Intel - Building an E-corporation

With the crashing back to Earth that the IT industry as a whole suffered in the early part of this decade, many at the time scoffed at how remarkably upbeat Intel remained about the potential of internet-related technologies. Assistant Professor of Technology Management Anne-Laure Fayard and the Cora Chaired Professor of Retailing and Management Charles Galunic's 2002 case study examines the decisions taken by one of the iconic corporations of the 90s to become a purely e-corporation.

by Charles Galunic
Last Updated: 23 Jul 2013

With the crashing back to Earth that the IT industry as a whole suffered in the early part of this decade, many at the time scoffed at how remarkably upbeat Intel remained about the potential of internet-related technologies. Assistant Professor of Technology Management Anne-Laure Fayard and the Cora Chaired Professor of Retailing and Management Charles Galunic's 2002 case study examines the decisions taken by one of the iconic corporations of the 90s to become a purely e-corporation.

With 2001 being such an annus horriblis for the semiconductor industry, Intel had very little time to decide on whether to refocus its energies on the technologies and operating methods that had succeeded so well in the past, or to stay the course and operationalise its vision and remain faithful to the concept of an e-corporation and its related technologies. It had already made more twice as many acquisitions the previous year than in the history of the company in its search for greater synergy. As top policy makers in Intel saw it, the advantage over competitors in its sector would no longer come through innovations in micro-processing, but rather through providing first-rate organisational design and being able to allow clients to integrate this into their overall operational strategies.

In short, the corporation wanted to become, in the authors' words, "the pre-eminent building block supplier to the new economy worldwide" by being a diversified supplier of the technologies that it saw as the four pillars of the Internet economy: microprocessors, high-end server components, networking hardware, and hosted e-service businesses.

The authors describe the real predecessor of the e-corporation, the Intel Business Link (IBL), launched in 1998. This customer web order management system allowed clients to include e-commerce capabilities, as well as content information and file-sharing. By 2000, this made Intel the world leader in inline revenue. While the company was logging 40% more orders and spending 48% more time on customer relationship management, senior managers still felt that business-to-employee channels were being largely neglected. The Employee Services Project was thereby established. This comprehensive intranet network included two general features built into an employee portal: one involving the work-life relationship within Intel, the other centred on increasing efficiencies in HR management.

In late 1999, Intel CEO Craig Barrett asked for the creation of a special division to integrate all the various 'i'-initiatives that had sprung up across the company's generally decentralised and autonomous units. The e-Business Group (eBG), while having no direct business line responsibilities, had very significant operational responsibilities, being charged with making sure the e-corporation concept was firmly installed in every corner of Intel. As eBG expanded its remit, it was forced to evaluate how well the e-corporation concept as a whole was going down with both employees and customers.

The authors describe the challenges Intel faced in changing their customer's operational habits, especially the often arduous task of convincing them that using that the great deal of extra data entry the IBL system demanded would be worth their while. The study concludes with a thorough analysis of the radical impact e-corporation initiatives have had on the behaviour of Intel employees, including middle managers, field sales engineers, customer business analysts, and human resources managers.

INSEAD 2002

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