TRENDLINES -- Why IT Changes Everything

TRENDLINES -- Why IT Changes Everything

Forward-looking professors at Georgia Tech hold forth on how IT and the Information Revolution are changing the way the business world works.

The Participants

Gary Tjaden, director of the Center for Enterprise Systems; adjunct professor in the College of Management, Georgia Tech Alan L. Porter, professor of industrial and systems engineering and public policy; director of the Technology Policy and Assessment Center, Georgia Tech Judith P. Carlisle, assistant professor in the information technology management group in the College of Management at Georgia Tech until June 1998; now at Texas A&M University, College Station, Texas Peter G. Sassone, professor of economics and management technologies, Georgia Tech Daniel S. Papp, interim president of Southern Polytechnic State University in Marietta, Ga.; professor at the Sam Nunn School of International Affairs, Georgia Tech Editor's Note: We regret to report that Peter G. Sassone died unexpectedly in August. He received wide recognition for his analysis of information systems and their effects on efficiency and decision making in management, and he was also noted for his research on large infrastructure investments.

MOST EXECUTIVES FIND IT DIFFICULT enough to stay on top of current information technology practices. The future can wait. Or can it? Business leaders would do well to anticipate how IT will change the ways their companies operate and employees work, as well as how it will alter the increasingly global economic and social environment they inhabit.

At the Georgia Institute of Technology, home to a hands-on approach to technology, a group of experts from fields as varied as engineering, economics, architecture, management and public policy is looking beyond today's IT challenges. Five members of the group, whose findings were published as The Information Revolution: Current and Future Consequences (Ablex Publishing, 1998), joined Senior Writer Gary Abramson in July for a roundtable discussion at Georgia Tech's campus in Atlanta.

CIO ENTERPRISE: How is information technology changing the way companies operate? Tjaden: We've looked at a database of about a thousand companies, and it turns out that about 80 per cent of businesses are spending more on information work and [on creating intellectual assets] than they are on the cost of covering their capital. If you're that kind of company then you should be focused on getting returns on your information work as opposed to returns on your fixed assets or any other kind of capital. That seems to be one thing that knowledge enterprises are focusing on.

How does this change the way businesses organise themselves and the way their employees work? Tjaden: Think of what happens if virtually everybody in an enterprise is a knowledge worker-somebody who has the ability, authority and responsibility for determining what they do and how they do it. They're actually decision makers.

You've empowered all these people.

What you don't do with knowledge workers is tell them how to do what they do.

They're the experts. What you want to do is get them all doing their thing together, because knowledge is the one inexhaustible resource. The more of us that get together in a room like this and share ideas, the more new knowledge we're going to create. The key is how do you get knowledge workers to share this knowledge, produce new information and use it in a new way? Papp: I think the emphasis there has to be in a new and productive way. The way we access and use that knowledge could lead to productivity, or it could in fact lead to confusion.

Carlisle: The technology itself changes the way [business is done]. At the University of Arizona they're very involved with decision support systems. In these systems you have a lot of people interacting with PCs rather than interacting with each other. So you're typing comments into PCs, and the comments are anonymous. These systems are very good at building consensus in really diverse groups. But they have an effect of people not putting their best ideas into the pot, which they might do in a face-to-face situation in which they would get credit for their ideas. If they do it anonymously, they don't [get credit].

So the actual technology, even though it kept large group meetings moving, had the effect of [leading] to decisions that weren't as effective. But you had people committed to this [approach] because it cost quite a bit of money.

Are today's companies getting all they can from IT? Sassone: In terms of business use of information technology, in the last maybe three, four or five years, everybody looks like a genius because the economy has been doing so well and some companies are posting record profits.

There's some tendency to say, "Well, you know, IT is finally paying off." I think there's very little data to support that. There's very little data not to support it, but there's very little data period. A number of important factors like low energy costs, demographics of the baby boom, the end of the Cold War and so on probably fuelled a whole lot of these good times.

Many businesses are relying on greater access to customer information for growth. Will consumers ever refuse to cooperate because they do not want someone who knows where they vacation, shop and send their kids to school calling them at home? Porter: I think if the company that wants to use the information does so judiciously, there's plenty of room for effective exploitation. And if you don't do it that way, then there'll be rebellion. People will block you.

Carlisle: We've already seen the backlash of information gathering from America Online, when it was going to publish on CD information about some of its customers. Suddenly, we have abilities to do data analysis that we've never had before. And [the fact that companies know so much about their customers] is not meshing with people's knowledge of the world they know.

Tjaden: That's true with anything new. You can conceive of a new tool, a new way of doing something. And to you it seems perfectly normal and logical. But have you ever tried to start a company based on a new idea like that and get other people to even understand what you're talking about? That's the entrepreneurial challenge.

Will the adoption of videoconferencing and other new technologies fundamentally change the way people work together? Papp: One of the interesting things about videoconferencing is that immediate human interaction disappears. And there are a lot of people out there who do like first-person interaction.

Carlisle: The notion of having a permanent record of interaction between people-and knowing that somebody else can come and pull that up 10 years from now or tomorrow and see what was actually going on in a room-might affect this interpersonal behaviour.

Sassone: There's been a lack of acceptance, too, of technology to electronically facilitate meetings. Ten years ago it was thought that this was the wave of the future for business meetings, because now we'll have everything down exactly the way it was spoken. And it hasn't happened, at least in many cases, because people don't want their words recorded verbatim-they want some wiggle room.

Carlisle: Sometimes I think there's a potential for a huge social negative reaction to information technology, and that either we're going to have to pull people kicking and screaming into the Information Age or abandon it.

Papp: Many people are more than willing to take on new technologies if the resources have been set aside to show them how to do it. But too frequently, people get given the new technologies and the training resources are almost an afterthought.

Carlisle: I'm kind of averse to technology. I think that we're living our lives much, much faster. We're having many more interruptions in the way that we do things, as we walk around with our cell phones and our personal faxes and our pagers. And the amount of work that we have to do in an 8-hour period is increasing dramatically. But we don't work for 8 hours anymore; we work for 10 or 12 hours.

How do you think people will adapt?

Carlisle: I am not sure that people can adapt. And I think that as people become more educated and start to see what this technology is about, they might not want to integrate it into their lives so much. And so many of the predictions that we're making about the need for IT and its integration and acceptance might not actually come about.

Porter: It's going to be the technology that evolves, and we'll evolve with it.

Desktop videoconferencing and our initial expectations will evolve, and we'll change it or use it for something nobody thought of quite that way.

Sassone: Technology will evolve to solve the kinds of problems that you were just talking about. For example, automatic phone screeners, automatic e-mail screeners. I think the technology companies will address those issues. And so you will be able to have more privacy if you want it.

What's the impact of the Information Revolution on companies that operate globally? Papp: Globalisation, which is in part a phenomenon of the capabilities of these technologies, gives us the capability to talk with, to see, to send information [to people] anywhere in the world at a moment's notice. But there are a lot of people out there-and not all of them are necessarily in Iran or Iraq or Cambodia; some of them may be right here in the United States-who simply don't want those alien ideas, those alien bits of information, those alien concepts to affect their established ways of doing things.

That is one of the real tensions that the Information Age brings with it. The potential to go global versus the resentment of individuals who see their established ways of doing things shattered. And shattered is the right word.

Tjaden: The Information Revolution forces a business to go from mass production to mass customisation. If the customer is in Iran, what he's going to want is going to be different than if he's in the Sudan. The role of a successful business in the Information Revolution is to figure out how to satisfy those [differing] demands.

[But] if you have a high information-based product and you want to sell it in Saudi Arabia, you better make sure they not only want it but have what they need to use it. Say you want to sell a PC in some poor African country. That's not going to happen if they don't have electricity, if they don't know how to type.

Sassone: It's in the interest of business to solve that problem. So how, in fact, does the infrastructure required to support the underpinnings of the Information Age get built? Tjaden: Some of it may just be by-passed. Look at what's happening with low earth-orbiting satellites and telephones. With that technology, you do not have to lay wires in sub-Saharan Africa to have the same kind of telephone service that you and I have.

Will IT change the balance of political and economic power around the world? Papp: Here is what, to me, is the most fascinating issue coming out of the entire Information Age: To the extent that information technology leads to wealth creation, and to the extent that the ability to use the new information technologies is limited to certain actors-whether they be states or multinational corporations or governmental or nongovernmental organisations-information technology has the potential to lead to an increasingly skewed pattern of the distribution of wealth globally, between societies and within societies. The business question and the public policy question is, How do we better solve the problem [of wealth distribution] in the future? Tjaden: I claim that it's self-correcting and shouldn't be worried about.

Multinational corporations are highly motivated to distribute whatever they [create] across as large a market as possible. And they're going to be forced to do that, using mass customisation as opposed to mass production. That movement today is more powerful than national governments.

Sassone: I would expect to see over the next 10 or 20 years perhaps the rich get richer and the poor get poorer.

Porter: I think the [disparity] will become greater because the bases for generating wealth are shifting. Our whole system of wealth allocation is built around an outdated industrial era scheme which said you reward labour and capital. And that's changing. Now what should replace it? I don't know. But the thing that scares me is I don't see who would be in a position of policy authority to effect a change, because it's such a global environment.

Carlisle: Information technology adoption creates a lot of chaos; that's its biggest impact everywhere. But you can start to see that perhaps individuals or groups that traditionally have not achieved wealth through conventional ways perhaps have the means now to start achieving it [through IT]. Just think about kids from economically disadvantaged backgrounds who can get their hands on a PC. And perhaps they don't have a good school, but they can find some sort of software package and learn calculus and stuff that they might otherwise not have had access to.

Suddenly, a country such as India, which didn't have a great opportunity for wealth-building before, does have that ability.

How will global information access change the way businesses and governments operate? Papp: We are seeing information flow across and between borders, driven by Amnesty International and other human rights organisations, that is influencing the way some governments treat their people. Nongovernmental organisations like Greenpeace and Environment Watch are [playing] a major role in influencing governments to stop nuclear testing programs.

Carlisle: Things that we wouldn't have known about, such as Nike's labour practices in emerging market countries, are now common knowledge.

Papp: You take IT out of it, and we don't know how Nike gets its shoes. And suddenly what is a major issue for Nike, and a host of other businesses as well, winds up disappearing.

What limits will businesses come up against in exploiting technology? Tjaden: One limitation of business [will be] the availability of knowledge workers and the ability of any enterprise to organise knowledge work productively. We don't know a lot about how to do that. Only about a third of the adults in this country have a college education. And I don't know that it takes a college degree to be a knowledge worker-Mr. Gates, of course, is a good example. But it takes more knowledge and more education than less to be a good knowledge worker.

For businesses critically dependent on IT-driven information, what are the risks? Carlisle: Once they adopt a technology, organisations are not going to be able to survive a technological failure. Let's say that you're providing a service [based on analysis of information], and you have a contract. And you know how your service can fail. You can protect yourself in your contract to not be responsible for consequence of failure. But if you don't know the potential for that failure-which people don't-then you can't protect yourself from it.

Is there also a risk of a broad economic failure if the IT infrastructure is damaged? Papp: Potential for catastrophic failure, either intentional or unintentional, was really underlined a year ago in President Clinton's [Commission on Critical Infrastructure Protection] task force report. [And that report] is just spooky when it comes to underlining the impact that failure, for whatever reasons, of software that drives most of the structures of American life today could have on the way society operates.

It seems we are a long way from becoming masters of our own technologies.

Papp: The best, simple way to illustrate that point is going back [to last May] when the satellite went down. How many of our friends-heck, we did it ourselves-commented on how great it was not to have that beeper going in our pocket continually? But how many of us also said that the reason that we can't turn the beeper off, even when the satellite comes back on, is because everybody in our office expects to get in touch with us. It's just now the way we think and what others think: They expect us to be in touch immediately as a result of technology.

The Europeans do it right. They close down for August.

Tjaden: One of the basic principles of the learning organisation is personal mastery. Personal mastery implies that you've developed yourself to the point where you will turn that beeper off if that's the right thing to do for your basic effectiveness. If businesses are really going to tap into the fruits of the Information Revolution, then we do have to train people how to operate in a learning organisation. And that's one of the things that you have to learn.

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