Retooling for E-Business

Owens Corning changes IT strategy.

Youve just spent $280 million and the last six years executing an ERP-centric IT strategy only to find that, in some important ways, its incompatible with the companys e-business push. Meanwhile, the slowing economy is producing softening demand for your companys products and a need to cut costs. Oh yes, and lawsuits and restructuring charges last year forced you into Chapter 11 bankruptcy protection.

Time to pull the plug on that ambitious IT strategy and go back to the drawing board, right?

Not if youre Owens Corning, the $5 billion maker of building materials. Rather than tearing its IT strategy down and starting over, the Toledo, Ohio, company is remodeling it by surrounding its SAP AG SAP R/3 ERP (enterprise resource planning) system with a series of Web-based CRM (customer relationship management), supply chain management, and enterprise portal tools and technologies that officials expect will help transform Owens Corning into a true e-business. In fact, CEO Glen Hiner has mandated that, by 2004, the company slash costs significantly by increasing the percentage of customer transactions it does over the Web from about 5 percent to at least 50 percent.

If Owens Corning is able to pull it off, the company will serve as an example—indeed an inspiration—to many manufacturing-oriented enterprises struggling to transform the internally focused ERP systems they spent the last few years—and many millions of dollars—deploying into the foundation of e-business. And what will they learn from Owens Cornings example? That the race to e-business is not necessarily won by the quickest to the Web but by those who approach new technologies with caution and purpose. That, while a single vendor for enterprise applications may have made sense before e-business, it makes less sense today. And, finally, that it takes more than deploying Internet technology to become an e-business. Youve also got to work closely with customers and suppliers to change core business processes.

"The Internet is clearly the direction were trying to move toward, but e-business is just another tool, another technology that can be used to drive costs out or make it easier to do business," said Owens Corning CIO David Johns.