Andersen chooses e-commerce over millennium-bug business

PUBLISHED : Monday, 31 May, 1999, 12:00am
UPDATED : Monday, 31 May, 1999, 12:00am

Some companies do not want a slice of the billion dollar industry that has grown up around the Y2K issue - and Andersen Consulting is one of them.

The company's global director of marketing communication Eric Jackson said the company had to decide in the mid-1990s whether to become involved in the millennium bug consulting business.

It was a difficult decision to make, he said, but after looking long and hard at the potential, Anderson had decided not to pursue it.

'The issue is inherently limited, the date will come and the work will end,' he said.

'Secondly, in order to do the job properly you would have to hire, train and invest significantly in the staff that is necessary to do the work,' Mr Jackson added.

Mr Jackson said companies would reach a point where they would have to say: 'OK, I've invested in all these people, what do I do with them now?'.

'You either have to retrain them and therefore spend twice the amount of money you would normally, or you have to lay them off,' he said.

Andersen's policy on human resources was to train and retain the best people, Mr Jackson said.

And the company had made a strategic decision to focus on an issue that was far more transformational - electronic commerce.

'We are saying, go fix your Y2K problem, but if at the same time you are not thinking about the issues that are transforming your industry - and e-commerce is transforming everything - you are going to be missing the boat and putting your operation in jeopardy,' he said.

The e-commerce dynamic was sweeping the world, Mr Jackson said. It lessened the boundaries of time and space, and it lessened the hurdles of doing business with someone on the other side of the globe.

A company may be a market leader, he said, but the fundamental dynamics of the electronic economy would change everything it knew about its industry.

Mr Jackson said it was the start-up companies that would eat into a company's margin, because they would not have the same cost structure as an established company.

'Market leaders will have greater hurdles than starters,' he said.

'Executives therefore have to fundamentally rethink the value proposition of their business in its present guise.'