Drugstore.com juggles up to 100 technology projects each year
Not all e-retailers have $415 million in sales, but virtually all find themselves needing to set a pecking order for technology investments. Drugstore.com has established a framework for approaching and prioritizing such investments. There are three steps to take, however, before tech spending projects can be ranked, Luke Friang, vice president and CIO, said Tuesday at the Internet Retailer 2007 Conference & Exhibition in San Jose, CA.
“First we identify company objectives to provide goals and identify business and functional strategies,” Friang said. In other words, the first test is whether a technology project advances a company’s business goals. Checking progress against those goals throughout the process also is critical to success, he added.
Responsibility for ensuring that company goals are at the forefront falls to an executive team representing business and functional leaders, such as I.T. and marketing, Friang said.
The next step is creating business and functional strategies to serve as a bridge between company goals and tactics, said David Lonczak, vice president of marketing at Drugstore.com, which is No. 35 in the Internet Retailer Top 500 Guide.
“Each team goes out on their own to brainstorm and strategize what that team needs to do to reach goal,” Lonczak said. In the case of the company’s recent redesign of its Beauty.com e-commerce site, that meant how to market the new site and setting up a public relations campaign, he added.
Other recent technology projects include guest checkout and database upgrades, and adding drop-ship capability that enables Drugstore.com to offer inventory it doesn’t carry, Lonczak said.
The first two steps in prioritizing technology investments lead to the proposal stage where project sponsors and managers and program management office leaders come together to develop proposal level estimates, build ROI models, and establish business cases. The business and I.T. sides work very closely at this stage, Lonczak said, “to avoid false hopes and potential disasters.”
All the previous steps lead to the prioritizing step, where the I.T. steering committee approves and funds the top projects. Approval rests on reviewing business cases and monitoring the balance between resource allocation and company objectives, Lonczak said.
The final stage is activating technology projects. “Now we’re locked in and move into the implementation phase,” Friang says. “The purpose here is to staff the projects. All core initiatives have representatives from the business, marketing and I.T. sides along with the project management office.”
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