Every Manager's Guide to Information Technology:

Extract (4): Digital

The entire field of information technology is built on the astonishingly simple ability to represent all types of information as the presence or absence of an electrical signal. These elements, termed bits, are represented as ones and zeros, just as the Morse code uses dots and dashes to indicate letters and numbers. Complex electronic circuits can transmit these digital signals as pulses at rates of millions and even billions per second. The streams of discrete bits can be stored, compressed, checked for errors, and routed efficiently, with dramatic improvements in accuracy, reliability, and speed. The 0-1 digital base, used to signal on-off, true-false, yes-no conditions, allows logic circuits to be built to handle calculations quickly.

It is helpful to contrast digital representation, processing, and communication of information with the analog techniques that have long been employed in telephone communication. A telephone creates, in the form of a continuously varying electrical signal, an "analog" of the sound waves generated by the human voice. This analog signal can be converted to a digital signal by sampling it at a sufficient number of points to enable it to be reconstructed at the other end and coding the samples as combinations of bits, which can then be transmitted as pulses. The difference between digital transmission of discrete bits and analog transmission of a continuously varying signal has been likened to the difference between a staccato burst of machine gun fire and a wailing siren of varying intensity.

The managerial relevance of the distinction between analog and digital is that the communication of information-via all media, including telephone, radio, and television-is shifting to digital transmission. This opens a wide range of new communication options within organizations and among customers, suppliers, and partners, albeit often at considerable cost in terms of investment and potential disruption associated with replacing old systems with a new set of infrastructures.

So recent is the digital communication revolution that we can only guess what innovations it might stimulate. As digital transmission speeds increase, more and different kinds of information can be moved onto corporate networks. Coding a black-and-white photograph in digital form, for example, requires about 100,000 bits. To transmit that volume of data would take minutes over analog circuits but less than two seconds over a typical digital link. To take advantage of the innovations spawned by digital transmission, whatever they might be, firms must renew their information infrastructures.

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