is now a legal requirement that service providers make their services (this includes Web sites) accessible to disabled people, including the visually impaired. Julie Howell, the Digital Policy Development Officer at the Royal National Institute for the Blind (RNIB), says that when sites are coded according to best practice, they are generally accessible to some degree. "However, while most blind people can get into a site, they do often get stuck. While the state of affairs is not bleak it does need improving."

"While most blind people can get into a site, they do often get stuck."
Julie Howell, RNIB

One e-business which was found to have accessibility problems was tesco.com. "Around forty blind people complained to the RNIB about tesco.com," says Howell. "We sat down with people from tesco.com - with a blind person, who showed them how the blind would use the site. They were horrified that the blind person couldn't add anything to the shopping cart. But they promised to fix it - and quickly created a separate interface to their site. This separate interface now takes around £13 million in orders - well worth the investment. And tesco.com is now committed to making all of its core sites accessible." With around two million blind people in the UK, it is a market worth investing in, regardless of the law.

While most e-businesses see skills such as marketing as their highest priority, an e-business without technical IT skills is like Hamlet without the prince.

Generally, e-businesses choose to keep most technical skills in-house, both to control costs and to be able to make changes more quickly. But these days, being technically proficient isn't enough. Good technical skills need to be combined with strong project management, customer service and communications skills.

James Cook, sales director at technical training company Xpertise, confirms than companies are increasingly mixing technical training with essential e-business and business skills. "The e-business courses most in demand are, obviously, the heavy development courses like Java and .NET - and, less obviously, the IT service management courses. There's a big focus on non-technical skills - such as service management and project management - for technical people." Cook identifies that a broad range of technical skills are needed to support an e-business. "Once running, e-business systems need to be fed and watered properly. Technical maintenance, systems support and security are all very important. One thing an e-business has to avoid is a system outage and it's in this context that technical skills are often most valuable."
Interestingly, Xpertise is finding that standard courses only go part way to solving e-business skills issues. "Many courses are too theoretical; too technology-focused and don't deal with enough real-world problems," says Cook. "The answer is to hold workshops and closed events to explore an organisation's real e-business issues. This works well when done in addition to the standard courses - it sets them in context. We even ran one such event for Microsoft, to explore interoperability between its own .NET and J2EE. Concentrating on specific topics can provide real value. Helping companies via mentoring is a big help too, because companies can access our skills to answer their specific problems."

Steve Burrows, technical director at IT skills company BroadSkill, believes that it's essential for trainers to have experience of real commercial projects. "It turns them into better trainers," says Burrows. "This is why around 20% of our business is development work, much of it in e-business." The work is impressive. For example, BroadSkill recently helped one of the UK's leading company-formations businesses to collapse its main business process from around a week to less than a day. "Previously, documentation had to be sent to Companies House on paper. Now it's all done using a system that we developed. Data is sent to Companies House electronically, and the approval is sent back the same way, resulting in automatically generated PDFs of all the legal documentation. Not only is it faster, it's far more cost-effective. It resulted in a complete change in working practice - a total rethink of the workflow - and changing mindsets is generally harder than introducing the technology."

It's clear that although good IT skills are essential to an e-business, they are only part of the overall skills need - and often the easiest to source. E-businesses are often a sophisticated mesh of technologies and complex disciplines, driven mercilessly by real customer actions, measured by precise statistics, and under scrutiny for legal and accessibility compliance. IT skills have to be combined with general business, communication and project management skills - with a basic understanding of important e-business areas such as marketing, and perhaps a stronger understanding of specialist skills such as accessibility.

It's hard work - and often complex. Still, if it was easy, everyone would be doing it.

Case study: Friends Reunited

Friends Reunited, was developed with just the skills of the small team of founders. Steve Pankhurst and Jason Porter were database developers who already had Web and intranet experience. When Steve's wife, Julie, famously came up with the idea for Friends Reunited, Steve and Jason built the site together. They then ran the company between themselves and their two wives. "We were lucky," said Steve, "because we already had the technical skills to build the site. That wasn't too hard for us."

"Internet law is changing quickly and we need to keep up."
Steve Pankhurst, Friends Reunited

What Pankhurst wasn't prepared for, though, was Friends Reunited's level of success. For a couple of years, they promoted the site without any real investment in marketing. "We used message boards, PR, banner ads and so on. It worked okay, but only got us to around 10,000 users. Then, we had some more luck. We were mentioned on the Steve Wright show and within days we'd doubled our number of users. This quickly became self-perpetuating. We went from 20,000 hits per day to over five million. No business plan could possibly have predicted that level of growth. We didn't have the hardware or capacity to cope and we had to scale up very quickly."

Since then, Friends Reunited's growth has continued apace. The company now employs around thirty people - the biggest change being the recent employment of a top-level management team to bring in experienced management and marketing skills. "Marketing has really opened my eyes. I am amazed at the information we get around the customer experience; it's changed my views completely. Those skills are hard to acquire or learn. Bringing in the management team was a very wise and right decision. It's helping us to do things better: we're really just lucky developers who found ourselves running a very big business. We needed help."

All development work for Friend Reunited is still done in-house, as are all aspects of customer service. "We use outside skills where we need specialist knowledge," says Steve. "For example, we outsource our moderation because of the specialist legal knowledge. We also outsource advertising and PR. Everything else we handle ourselves."