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by Kay Nelson, Ph.D.

At least one positive result came from the rise and fall of dotcoms: Business leaders woke up to the fact that information technology had the potential to make money. They recognized IT as an element in the ecology of the business "forest." Unfortunately, in the wake of the "dotbomb," many managers considered IT just one more budget item to cut. Although they're interested in moving their business functions online, they remain concerned about their IT organizations' abilities to provide value successfully through e-business.

 Such skepticism offers the IT quality community a golden opportunity to step in and demonstrate--using quality control and metrics while e-business technology is developed, implemented and launched--just how valuable e-commerce can be. However, we'll only accomplish this if we climb out of our own quality assurance "trees" and start looking at the entire business "forest."

 Even if they don't formally recognize it, organizations are operating in the network age. Increased velocity, massive customization, the service-provider model, virtual value chains, reduced and eventually eliminated distance, and disintermediation characterize these times. "The Internet represents the most powerful engine of deflation in the modern era," states Thomas F. Carpenter, managing director of ASB Capital Management Inc. As profit margins for traditional products grow slimmer through improved logistics, manufacturing and supply chains, firms must seek new income sources in the services and information areas. Organizations can derive value from e-business because, among other benefits, it encourages them to develop more customer-focused business models and rethink IT's function as less of a "utility" and more of a business driver.

Some key e-business statistics

 Giga Information Group estimates growth of traditional electronic data interchange from $3 trillion in 1999 to $3.8 trillion by the end of 2002. This is in addition to organizations such as Covisint, which use open Internet standards for trade. McKinsey estimates that broadband will be used by 38 percent of the U.S. online population, or 23 million households, by 2003. An estimated 65 percent of U.S. households will be online by 2003.

E-Commerce Ohio has found that although only 20 percent of businesses use broadband communication, this percentage represents the biggest businesses and most Fortune 500 companies.

 These statistics should act as wake-up calls to organizations about the changing natures of business and consumer environments. The increased use of broadband capacity and the Internet will allow organizations to market through knowledge, as well as offer value-added information services to customers, automate business functions, maintain tighter electronic links to suppliers and partners, and--finally--extend company reach to fully service customer needs. However, as many of the dotbombs and early Web initiatives demonstrated, these benefits won't be achieved without quality systems and strong business cases. Herein lies the opportunity for the IT quality community to ensure that e-business executes flawlessly on a constant basis and delivers the promised value.

 Have you ever noticed that when e-business initiatives fail, IT organizations are often blamed, and when e-business succeeds, business managers take credit for the success? This is because IT organizations, and quality groups in particular, focus on measurement and improvement within the IT organization and rarely tie these improvements to the delivered product's success or the organization's business goals. As a software engineering community, we haven't advertised our contributions to business success, haven't demanded roles as full business partners, don't get or take the credit when technology initiatives succeed and take no responsibility to drive quality throughout an organization, right down to the balance sheet.

Equating software quality engineering with profit

 The ultimate purpose of software quality engineering is profit. Although this isn't the mindset of most software engineers, it must become the mantra for quality organizations. We must link activities such as software measurement and process improvement to profit, use measurement models based on IT value, link measurement models to IT strategy and ensure that those strategies are also linked to corporate strategies. But this process requires a shift in focus. We can't jump directly from lower defects or earlier detection to stock price and profit.

 Ideally, the IT environment should consist of corporate strategy, IT strategy, conceptual architecture, infrastructure and implementations. In turn, these should be based on business cases that include software metrics relating to defects, cost, performance and delivery. The real world, however, offers a very different scenario. A study of 58 technology reengineering projects showed that only 14 percent of them identified critical success factors, 37 percent spent "adequate" time producing a working vision, 4 percent used metrics to compare the old and new processes, and only 55 percent thought their projects would succeed. This dismal trend must not continue as organizations move into e-business.

 Quality and software engineers accustomed to focusing only on IT improvements find it difficult to see how their work can affect a firm's bottom line. How do you show, for example, how IT performance directly contributes to defect control and improvement? Detecting defect failure costs in embedded systems is one thing, but understanding the impacts on customer systems and other business systems is quite another. That's why we, as a quality community, must participate in building business cases for new e-business processes. Quality must be built in up front.

Customer relationship management and e-business

 Let's use a customer relationship management system as an example of a commonly installed e-business system that requires a direct link between IT internal measures and the original business case. Examples of CRM business case metrics used by organizations include average order tracking time (Watlow Electric), cost per marketing campaign (Abbott Labs), pricing discrepancies in relation to competitors' bids (Equipp.com) and average time responding to customer questions/comments/concerns (Toshiba Medical).

 By linking CRM business case metrics to IT quality metrics, the software engineers can demonstrate their contributions to e-business success and contribute to the bottom line. Let's look at those examples in more detail:

  Average order tracking time . Software failures and redundant processes can increase order-tracking time, but catching defects in CRM requirements will help eliminate redundant processes. Ensuring that defects don't reach the implementation phase will eliminate failures and keep customer-facing e-business systems running 24/7.

  Cost per marketing campaign . Increased business intelligence will result in more targeted marketing and reduced costs per campaign. Data quality key to good business intelligence, and IT can commit to consistent, timely, defect-free data in the CRM business plan.

  Pricing discrepancies in relation to competitors' bids. Pricing discrepancies can result from nonintegrated back-end systems or delayed response times. The IT quality community can control defects--which are often numerous--in back-end system integration. Retaining one large customer by means of accurate information will often pay back the costs of rigorous systems integration tests.

  Average time responding to customer questions/comments/concerns. When data are redundant or simply erroneous, customer response time is delayed, and customers may receive wrong information, which can lead to the loss of a customer. Web-based e-business sites accurately linked to databases with data integrity can solve this problem. Defect control for data issues as well as system integration issues and Web site response and functionality must be built into the business plan. IT quality engineers must also help to ensure that garbage data doesn't reach the customer. In other words, as well as focusing on IT quality, they must inject their expertise into business processes and training.


 That last point about IT quality engineers extending their reach into an organization's business processes--and in the case of CRM, into sales and marketing as well--must be emphasized. In an e-business environment, quality engineers can no longer hide in the QA "trees," ensure IT quality and then let others pick the quality fruit that results. A defect-free system is only as good as the business processes and people who use it, so IT quality organizations must use their expertise to ensure excellent e-business processes and well-trained users. Why? Because although most organizations can afford the luxury of tracking down bad data internally, none of them would want those errors immediately visible to a customer online. Remember that there are now tourists in the business "forest"; online commerce exposes an organization and the quality of its IT systems in real time, all the time.

 Like it or not, the IT quality community will become a critical player in the e-business environment. Unfortunately, many of us aren't ready for that. We've been so immersed in IT quality control, and convincing organizations not to cut corners on IT quality, that we've almost forgotten how important we are to the big picture.

Becoming an e-business quality engineer

 There are several steps to take while preparing for the transition from an IT to an e-business quality engineer. Odds are your job title won't change. Likewise your organization structure may not change, but the role you play in the organization and your impact on the bottom line certainly will: It will become more important. The following skills will be needed for effective e-business quality engineering:

  Speak the language of business--i.e., money.

  Be a partner of the organization that owns the systems for which you hold QA responsibility.

  Learn how to build IT business cases, particularly the quality portion of the cases.

  Take ownership and responsibility for the business success of the systems you work on, not just the systems' quality levels.

  Be prepared to discuss the impact of quality on business value and profit with managers and executives.

  Proactively suggest quality enhancements to e-business systems that will create value.

  Spend 25 percent of your time in the business "forest," not in the QA "tree."


 Although this last point is partially in jest, there's some truth to it. E-business system quality activities shouldn't be buried in the IT shop; they should be recognized as mission-critical, the same way many manufacturing quality initiatives are viewed. In the e-business environment, IT is delivering a quality product directly to the customer, just like manufacturing. E-business quality needs to be recognized as a strategic initiative, not just part of the traditional IT routine. This probably won't happen if we leave it up to business managers, who are already overloaded and probably don't understand IT quality engineering all that much.

 This brings us back to the assertion that software quality engineering's ultimate purpose is profit. We must be able to speak the language of business to contribute to the profit equation. If we can't read a balance sheet, then we must learn how. Take courses in finance and accounting. Read and understand the business and IT strategies for organizations. Many of us in the QA profession who received our initial education in engineering or computer science can't speak the language of business, but to be taken seriously in an e-business environment, it's imperative that we learn to do so.

 Remember that using traditional, internal-software quality activities with e-business systems won't demonstrate IT's contributions in making e-business successful. E-business goals and IT quality business cases must be linked for IT to gain respect and for QA to be recognized as a necessary e-business activity. If we keep our heads in the QA "trees" and fail to understand the ecology of the e-business "forest," many e-business initiatives will fail, and--as usual--IT will be blamed and budgets will be cut.

 This article is a proactive call to arms for the IT quality engineering community to ensure that e-business systems which expose our organizations to the world execute flawlessly 24/7 and deliver real value to business.


About the author

 Kay Nelson, Ph.D. is an associate professor of MIS and director of the Center for Information Technologies in Management at Fisher College of Business, Ohio State University. E-mail Nelson at knelson@qualitydigest.com . Letters to the editor about this article can be sent to letters@qualitydigest.com .

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