Damn people! They get in the way

A key barrier to the growth of Internet commerce today is not related to technology or security. It's about people.

Sterling Commerce chief executive Warner Blow summarized that view, shared by others, last week:
"Although the Internet is revolutionary, moving to it is evolutionary. How customers integrate it is evolutionary."

Nobody knows that better than Tony Trenkle, director of e-commerce at the U.S. General Services Agency, the largest buying organization on the planet.

Armed with a mandate from Vice President Al Gore, no less, Trenkle still has trouble moving myriad federal agencies toward more online procurement. He stresses the human challenges over the technical ones.

"Government still has risk-averse fiefdoms within the agencies" where many buying decisions are made, Trenkle told a Giga Information Group conference last week. "It's also true on the vendor [supplier] side."

Translation: If online procurement is more efficient, then government buyers have good reason to worry about job security. Conversely, why would suppliers champion electronic purchasing if they're doing fine in the analog world? They can charge higher prices if the government's system is inefficient.

Add to that the resistance to change inherent in human nature--which may or may not be more pronounced in government--and it's easy to understand how people factors get in the way.

E-commerce vendors on the same panel advised starting with small-scale pilot projects that, if successful, could be expanded into larger ones.

"Find people who see a clear personal win in pushing e-commerce," said Scott Hammond, chief executive of Digital Market, an Internet commerce service for high-tech firms. "You need the mavericks."

David Leach, CEO of electronic data interchange firm Harbinger, likened the problem as to "herding cats," a description Trenkle embraced.

"We need to herd the cats, but let them do what they should do to help the agency," Leach said.

Another issue: Government buyers tend to view online transactions as an issue of automation to save money, not as a strategic effort that can change the nature of purchasing.

Outside government, competition in the private sector creates different dynamics; squeezing money out of costs through smart purchasing can boost profits. That's why the sales guys for e-commerce software and services stress return on investment, or ROI--how quickly a company can get their investment in online purchasing back in savings.

Efforts to move to business-to-business buying software are driven by the money guys--chief financial officers, maybe procurement executives--not the folks who run corporate computer systems.

Then there's Richard Mickool, chief information officer of Babson College, a small private liberal arts college outside Boston that moved grades, class registration, alumni relations, and more onto a Web site.

"The biggest change was cultural, not technological," Mickool said. One example: In the physical world, a student who moved had to visit at least three campus offices to record a change of address. That situation didn't make much sense in the real world, and even so less online.

But the issue at Babson became which department "owned" the student data. Despite internal opposition, Mickool eventually created a online database that students themselves are responsible to update.

"It's one thing for people to be involved in visioning and brainstorming new business processes," he told Patricia Seybold, who runs the eponymous consulting firm. "It's another thing entirely when they see the new applications and they don't look or act the way they're used to." Babson's work is included in Seybold's Customer.com book, due for publication by later this year.

Finally, look at the suddenly visible online bill-paying concept.

Online bill-paying itself is fairly old hat, but the emerging area of "presenting" bills online already has split into several camps. The basic idea is that instead of getting bills in the mail every month, a household's cable bill, utility bills, phone bills, credit card statements, and periodical subscriptions are put on a Web site for consumers to view and pay.

The crucial question is which Web site. There are three contenders. One, pushed by CyberCash, holds that the biller wants to keep billing data on its own Web site because it's strategically valuable information and because it offers the biller a chance to sell add-on services.

Another proponent believes that consumers won't want to visit several Web sites for their bills but will want them "aggregated" at one site they trust--a bank's, Intuit's personal finance center, a Netscape page, or some other entity.

The third thinks billers should just send bills via email to their customers.

It's hard for me to see why any consumer would want to click over to a half-dozen or more Web sites to pay bills. In the physical world, most of us sit down with our checkbooks and bills and start paying them. We aggregate them ourselves, so to speak.

Getting people to view bills online is a big enough jump without making it unnecessarily harder. Technology alone won't spur the transition. It's people.

Tim Clark aggregates e-commerce topics on Mondays.