Faltering steps

• Article 3 of 77
• Information Age, December 2000
• View the original article online

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Much of the blame, however, must fall at the feet of high-level management and the processes by which they operate. Mistakes with Internet ventures can very easily damage reputation and brand and it is the obsession of executive management with getting to market as quickly as possible that has so often exposed the shortcomings of their ventures. Cahoot, for example, went from concept to launch in just three months, admittedly through relying extensively on outsourced providers, but it is now negotiating compensation with them for the damage to its brand after the launch fiasco. “It’s a very competitive market place now, so there is going to be an element of rushing things to the market place purely to beat the competitors,” argues Jim Spowart, chief executive of Intelligent Finance. “We took the decision to hold back and solve the problem, so we haven’t rushed it through.”

“There was a general sense that if you didn’t get on this particular bus, you were going to be left behind as an organisation. That’s what all the doom merchants were saying,” says Webber. “We got to the stage where we saw an enormous number of organisations in panic and following the pack.” The fact that the banks were using new technologies in a new medium was not the real reason behind their problems, argues Webber. Rather it was because executive management decided to neglect the core project disciplines that people have been using for generations in software development. “All these problems could have been avoided just by applying legacy project management and project discipline. All of these problems would have been identified by sufficient testing,” he says, identifying Intelligent Finance as ultimately doing the sensible thing by delaying its launch.

Ryan illustrates the different attitudes taken by those building online banking ventures and those responsible for managing them: “After building an e-commerce site, the planners say it’s time to test for security, modify things where necessary, and take expert advice on any changes. But the answer they often get is ‘we don’t have time for that, we’re going live tomorrow’.” That’s not to say, though, that banks have compromised security in their keenness to get to market. “The bogeyman of Internet security makes for some good public awareness stories,” quips Webber. “But any vendors or banks I’ve spoken to about this know that security is always right up there on their agenda. With most financial institutions, it’s priority number one.” Sometimes, though, it is the dubious tactics of parties working closely with management that are to blame, rather than management itself: “In the flurry of fervour of getting to market…. a lot of business consultants and a lot of unscrupulous vendors have taken the position that you can develop the technology at the speed of light, that there was a new Internet speed to the development process. The corollary of this is that a lot of organisations have probably abandoned some of the traditional skills in defining the strategic objective,” says Webber.

Lessons could and should have been learnt from Internet banking experience on the other side of the Atlantic. The turnover of Internet customers disgusted by the level of service from online banks in the US has now reached more than 50% a year, leaving many banks scurrying around looking for profits. In the UK, Smile.co.uk, the online banking venture of Cooperative Bank, is the only Internet bank to gain the prestigious BS 7799 Kitemark level of safety and security – a testament to the bank’s adherence to best practice. “They’ve had no adverse publicity and their Smile venture is highly successful,” says Webber. “If you go back to October/November, people in the general marketplace were saying they’re going too slowly, that they were going to miss the boat. But we all know that’s balderdash.”

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