Competing in the Information Age:

Some of the views presented here amount to heresy. For example:

1. We need more computer illiteracy.
   
   
2. Aligning IT strategy with business strategy is too late and is like closing the gate after the cattle are out.
   
   
3. IS methodology is increasingly a blockage to progress. It keeps IT "different" and imposes an artificial structure and way of thinking on business participants.
   
   
4. The main problem in turning executive monologues into effective dialogue is language; the language of IT strategy was needed to help the field of IS evolve but is now largely irrelevant to business.

Computers and "information" are secondary, not primary, elements of IT. The driving force is telecommunications. By removing barriers of time and location on coordination and service, telecommunications has made business networking in core logistics a major destabilizer of entire industries. Point of sale in retailing, airline reservation systems, EDI, and customer-supplier links are a few instances.

Together, these assertions add up to a commonsense approach to handling IT as a business resource, using business, not IT, language.

The Irrelevance of Computer Literacy

Managers need not be computer-literate. Most business executives routinely travel on airplanes. How many of them are Boeing 747-literate?Would in-depth knowledge of airplane planning and technology make them more effective travelers?

The CEO of one of the world's largest electrical power generation companies recently told this author that he is computer-illiterate and hence, of course, unqualified, unable, and unwilling to deal with IT. The obvious and immediate reply was "I'm electricity-illiterate but that doesn't stop me knowing how to use your product." Fluency in decision-making and use is far more empowering and necessary than literacy in technology.

The electrical utility is a useful analogy here to the firm's IT platform. Understanding how electricity is generated in no way empowers its users. The need instead is to understand a few key rules about how to connect to the system. The electricity industry has evolved to an extent where the rules make the system invisible and remove the need to know about the strategy. There is autonomy on each side of the wall plug that is the interface to the utility. The user is free to design and employ devices on the "user" side of the interface. The generator is free to install new capacity and manage the power grid on the other side. This coordinated devolution rests on a small number of policies and regulations and a clear set of standards for the interface.

The electrical utility is the direct equivalent of what firms are trying to develop in their IT infrastructures. The political arguments about decentralization vs. centralization of IT and the cries to "break up corporate IS" or "outsource the lot" mainly come from the tension between coordination and devolution. This tension also sets the limits of IT strategy. Lack of clarity about imperatives and corresponding policy and suitable regulation block coordination of what is recognized as a key business resource are really what "integration" and "architecture" mean or should mean.

Forces pushing for evolution of decision-making combine with technical forces pushing toward distribution and localization of computers and telecommunications. The result is at best an ongoing tension and more often a mess of technical incompatibilities that prevent the development of a platform and make "systems integration" firms rich as they fix up the mess. Business choices should obviously drive technical decisions, but technical decisions increasingly affect business options, too. Imperatives are the business drivers and policy rules, the hinge for swinging from business requirement to technical platform.

The field of electrical power is immensely technical, with a jargon at least as obscure as that of IT. Business and society depend on it even more than on IT. Yet, managers are comfortable in their intuitions about the electrical utility. The IT field has not yet evolved to that point, largely because the IS profession has had to scramble to learn how to manage the technology, its uses, and relationships with its own clients and colleagues, whom they generally have seen as an abstraction called "users." Many of the problems of dialogue and language were created in the 1970s, when the IS field was trapped by its own technology, which was cumbersome, expensive, and hard to make work; by its own bureaucracy, where the management information systems (MIS) department became notorious in almost all firms for lack of service, monopolism, and minimal understanding of, or interest in, the business; and by its own economics, with "charge out" and cost allocations adding up to a property tax, which those paying it saw as not only providing little value but as something they could not influence.

The Irrelevance of IS Methodology

The information services field spent most of the 1980s trying to redress technology, bureaucracy, and economics. IS managers took the lead in building bridges to the wider community. As they tried to bring business managers into the planning process, they naturally began from the technology and extended the bounds of their own planning. They used the language of IT and added a business flavor to it. They explained their strategy, relying on methodology. Much of this process was an essential and partly remedial step for IS to get its own act together. For instance, many of the most useful methodologies examined the fit-or lack of fit-between where IS was placing its resources and the business needs. Examples are Critical Success Factors, introduced by John Rockart; the work of Richard Nolan, which in many ways created the professional field of IS; and various approaches to creating steering committees, assessing the IS "applications portfolio," and "alignment" between business and IS strategies. Later, many methodologies emerged that aimed at creating comprehensive IS plans - e.g., IBM's BSP (Business Systems Planning), stages studies, enterprise data models, business process reengineering programs, and the like.'

One of the main arguments underlying the recommendations in this chapter is that the reliance on IS methodology to communicate with the business community is no longer necessary and does not work anyway. It makes a subject that is complex in its details and almost entirely opaque to outsiders; imagine a business discussion that required managers to understand electricity at the level of strategy and in the language of power generation. Of course, for both electricity and IT, the technical issues are vital and highly complex. That is why the need in both instances is to lead so that others can manage, to sharpen the policy drivers and business imperatives that remove the need to know about the strategy. The model for action must be the investment adviser, not the doctor. Methodologies, especially ones focused on business integration and reengineering, will remain as core to the discipline of the IS professional as capital asset management and tax planning techniques are to the financial adviser. They will be used in context, though, not as the context for business/technology planning and dialogue.

The Significance of Business Networking

The central concept in the traditional view of IT is obviously information. The organizing element of IT here is the computer, initially defined as a large and expensive room, off-limits to most staff, containing a complex of machines. Most recently, it is defined as decentralized personal computers (PCs), off-limits to none as part of a sort of technological glasnost.

Both the computing and information paradigms are less and less useful in explaining IT and assessing it as a business resource. The traditional emphasis is on computing, with telecommunications as an add-on. Data are seen as the raw material from which information is refined. "Information" is distinguished from "data" in this traditional viewpoint as a vital corporate asset, computers as equivalent to the information age, and information as almost axiomatically the core of a new industrial or postindustrial revolution.

This traditional view emerged from the early history of computers and database technology. It is incomplete and outmoded. Computers had little impact on the basis of business until the 1980s. The office of 1980 looked very much the same as that of 1950. PCs were an economic rather than a technical innovation and had only marginal impacts on core organizational processes. The glut of information in this information age has not prevented the erosion of student test scores or U.S. competitive losses to often less information-intensive nations. The Japanese in particular have been high-tech providers and low-tech users of PCs. In 1992, there was an estimated one PC for every twenty schoolchildren in the United States and one for every eighty in Japan.

The primary and radical element in IT is what is here termed for lack of any suitable and available alternative "business networking." Combined with computers and information stores, telecommunications has literally transformed the basics of industry after industry and is sure to continue to do so. Obvious examples include: 

• Airline reservation systems, where the core logistic is distribution, with the reservation system becoming the base for marketing, pricing, ordering, and many aspects of forward planning.
  
  
• ATMs, cash management systems, and foreign exchange trading systems, which are the new core of banking.
  
  
• Point of sale (POS), which is the base for electronic streamlining of merchandising, ordering, distribution, and fast management analysis and response to trends and problems.
  
  

Customer-supplier order entry systems and EDI, a major element in supporting just-in-time operations. 
Information, expert systems, the jargon of IT, and PCs are only the visible trappings of business networking in the core logistics that constitute the foundations of organization and competition. It is this that business managers need to know about; the trappings obscure the radical nature of IT and the extent to which it must be a central element in their understanding of their business and their markets.