FMI IT LEADERSHIP FORUM

DAN ALAIMO

SAN ANTONIO -- The surge in retailer participation in Internet business-to-business exchanges is driven less by knowledge of what they will accomplish and more by a reaction to seeing their competitors become involved, said Daniel R. Wegman, president, Wegmans Food Markets, Rochester, N.Y.

Earlier this year, Sears and Carrefour announced plans to create a B2B exchange, and they were soon joined by Kroger. The GlobalNetXchange resulted, followed in short order by the WorldWide Retail Exchange, of which Wegmans is a member.

"I don't really think it began with knowledge," Wegman said in a keynote speech at the Food Marketing Institute IT Leadership Forum here last week. "It began with a competitive reaction. That's the kind of thing I've been finding in our industry for some time. Knowledge is a real problem," he said.

At first supermarket companies were little interested in the idea of on-line exchanges. "The reason they got gung-ho was competitive, without really and truly understanding what the business benefit is to those chains. But you have to start with the business benefit, because if you don't know the business benefit, you had better not do it, because technology is pretty darn expensive," he said.

Wegman challenged the information technology executives at the event to educate their organizations how best to harness the new systems. "I really believe your responsibility is not just technology, but it's education about technology within your organizations," he said. "In this new era of collaboration, your success is really important to us."

At Wegmans, chief information officer Don Reeve does not take the lead on IT projects involving other business segments. "We believe in connecting our business managers and forcing them to take the lead on projects. They are forced to understand the benefits and what we are going to do with a project," Wegman said.

If the IT staff did the entire project, the business managers would never learn about the technologies. "At Wegmans, we find that most of the benefits of a system come from changing mindsets and how we operate the business. If we can change the business managers' mindsets, we believe we have a chance someday of making our organization technology literate," he said.

Because of the increasing pace of technological change and the advent of B2B exchanges, Wegmans is re-thinking the way the IT department interacts with the organization. At present, the company has specific people assigned to work with business segments on their various projects, Wegman said. There are technology groups assigned to human resources, accounting, merchandising and distribution.

"Technology today is so omnipresent, it doesn't just affect a few areas within the organization, it affects many different areas. I call it 'holistic,' because it changes the entire company. Today, many of these functional areas are working on things that they didn't start, that another area started, and that's the holistic concept: one area affects the other," he said.