Business Multimedia Explained:

The business effects of multimedia have been less dramatic than the technology itself, which is dynamic and eye-catching, but they are growing rapidly. Here are some representative examples:

• Multimedia typically cuts training time in half, while increasing retention of what is learned by 20 to 40 percent. This finding is reported by company after company, reflecting the fact that multimedia is a major resource for building the knowledge-driven, learning organization that just about all commentators see as key to competitive positioning-an organization where education is not a single event but an ongoing commitment. Multimedia tools facilitate self-paced learning at the employee's own location, instead of dependence on travel to teacher-paced classroom programs. Multimedia cuts overall costs by creating systems that can be reused and distributed either on CD-ROMs or over telecommunications networks. More substantively, well-designed video and animation, interaction and simulation, augment learning. In the words of one expert, multimedia lets employees learn by virtually doing, in training programs that look like real work and use real tools that allow learners to see the real consequences of their actions, with the opportunity to repeat that work until they are fully comfortable with and competent at it.
  
  
• A comprehensive survey of 7,000 people in 50 countries, by the accounting and consulting firm of Price Waterhouse, estimates that, over five years, the cost per learner of audit training dropped from $760 for traditional methods to $106 for multimedia. Storage Technology, Inc., calculates that the annual cost of its training course for field technicians fell from $3.2 million (lectures plus labs) to $1.7 million, and course time per student, from 28 hours over four days to 11.2 hours. Union Pacific Railroad reports that it cut training costs by 35 percent, while reducing training time by 30 percent and increasing student retention by 40 percent. With training budgets in the United States now amounting to over $200 billion, multimedia is dearly a powerful tool for knowledge management and for making knowledge a real business asset.
  
  
• Multimedia greatly facilitates interaction with customers. In the auto industry, it has contributed to rapid and marked changes in how people buy cars, reducing the dominant role of the dealer and salesperson by making it easy for customers to see before they buy. CarMax, a fast-growing start-up subsidiary of Circuit City, sells used cars via electronic kiosks - private booths with a personal computer, CD-ROM, and telecommunications links where customers can enter information about the car model and their financing needs. The system prints out photographs and data about cars on the lot that meet their criteria The entire selling process takes less than two hours on average, with buyers reporting more comfort, satisfaction, and trust than with the typical used-car dealership. Daewoo, the Korean manufacturer, saves 5 percent of the price of a car through not having to pay a commission, by direct selling via multimedia kiosk. Toyota markets a free CD-ROM that provides more vivid information about every model than brochures can; the disk lets potential buyers try out different colors and configurations on the screen. GM has implemented its own multimedia service on the Internet, offering 16,000 pages of information on its cars and linking customers to its car divisions.
  
  
• In another industry, Florsheim, the shoe retailer, reports that sales per store employee went up 20 when it introduced kiosks in 550 stores, starting in 1985. Its Express Shopper lets customers choose from an electronic catalogue of over 400 styles in 24,000 size and width combinations, then order them at the kiosk. Some 30 percent of Florsheim's business is now handled through these new outlets.
  
  
• Three-dimensional computing transforms any area of design in which visualization, depth perception, and simulation of movement are integral. The designers of the New Zealand craft that won the America's Cup used it to evaluate over 10,000 alternatives in just two months. Engineers responsible for managing the safety and environmental impact of chemical plants, who used to work with two-dimensional diagrams and computer simulations, backed up by frequent visits to the site and reams of documentation, now bypass all of these. Instead, they use 3-D photographic displays of a plant, built up from a library of camera shots, which allow them to pinpoint the exact locations of specific pipes, joints, and openings. They can electronically "walk" around the plant; the software rotates the selected area, provides close-ups, and shows the effects of changing any component. Wherever visualization is key to analysis and decision making, the increasingly affordable tools of 3-D multimedia allow new ways of simulating and displaying information in more meaningful ways.
  
  
• Virtual reality (VR) software and hardware create simulations of physical reality that users can enter and interact with as if they were in the real world. Virtual reality enabled McDonnell Douglas engineers to maintain a fighter plane that did not yet exist. They created an animation of the plane from design documents. They used virtual tools to try out maintenance procedures and test virtual equipment. In one instance, the simulation alerted them to problems in removing an engine within a confined space; they redesigned the equipment and now will never encounter the problem when the plane is made operational. Caterpillar uses virtual reality for workers to operate the controls of a simulated backbone forkloader.. The company reports that, whereas it took anywhere from six months to a year to build a physical prototype machine for evaluation, designers can create a VR machine in a week. Rolls Royce has replaced models of submarines with VR versions, which engineers can "walk through" to check out design features.
  
  
• Animation gets ideas across quickly and simply, as its wide use in television news programs and instructional videos shows. It has become a standard courtroom tool for communicating to jurors, who can "see" events rather than merely hear them described. Attorneys can freeze shots, show the implications of, say, a car hitting someone at different speeds, including slow motion, and make evidence concrete to viewers. Animation is widely used in medical and technical training as well. It is communicative, far cheaper and easier to produce than video, and in many instances even more effective than video, in that it strips away extraneous background and detail, and can speed up or slow down time to capture the growth of a city or the flow of traffic through a telecommunications network.
  
  
• Computer-telephony integration (CTI), the incorporation of telephone functions in personal computer hardware, meshes the natural information medium of voice with the media of computers. CTI has enabled an insurance firm to add many features to its customer service systems. Callers can access forms, hear information on the progress of their claims, and have the PC software automatically page specific people to help them. Claims adjusters can phone in reports that are automatically appended to documents, together with handwritten annotations and copies of photographs. These can be automatically accessed by phone and automatically faxed. Phone services become just another type of PC application. The full customer history resides in a multimedia file that can be directly accessed by phone as well as by computer.
  
  
• Every major new development in the Internet since 1994 has been in multimedia. The Internet, the massive set of telecommunications links and computers to which other networks and computers can connect, is now fully established as the single most widespread and influential information and communication resource in the world. Adding multimedia to its capabilities makes it even more so. The Internet's telecommunications technology allows any computer anywhere in the world to link to any other computer. That is the main reason for its explosive growth. The software technology of the World Wide Web, one of the main services provided through the Internet, provides the vehicle for these computers to organize, access, and share information simply. Until recently, that information was largely in the form of text and numbers, the staple diet of computers. Now, demand and supply on the Internet are rapidly moving to add video, graphics, radio, telephone, 3-D, virtual reality, and every other type of multimedia to its capabilities.

What's Special about Multimedia?

Multimedia is a catchall term for the next major wave of innovation in the routine use of computers and telecommunications. Fundamentally, multimedia moves information technology from being limited to electronically processing the type of information that typewriters have been able to process for over a century to routinely handling almost the full range of information and communication that humans can experience through sight, hearing, and-though to a far lesser extent and not yet routinely - touch. Multimedia brings to the PC the photographs, VHS-quality video (higher quality is practical but far more expensive), CD-quality music, book illustrations, color pictures, animation, and 3-D depth perception that surround us in everyday life. What it adds to everyday life is that, without the enabling technology of multimedia, all these are available only in a form that does not permit their easy reproduction; their transmission from one location to another; their compact and cheap storage; their editing, augmentation, and even transformation; and their rapid access by anyone.

By so radically expanding the range of information that can be created, communicated, and manipulated, multimedia expands the opportunities for business innovation by at least as much as personal computers and telecommunications networks did in the 1980s. By presenting information in the forms most natural to human understanding-its single most distinctive feature multimedia goes well beyond anything computers have to date made practical. By making it easier and cheaper to process and share such information, multimedia offers businesses proven opportunities for building and using knowledge, interacting with customers, making effective decisions, and working together to build a shared understanding.

The available price-performance options are now so wide in range that high-quality multimedia systems can be developed on home computers; professional-quality ones, on hardware and software that is well within the budget of even small departments; and Hollywood-quality ones, on the most advanced machines. The capital cost of a professional-level combination of fast PC hardware, the large disk storage needed for multimedia, scanners, color printers, authoring and editing software, video camera, and the add-on hardware needed to speed up processing of video and audio is between $20,000 and $80,000. Top-of-the line multimedia software typically costs just under $3,000. CD-ROMs cost under a dollar to produce in quantity. Development of training programs, electronic customer brochures, interactive kiosk systems, advertising, and the like can obviously be very expensive. One 1995 survey of the cost of multimedia training per minute yielded the following:

Low	Midrange hardware and software, limited size, speed, and resolution of video and audio; limited use of full-motion video; delivered through CD ROM	$1,000-1,500
Medium	Midrange hardware and software, but with more and higher resolution use of video and more complex interactive menus for the user	$1,500-2,200
High	Professional-studio quality, delivered through CD-ROM or over a network	over $2,200

That means that a typical training program will cost around $35,000 per half-hour, and a customer service interactive system, anywhere from $50,000 to several million dollars. Tulare County in California spent $2.5 million on its Tulare Touch multimedia system for welfare applications. That's obviously expensive, but for many multimedia applications, the payoff comes from the savings per user. The larger the base of users students in training programs, customers, or in this case welfare applicants-the greater the overall benefit, even though that may amount to just a few dollars per person. One example is Storage Technology's saving of $654 in training costs per field technician ($760 minus $106). That may not seem to be much, but it compounds rapidly when 1,500 technicians must be trained every year. In Tulare's case, the savings added up to $20 million a year, and application time has been cut from 2 hours to 15 minutes, with the near elimination of the 38 percent error rate in applications.

Apart from enabling such savings, perhaps most important of all for the future of multimedia is the shifting of much video, publishing, and customer service development from outside agencies into the firm itself and onto the desktop instead of in the studio. Up until now, the use of equivalent media has relied heavily on expert intermediaries; most people do not have the tools or expertise to create their own movies, search the world's libraries for information on individual topics, generate music, improve or edit photographs, or produce their own CDs containing combinations of video, speech, documents, numeric data, and music. Nor can they interact with photographs, videos, or documents to change colors, dip out sections, remove or add features, or link them together (to create an electronic book, insert a video into a word-processed document, or add voice annotation to an electronic mail message).

Multimedia transforms the creation and use of all the media that have historically required expensive studios. The desktop PC studio is now commonplace. Although managers are still unlikely to produce their own training videos, those who use today's software to produce their own management presentations are already positioned to create more powerful, communicative, and information-rich multimedia presentations with minimal effort. The sales reps who travel with a briefcase full of brochures can carry the equivalent of literally a truckload of material, including videos, promotional material, manuals, photos, and packaged presentations, all on a laptop computer with a built-in CD-ROM drive. Such machines are no longer the Porsches or Maseratis of the PC field, but the Ford Tauruses or Grand Cherokees, a little pricier than compacts but well within the reasonable price for a midrange car.

Companies will still rely on expert intermediaries for their training and marketing videos, which can cost $50,000 to $5 million to produce and edit, but many of those intermediaries will now be on staff. Human resources, finance, marketing, and engineering can and should have their own small teams working on what is now a standard PC application on standard PCs a training video, Internet Web page design, 3-D engineering simulation, or marketing animation, for instance. These groups can now bring multimedia into the mainstream of the firm's PC use and, over time, into the mainstream of their use of telecommunications networks.

The Need for a Business Map of Multimedia

Multimedia technology obviously creates business opportunities, but it is not in itself the opportunity. It is so recently a practical and cost-effective tool for business use (rather than confined to Hollywood studios and computer research labs) that there is no reliable business map to help orient managers to its impacts and opportunities. Multimedia maps are all technological ones, with plenty of examples of the tools themselves, but mainly used for prototypes or entertainment, the primary application areas of multimedia to date.

Managers have plenty of reason to distrust such maps. Throughout the roughly 30 years in which computers have been an integral part of business operations, and the 20 in which telecommunications has played a growing role in them, technology innovation has too often failed to lead to the business innovation its enthusiasts predicted for it. Time and time again, firms invest heavily in promising new ideas that turn out either to be duds or to take much longer than expected to generate customer demand, organizational value, and economic payoff. Examples are the 1970s forecasts of a cashless society, paperless office, home banking, and artificial intelligence replacing managers' decision making. Twenty years later, progress toward these technology-driven goals has been at most incremental, not the promised revolution.

The gap between technological promise and business payoff is a particular risk with multimedia. The technology is both revolutionary and glamorous; it is designed to be dramatic. For example, images of goods for sale seem to float in the air above the sidewalk in front of a department store in New York. The 3-D displays look realistic and solid. Shoppers have been "bewitched" and "astounded" by them. That's impressive, but what does it mean for advertising in the future? Is this just one of the many multimedia gimmicks that flashy technology offers, or does it signal a long-term change in the role of technology in customer communication?

The same basic question - what does this mean for business? - has to be answered convincingly for managers to have any reason to factor the major developments in multimedia into their thinking and planning. Interactive television has to date been the 1990s' equivalent of the paperless office, with billions of dollars invested on the basis of promises of multibillion-dollar returns resulting in over a billion dollars of losses. Will this in the end make home shopping more than a minor niche, or is it a technology solution in search of a problem? Digital video tools have transformed the economics, production, and even content of film making. Jurassic Park set a new standard for special effects, generated and processed by multimedia software and hardware. Toy Story created a new medium of full length 3-D animated films. Forrest Gump created the illusion of large crowds from multimedia processing of images of just a few actors. Twister showed that even a film with the thinnest of plots could be a major hit through dramatic multimedia special effects. Less powerful but less costly versions of the technology of digital filming are available for businesses to film their own ads, training programs, investor relations communications, and the like. Virtual reality, morphing, 3-D, animation, and first-rate digital editing tools are now available to businesses large and small. But what business opportunity do they offer? Where, if at all, they will transform customer service, product innovation, and organizational coordination? Will the Internet truly turn out to revolutionize business and society? Do the Internet and CD-ROM mean the slow but certain death of printed books and newspapers?

In addressing these questions, it isn't enough to focus on the technology itself. What's needed to create a business map of multimedia opportunities is to organize the lessons from experiences in applying the wide range of technologies across a wide range of operational business contexts in real organizations, not labs and prototypes. This may run the risk of overlooking a breakthrough new technology, but it has the advantage of showing, not claiming, the impacts of multimedia I've read at least 2,000 articles, cases, surveys, and books on multimedia over the past year, trying to tease out from them evidence of business impact. I've looked for common patterns across organizations, industries and technologies and have found four that comprise the basis of a business mapping of multimedia. I use these four categories as the basis in the Glossary for assessing the likely impacts of emerging and new technology. My logic is first to make sense of the business impacts and then to use that knowledge to make sense of the implications of existing, emerging, and new technology.

Mapping the Business Opportunities of Multimedia

The four categories of opportunity are knowledge management, customer interaction, natural decision input, and shared understanding.

These four categories are just that - opportunities. Realizing the opportunity is not a technical issue, but one of business leadership and innovation, backed up by technical expertise. These are not futuristic concepts, but proven applications of multimedia, based on established technology. As the technology improves in cost and performance, the opportunities become easier to turn into cost-effective implementation.

Knowledge Management

Knowledge is information put to use. Multimedia offers the opportunity to manage knowledge rather than just information. Fundamentally, multimedia is about making information natural by appealing to our senses of sight, hearing, and touch. Historically, computers have limited information to that to which our intellects can respond. By making information more naturally absorbed and by extending the types of information that can be captured, stored, and communicated, multimedia marks as radical an advance in the value of information technology as personal computers were to centralized mainframe computers.

Knowledge is the currency of business in a time of change. Companies recognize that learning, adaptation, speed, and flexibility are critical to organizational success. We talk routinely about the learning organization, but information technology is not routinely finely seen as part of building it, because "knowledge" and learning haven't been embodied in our computerized information systems. It is estimated that less than 2 percent of the basic information used in a company is stored on computers. The rest is in filing cabinets, on paper, and in people's heads. If multimedia raised that figure from just 2 percent to just 4 percent, a very practical target today, or 10 percent, a very practical target five to ten years out, think of what it could mean for managing knowledge as a corporate asset.

Information is not at all the same as knowledge, but it enables knowledge. As many people have commented, our society is flooded with information that we don't know how to access or use. Adding more information may not add more knowledge. However, adding more information in the form most natural to human understanding may help people to build knowledge. Multimedia definitely reduces the time and effort needed to interpret many types of information. By including documents, video, and audio in the range of information that PCs can easily and quickly access, it also immediately extends the 2 percent of information available for building and sharing knowledge. Some of the business leaders mentioned here have been those insurance companies that are the most customer focused. For these firms, customer service is not the complaints department; responsive customer claims processing is the basis of service and personal interaction. These companies were pushing the edge of multimedia technology before the term came into vogue and before the available tools matured enough to merit their own label. USAA, an insurance company, was the first firm to use scanners to incorporate any type of document, including handwritten letters, in the files that captured the entire customer relationship. Progressive Insurance used mobile vans, radio communications, computers, cameras, scanners, and audiotapes to speed up claims processing, to the extent that on occasion it has issued a payment check to the policy holder as the damaged car was being towed away.

Through its use of hypertext and hypermedia - tools that link one piece of information to other relevant information items stored on other computers - multimedia helps people make much more effective use of all the information available to them. By making it easy and cheap to browse through large volumes of information, it encourages exploration that might be possible but not practical otherwise. CD-ROMs are an example. People who wouldn't think of buying every telephone directory in the United States in order to track down old high school friends don't have to take this expensive and active a step. They can instead, for around $15, buy a CD-ROM containing every phone number in the country. They may leave it unopened four months and then, any day they feel like it, start playing around with it.

The success of the World Wide Web shows how thirsty people are for information they can assimilate and use, and how wide a market there is for communication and the building of new electronic communities. One of the most interesting aspects of the Internet phenomenon is that its explosive growth has come almost in spite of the technology, rather than because of it, in the sense that it is slow and unreliable, with constant electronic traffic jams. But millions of new users put up with its aberrations because it provides something of great value to them. The very same communities have been unresponsive to many other far more "elegant" technologies because they don't see the value of those technologies.

Much of this value comes from telecommunications. The growing reach of networks across the organization and to the outside world make information easily shared. The explosive growth of the Internet and the equally rapid use of its technology within companies ("intranets") demonstrate the role of networks as the information carriers of our age. Networks move information. Multimedia humanizes it. It also augments much of the everyday media we use. Videos capture reality; virtual reality simulates it and even creates realities that may never exist in the real world. Photos capture images; software tools for morphing, 3-D, and animation take those same inputs and create entirely new ones.

Perhaps the single highest-payoff opportunity of multimedia in the area of knowledge management lies in training. Study after study comes up with the same conclusions: multimedia halves training time and increases retention by around half. Five years ago, the investment needed was too much to justify even these impressive benefits. Now, the investment is on the desktop computer, not in an outside studio.

Such innovations are providing substantial contributions to building the type of organization that companies see as the blueprint for success in the 1990s and beyond-customer centered and built on communication and learning, with a labor force slimmed down by the downsizings of the past few years but leveraged by training, technology, focused management, and true empowerment. The technology of multimedia is proven and getting cheaper and more powerful every few months. If the old adage that knowledge is power is to become a truth rather than a truism, multimedia will be a cornerstone of knowledge management.

A Caveat: Knowledge and Information Fallacies

Multimedia brings information to people in forms that are natural for them to assimilate and respond to, because it so directly corresponds to the media of our everyday life and to our innate senses. This naturalness can help build knowledge and expertise. This is not the same as just bringing information to people. For businesses to get value from multimedia, they need to avoid the knowledge fallacy that information directly translates to knowledge. It underlies phrases such as "the Information Superhighway," "the Information Age," and "the Digital Society." The knowledge fallacy is very similar to the information fallacy that did so much damage to the credibility of the management information systems (MIS) profession in the 1970s. That fallacy holds that data translate directly to information. The data processing (DP) field renamed itself MIS in the 1970s and used the power of its centralized computers and transaction processing systems - payroll, accounting, sales, and inventory-to produce voluminous reports. The DP field assumed that the data in those systems constituted the base for management information, which they saw as their organizational mission; hence the widespread adoption of MIS as their signal of identity. The academic journals, professional societies, and leading conferences reflected this: MIS Quarterly was through the 1980s a leading journal partially funded by the business Society for Information Management, for instance.

MIS too often turned out to have little to do with management or information, and far more to do with accounting and data. It provided detailed historical reports about internal operations but could not provide more useful external competitive news, customer feedback, or reports customized to individual users' needs. Generating information of real value in management planning and decision making came from new tools of (1) computer terminals with software that accessed the data on central "host" machines and manipulated it to turn it into information - data with meaning - and (2) from PCs, which both transformed the costs of information management and provided user-friendly software that removed the need to rely on expert intermediaries, such as systems analysts and computer programmers. We are now an information-rich society as a result.

Are we a knowledge-rich society, though? Companies are recognizing that just providing information is not the same as creating knowledge or turning knowledge into expertise. People do that, helped by training, experience, support, and reward. Data are not information. Information is not knowledge. Knowledge is not professional expertise. Data enable information. Information enables knowledge. Knowledge enables expertise. Knowledge management is thus the link between the information resources that an organization can build and how it uses those resources to help grow professional expertise. If the learning organization, empowerment, teams, and the like are to be more than just slogans, companies must exploit the sequence of adding value: that sequence builds from data to information to knowledge to expertise.

Multimedia can amplify all the links in this chain. Its technology allows cost-efficient generation and processing of data that previously could not be handled in digital form; video is an example. This in turn allows firms to expand the range of information they can include in their information technology base, gathered from a range of external and internal sources. The multimedia presentation of information in visual, tactile, and auditory form makes it easier for people to derive knowledge from it; the widely reported halving of training time and increase in retention are evidence of this. Giving capable people the best information in the best form for them to use it in their work gives them the best chance to build new expertise.

Most of the discussion of multimedia today focuses on the data element in the data to information to knowledge to expertise value chain, mainly because it is the liberating and enabling force. It is liberating in the sense that it removes the many constraints on the creation, storage, and movement of data and hence on its use of data to provide information. It's enabling in that it makes practical and cost-effective (the two are obviously not equivalent) many business and organizational innovations. It is the astonishing and increasing data capabilities of multimedia that create the technical opportunity to transform information management. It is management and worker acumen that will exploit this information opportunity to create knowledge and then apply that knowledge, but they need the data in the first place to turn the opportunity into payoff.

That opportunity is sitting there waiting for the firms that can grasp it. Today, multimedia is discussed mainly in terms of data - the raw processing capabilities of the technology. Many of the terms and concepts defined and discussed in the Glossary address these capabilities. Without these purely technical enablers, multimedia is impractical or even impossible. Each innovation in the technology is fundamentally an innovation in data handling. Each innovation in its use is just as fundamentally one of using the information multimedia provides from the data to build knowledge and expertise. The link from technology to use is not automatic. That means that the wonders of multimedia will not automatically generate value; management does that.

Customer Interaction

Customer interaction - advertising, selling, education, service, and support-is a process of interaction. Just about any mode of human interaction is obviously enhanced by shifting from the impersonal, abstract, and artificial to their opposites. Because multimedia reduces the cost of creating and accessing the natural media of everyday life, such as videos, photographs, sound recordings, animations, and so on, it has opened up many ways of interacting with customers, whether through electronic catalogs, low cost CD-ROMs packed with interactive information on products, or more complex and uncertain new shopping and information channels, such as the Internet.

The basic logic of multimedia for customer interaction is "show," not "tell" - how the product, let people select what to look at, and give them the opportunity to ask their own questions and get answers in the form of videos, photos, animations, and the like, instead of just words. Let them then interact with your sales staff with dear pictures in their minds of what they want and what they will get.

Despite the growing successful uses of multimedia for customer interaction, there are so many innovations that have failed to generate payoff that it is clear there is no guaranteed road to success. The allure of the Internet and interactive television as electronic channels for selling goods and services faded quickly when an encouraging 2,000 accesses to the information per day resulted in a discouraging 20 orders (the Internet). Instead of the heady predictions of interactive TV's generating profits of $8 to $10 billion by 1990, the accumulated losses were over $1 billion.

There are, though, enough successes for many lessons to be learned from the growing numbers of firms that use multimedia to interact with customers not just broadcast to them. Kiosks, for instance, help customers explore options and information before interacting with sales staff. Skilled development of interactive menus on the Internet's World Wide Web provides customers with contact with knowledgeable staff, something too often missing in large, warehouselike retail stores. As mentioned earlier, multimedia is a major force in the ongoing and rapid transformation of car sales. Early 1996 saw a flood of articles in such publications as Business Week, Fortune, and The Wall Street Journal talking about the inevitability of the collapse of the dealer as the controlling channel. The theme emerging from these articles is that customers find the interaction with the new channels, of which multimedia is a core component, much better simpler, less worrisome, faster, and under their control, not the salesperson's.

Examples of the payoff from providing customers with multimedia kiosks have been given earlier in this introduction - Florsheim's estimated 20 percent increase in sales productivity, Daewoo's saving 5 percent commissions on car sales, and CarMax's creation of an entirely new way of selling used cars. To this may be added Consumers' Catalog Showroom, which reports a 50 percent increase in accessories purchased with items such as cameras all as a result of kiosks. The system allows people to locate specific products by name, shows pictures and videos, and identifies alternatives. Once the sale is made, it suggests add-on accessories, such as film, tripods, and filters to go with the camera.

Over time, multimedia will obviously have major impacts on the core of customer interaction: advertising. So far, though, large firms that have rushed onto the Internet to set up World Wide Web sites have been disappointed by the results. Simply providing electronic versions of corporate public relations handouts and static on-line ads is not at all the same as customer interaction. Smaller firms have shown that, by focusing on a two-way dialogue with customers rather than providing a passive one-way information flow, they can generate incremental revenues, albeit relatively small ones. For example, Virtual Vineyard, one of the best-known successes in selling over the Internet, offers customers a variety of discussion groups, facilities for sharing evaluations on the wines they purchased from the firm, and on-line lessons from experts about wines. Ford and Volvo have set up Internet sites where people can evaluate their products and provide input about designs. Multimedia is only a small element of these and similar services; it is the interaction, not the media, that seems to explain their successes and other firms' relative failures.

Natural Decision Input

The limitations of computer information mean that, in many instances, when decision making would naturally benefit from visualization, only numbers are available. Foreign exchange trading rooms are packed with screens showing changing exchange rates; traders really want to see how the market is moving. In one bank, the numbers are displayed literally in the air, as three-dimensional graphs dynamically animated with highlights of color and movement. Our everyday world is naturally three-dimensional, but engineers and designers who rely on CAD/CAM simulations (computer-aided design and manufacturing) have been limited to a 2-D flatland. Multimedia makes these three-dimensional - and more natural.

Multimedia facilitates visualization, through animation, 3-D graphics, virtual reality, interactive video, and fast display of graphical information as part of decision processes. Visualization is central to everyday human thinking and to synthesizing large volumes of data In engineering, medicine, foreign exchange trading, facilities planning, real estate, and many other areas, the old adage that "A picture is worth a thousand words" becomes "A multimedia organization of pictures, words, animation, movie, and sound can be worth a thousand pictures, graphs, tables of numbers, and words." It is for this reason that animated simulations are being used more and more (and more and more controversially) for reenacting events in court cases to help jurors assess evidence. Three-dimensional graphics and simulation are of growing value in design and engineering. Visualization through multimedia is becoming important to financial traders, who are using it to organize the welter of numbers that flows across the foreign exchange, securities, and bond markets, in order to better see market patterns and movements in a business where 20 seconds may see a shift that demands immediate decisions.

It is only within the past few years that computers have supported visualization at all, through software that can turn spreadsheets into graphs and wordy transparencies into color presentation graphics. Multimedia offers a step-shift improvement in every area of information management relevant to visualization, making it the base for the next generation of decision support, executive information, simulation, and modeling systems. You can guess at the difference between the systems of today and just five years from now if you can find in your files a management presentation from five years ago. It's almost certain to have been a black and white collection of bullet points, shown on transparencies. Today's equivalents are almost certain to be in color and much more graphical; they may include "clip art" symbols or use one of the slide layouts provided by such graphics presentation packages as Microsoft's PowerPoint. Five years ago, a top quality presentation meant paying an outside company $20 to $50 each for 35-millimeter slides. Now, it more often means displaying your PowerPoint slides from a laptop computer.

Look ahead five years. The differences will be at least as great. Obviously, just as color, clip art, and transition effects-fade ins, zooms, and the like-are sometimes used as gimmicks and can detract from the ideas, multimedia may often be used to dress up a poor presentation by adding garish overkill. However, just as the color graphics of today's management presentations are more communicative, memorable, and meaningful than those of the black-and-white word era, multimedia will add to the communication of meaningful information that is a foundation for effective decision making.

In manufacturing, there have been many successful uses of multimedia to help technicians diagnose problems. Xerox's General Fault Analysis system walks them through the process of analyzing electronic faults, with schematic diagrams, scripts, photos, and video clips on what to do and when. Nortel, the telecommunications equipment manufacturer, uses a multimedia system that shows technicians which tools to use in handling delicate microelectronic components, how to position them, and even what hand motions to make. Technicians can repeat the video clips and call up more detailed diagrams. One interesting common feature of the many multimedia systems of this type is their multiple uses, as well as multiple media. They are used in training as well as decision support. AT&T can't train its 2,000-specialist staff in how to manage blackouts by using live equipment, so they used to fly them into corporate headquarters. Now, they train by using a diagnostic multimedia system that breaks problems down into dozens of subtasks and provides instructions on what to do. Alyeska, an oil pipeline company, uses a comparable multimedia system to prepare staff for to deal with leaks and fires which valves to open and close and which alarms to set off.

Many of the systems used for such internal training and decision-making help are being given to customers to use. The Nortel system has been modified so that technicians on customer sites can handle their own diagnostics and limited repairs. This eliminates dependence on Nortel's own staff, who must travel to the customer's location, speeds up diagnosis and repair, and of course saves money for both Nortel and the customer. In many instances, multimedia itself is being used to augment decision analysis. McCaw Cellular's service staff troubleshoots phones over the phone by playing audio tones digitally stored on their workstation until the customer recognizes the sound that indicates the problem. They can then provide the customer with information about how to solve it.

Shared Understanding

When people meet to collaborate or form teams, some of their main tools for working together are blackboards and pencils. When you try to explain your ideas, you are likely to reach for a piece of paper or a restaurant napkin on which to sketch a diagram. However much you may read the newspapers, it's CNN news or CBS's 60 Minutes that you most often remember. You ask friends, "Did you see.. . . ?" Multimedia can greatly improve shared understanding through shared seeing, as a group of citizens and town planners together watch a visual simulation of traffic flows through a planned shopping mall; as customers and marketing staff work with engineers by "driving" a new car on the screen; or as executives present their plans to an audience of financial analysts or staff through video, animation, and sound. Two minutes of a video of customer comments plus animated product photographs, and video simulations of new stores, may immediately bring to life a lengthy market survey report, for instance.

The use of animation in court cases, mentioned earlier, illustrates the value of multimedia in creating shared understanding. In 1985, it cost around $250,000 to produce a five-minute animated video simulation of some event that was acceptable as evidence. Now the cost is just $5,000. Think of yourself listening to an attorney describe what happened in an accident in a hotel diving pool (a real case in which animation played a major role). You hear from the plaintiffs counsel how the diving board was too short, so that when his client slipped as she was making her dive, she caught her head against the side of the pool. The defense counters that she could have fallen this way only if she were fooling around. Counsel for the plaintiff argues that, if she slipped as she were about to tuck up her knees and roll forward, her panicked effort to recover her balance would have thrown her body weight back and to the side. Other points of contention concern the design of the pool and access to it, mistakes made in pulling her out, and the nature of her injuries.

The actual animation in this case was built up from photographs and videos of other people diving from the board. It simulated the client's dive, as well as what would have happened had the board extended farther out. It showed how the gap in height between the edge of the pool and the water contributed to her neck's being paralyzed as a result of how she was pulled out. The animation gave jurors a clear illustration of both the accident and what might otherwise have happened if the pool and board were designed differently. They had a common and concrete set of images in their minds, and the attorneys had equally concrete images to show in support of their own arguments. It is difficult for ordinary people to envision such a situation from words alone; the animation did the work for them. The power of such animations is so strong, in fact, that some jurists are concerned that simulations confer "pseudomemories" on jurors, giving them the feeling that they witnessed the event and that this can be the source of shared misunderstanding. That concern acknowledges the effectiveness of this multimedia tool (the woman won her case).

Another striking example is a government agency's "morphing" photographs of children who have been kidnapped or reported missing when they were very small. In this instance, photographs of a very small child plus those of parents and siblings were morphed to show what the child was likely to look like 10 or more years later. In one instance, in which the morphed photo directly led to a child's being located by an immigration official who recognized the likeness, FBI agents wanted to know how the agency had gotten the photo; it was so accurate they were convinced it was real.

In many areas of business, effective understanding between salesperson and client or between designer and producer similarly rest on each being sure that the other has a dear picture of what is involved. If you look at the ads in suburban newspapers, you will find more and more landscape gardeners offering multimedia simulations. They take a photograph of a home using a digital camera like the ones offered by many consumer electronics firms such as Canon and Sony and overlay on it photographs of plants and trees the customer is interested in. Denmark's largest real estate firm similarly uses a multimedia personal computer to enable customers to browse through its listing of available houses. Customers can look at interior and exterior photographs, location on maps, and floor plans. One executive comments that, without the system, potential buyers typically look at 15 houses before deciding to buy. With it, they look at 7 or 8. The company has reduced its overhead while increasing sales by 50 percent; the executive directly attributes this to the multimedia system.

Similarly, a sporting goods retailer uses a multimedia expert adviser to help a customer select the right-size tennis racket and the right grip; that choice significantly affects a player's performance but is often made on the basis of either a sales rep's recommendation or an uninformed response to the look and feel of a racket. The multimedia system analyzes the customer's replies to 10 questions and then demonstrates via video 5 recommended models from a database of over 100 from all manufacturers.

Summary: The Business Opportunity Checklist

In all these examples of knowledge management, customer interaction, natural decision input, and shared understanding, two distinctive features of multimedia emerge: simulation and a common base of images. Simulation has always been one of the main tools that modern computing uses to facilitate what if? analyses. Examples are the use of spreadsheets for evaluating the impact of higher interest rates, sales volumes, or price changes, and the widespread reliance on CAD/CAM modeling in manufacturing design. Multimedia is a natural extension of these, which goes beyond them in the variety of what it can simulate and how that simulation can be presented. The core of its presentation is sensory, rather than intellectual. The sensory element of multimedia is most often exploited for games and entertainment: virtual reality, 3-D,animation, and the addition of music and vivid images. Images are thus the core of shared understanding in simulations, in the types of diagnostic and training systems described above, and in the tools used for customer interaction. With games and entertainment, the goal is often to invent a new sense of reality, films like Terminator; Jumanji, and Jurassic Park are striking examples. For business, the opportunity is not to invent a reality but to communicate a sense of a reality relevant to the business purpose, whether it be knowledge management, customer interaction, or another goal.

Viewed in this light, all the multimedia technologies in all their applications open up business opportunities. The morphing tools used in Terminator to turn human flesh into flowing metal can also be used to simulate what a patient's face will look like after plastic surgery, what a missing child looks like now, or how a chemical reaction will affect materials. The animation tools of Jurassic Park, scaled down in power and cost, can simulate what it would feel like to work in a planned new building, so that the client and the designer can communicate with each other about proposed changes. The animations of Toy Story point toward low-cost training program material that can get ideas across easily and quickly. The virtual reality tools that create games like Starwave can also create down-to-earth simulations of backhoe loaders and submarine interiors.

The very flashiness of much multimedia and its heavy focus on entertainment gives it both an immediacy and a distance. The immediacy lies in its vividness, which can also obscure its business potential. Most of my examples of successful company applications of multimedia are in no way as glamorous and exciting as Jurassic Park, many are quite boring - training programs, kiosks in shoe stores, and diagnosis of cellular phone problems. In the short term, multimedia dominates awareness through the drama of its technology and its entertainment focus. In the long term, it is equally easily seen as a "gee-whiz" development that points the way toward a brave new cyberworld.

The management challenge in handling multimedia as a business resource is less the short term or the long term than the intermediate term-in particular, the three- to five-year time span between being there when demand takes off and either moving too early and ending up at the famous "bleeding edge" of information technology, or moving too late and being forced into a catch-up position by competitors. The short-term approach is simply to be opportunistic. Because there is no clear basis today for targeting multimedia opportunities, most companies' pilots and applications are fairly ad hoc. They are unlikely to get out on an expensive limb by moving too early, but they are also unlikely to locate more than obvious, small-scale opportunities. For the long term, it seems reasonable to assume that, at some stage, interactive television, home shopping, home banking, the Internet, and other telecommunications and multimedia vehicles will substantially change business and society. That assumption either pushes toward the ambitious investments of firms such as Bell Atlantic and Time Warner in interactive TV or toward a wait-and-see approach - wait until someone else provides the market and then follow as fast as is practical.

The intermediate-term strategy requires making decisions now in order to get value soon, carefully piloting technology and applications where needed, but within the framework of the wider business opportunity map. Piloting the technology for its own sake just to see what happens is the more reactive, short-term approach. Shown below is my own simple checklist grid for identifying high-payoff opportunities for multimedia, based on the four areas of business opportunity I've identified. Take any key operation, activity decision process, customer service or management responsibility in your organization, and jot down a simple yes-no classification in the grid. I suspect that you'll be surprised at how many yesses there are.

Wherever there is a match between the columns of this checklist that identify areas of business opportunity and the rows that identify the relevance of multimedia, this is a multimedia opportunity.