Enterprise.com market leadership in the information age Jeff Papows.

Por:

Papows, Jeff

Detalles de publicación: Reading, Mass. Perseus Books c1998.Descripción: xvi, 240 p. ill. 25 cmISBN:

0738200646

Tema(s):

Clasificación CDD:

303.48/33 21

Clasificación LoC:

HC79.I55 P36 1998

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The ultimate insider's guide to the information economy, Enterprise.com offers the most incisive and powerful vision to date of the technology revolution. From his vantage point as CEO of one of the most progressive and widely known software companies, Jeff Papows offers a rare glimpse into the future of business, society, and culture in a truly networked world.Papows begins with the assumption that information technology (IT) has already permeated all facets of business--from automating systems and processes to empowering teams to redefining the most basic concepts of commerce (such as "customer," "market," and "industry")--as organizations come to grips with the dynamics of a truly borderless, twenty-four-hour world. He then takes these trends to their logical, and inevitable conclusion: the rise of the "market-facing enterprise," in which all relationships and functions are enhanced--even defined--through technology, and the focus moves from inside the company to its vast network of suppliers, distributors, customers, and partners.But Enterprise.com goes far beyond the traditional boundaries of business. Drawing from the pioneering contributions of Lotus, as well as showcasing examples from innovators in such diverse industries as insurance and aerospace, Papows explores the profound implications of the IT revolution.At his most provocative, Papows considers the challenges that lie ahead, especially as individuals, businesses, and governments clash over issues such as privacy, encryption, common standards, and regulations.

Includes index.

Extracto provisto por Syndetics

Chapter One THE NEXT WAVE In the midst of our current wave of economic prosperity, it's difficult to recall the time, not so long ago, when the conventional wisdom maintained that the American free-market economic model was obsolete. The true beneficiaries of the global revolution in information and communications technology were said to be Asian-style partnerships of government and business set up along the lines of the chaebols of South Korea and the kieretsu of Japan. Today, Asia is in turmoil while the United States, now in its sixth year of steady economic expansion, shows every sign of providing the new model for the global future. Unemployment is at its lowest level since the mid-1980s. Inflation, astonishingly, has remained in check. And, perhaps the best evidence of American competitiveness, there has been an unprecedented stock market expansion. Indeed, compared with the rest of the world--particularly, of course, Asia--the U.S. economic position has not looked this strong since the 1960s. To a degree almost unimaginable less than a decade ago, the American economy has become the envy of the world. How do we explain America's extraordinary economic success of the past several years? No less an authority than U.S. Federal Reserve Board Chairman Alan Greenspan has publicly stated his conviction that the prolonged, heavy investment by American firms--as much as $2 trillion, by some estimates--in information technology (IT) is the main cause of the unprecedented combination of low inflation and high GDP growth that we are experiencing. The visible benefits of this investment are finally showing up on corporate balance sheets. A less obvious benefit, but an equally important one, I will argue, has been the internal, structural transformation of many enterprises and industries in response to the new advances in IT. Absurd as it may seem today, not long ago American business was commonly blamed for being "shortsighted," "greedy," and "hollow." Fortune 500 multinational enterprises were widely considered the worst offenders--a collection of bloated behemoths and dinosaurs whose perverse penchant for restructuring, reengineering, and downsizing was denounced as exemplifying the worst excesses of an outmoded laissez-faire system. American managers were widely regarded as being obsessed with Wall Street and with their companies' ever fluctuating stock market valuations. Their shortsighted fixation on quarterly profit forecasts and results led senior managers (so it was said) to spend too much time with investors and traders and, by implication, too little time with customers and partners. This checkered outlook was widely perceived to be the very antithesis of the broad vision that U.S. companies needed to compete with the juggernauts of Asia. The decline in U.S. spending on research and development seemed, at the same time, to provide persuasive quantitative evidence that corporate long-term prospects were being sacrificed for short-term gains. Even the most globally successful American companies were often criticized for being too small or too "hollow," a critique typically accompanied by ominous warnings that our excessive reliance on offshore manufacturing in Asia and other places would soon come back to haunt us. This notion of "hollowness" extended far beyond manufacturing and was, in fact, most often used to describe America's ongoing evolution toward a service-oriented economy. A popular wisecrack of the time captured the mood: If we all charged money for doing each other's laundry or watching each other's children, our economic growth figures would surge. For many reasons, high-value services such as entertainment, health care, and finance were disregarded while fast food, gas stations, and day care were emphasized. Not only U.S. management took it on the chin. American workers were seen as increasingly falling behind the standards of the rest of the world. Here, the frequently deployed epithets were "unskilled," "spoiled," and "disloyal." There was certainly ample evidence for this view: In math, science, and literacy skills, Americans consistently ranked below other industrial countries. In view of the widespread predictions that our economy would be increasingly information driven, it was natural enough to assume that declining educational achievement would result in an increasingly noncompetitive workforce. Today, the tables have turned. With the Dow Jones over and again hitting new all-time highs, while Asia sinks into turmoil, it has now become clear that a critical relationship exists between heavy U.S. investment in information technology and the global competitive resurgence of the United States. According to some rough estimates recently published in The Economist , an amazing 42 percent of the investment capital base in the United States now goes into IT annually. Take a moment to absorb that remarkable statistic: Nearly half of U.S. capital investment is now spent on enhancing information technology . It might come as an equal shock that according to Business Week , fully 35 percent of growth in the U.S. GDP during the present recovery has been associated with growth in information technology. That's a mind-numbing number. Take a quick breath, sit back, and consider its staggering social significance. Not since the golden age of railroads in the late 1880s and 1890s has one industry had such a profound impact on the entire national economy. THE WEB AS ACCELERATOR Since it arrived on the scene as a full-fledged cultural and social phenomenon in late 1994, the Internet and its graphical interface, the World Wide Web, have come to dominate virtually all conversations about the future of technology and, by extension, the future of business. It is safe to say that the World Wide Web is simultaneously overhyped and undervalued. Looking back--not very far back--the scope of today's information technology revolution is staggering. The accelerating speed of the evolution of hardware, software, and communications easily justifies the term "web years"--meaning cycles of change lasting three months at most, in contrast with traditional business cycles that typically lasted a year or more. While major media coverage has, understandably, mostly focused on the Web's potential for transforming the consumer realm, the Web's real and as yet largely untold story is the great as yet unmined potential that lies in the realm of business-to-business applications and commerce. Undoubtedly, the Web's increasing ubiquity will bring about significant shifts in the consumer sector. But over the next few years, business-to- business commerce will substantially outgrow business-to- consumer activity on the Internet. Over the past decade, information technology has become a , if not the , defining element in business itself. Once confined mainly to intracompany activities, computerized interactions now reach across business, social, political, and geographic boundaries, compelling new ways of working, communicating, and organizing activities in both the commercial and personal realms. The once arcane realm of information technology is drastically redefining all of our core competencies and helping to construct new visions for the future. One of the most powerful concepts of the nineties has been the notion of an enterprise's "value chain." The value chain--an idea originated by Harvard Business School professor Michael Porter (the author of books on business competition and strategy, a former Lotus board member, and also my friend)--is the complex web of links between an organization and its suppliers, sales force, purchasing and distribution channels, clients, and customers. As Michael has shown, businesses benefit from enhancing and integrating the links among and between the key players in their value chains, utilizing a technique called "value chain innovation." But once enterprises have learned to do this, What comes next? In the next century, the central repository of enterprise value will no longer be a chain but a space . This amorphous realm is what technologists have presciently dubbed the "marketspace." The very notion of a value chain can be considered, from an evolutionary standpoint, the last vestige of the industrial era and the beginning of the postindustrial economy, with the Internet and the World Wide Web providing the catalyst for the next stage of enterprise evolution. The links in these chains are being rapidly broken up and replaced with a wider, broader, less orderly matrix of relationships, stretching far beyond the traditional boundaries of the enterprise--in fact, girdling the globe itself. THE MARKET-FACING SYSTEM AND THE MARKET-FACING ENTERPRISE The Web offers companies the opportunity to deliver either all or substantial portions of their business activities directly on line. However, successfully developing a market-facing system (MFS)--a component of information technology that creates a consumer experience defined by being on line--requires an unprecedented blend of business knowledge and technical capability. The challenge of developing and properly implementing market-facing systems is likely to alter, if not entirely eliminate, many of the traditional lines between operational and information systems resources. Although a successful alignment of business and technology goals has long been considered a business necessity, the advent of MFS has meant that forward-looking, technology-enabled enterprises must move beyond alignment toward integration , creating a tremendous need for managerial and organizational innovation in order for these Web- and Net-based systems to attain their full potential. Realizing the ultimate promise of business computing over the next decade will mean enhancing and integrating not only the links, sometimes still remote, between organizations and their customers, clients, suppliers, and partners, but also the links between the enterprise and the population at large. Most firms' key clients, customers, suppliers, and partners are apt to be located just about anywhere and everywhere in the world; this fact alone will compel a wholesale shift in organizational resources to an external and market-facing focus. The time will come--sooner rather than later--when an enterprise's primary connection to the outside world will be its World Wide Web site and its collaborative and messaging-reliant extensions. This new breed of organization--I'll call it the "market-facing enterprise" (MFE), with thanks to IBM senior strategist John Landry, who coined the term--will have radically evolved from the old industrial and early postindustrial style of business model into something entirely new and different. Before any such radical transformation can be completed, however--and there is no reason to think that it will happen any time soon--the competitive implications of such a sea change in the global communications and business environments are likely to outstrip any challenges that the information technology industry, or indeed private enterprise itself, will have faced up to by that time. THE THREE WAVES Without confronting the significant changes that information technology has recently wrought in the operations of large and small organizations, it's become nearly impossible to comprehend the roles that network computing, the Web, and Internet-based communications will play in redefining the modern enterprise. The information technology industry has rightly been accused of making many dramatic claims for business benefit. And the long anticipated, much discussed return on investment (ROI) has often failed to materialize. Nonetheless, we have seen a significant impact of one form or another through what I believe have been three distinct waves of change in our industry. Let's spend a minute getting a sense of these three waves, because the current wave is changing our lives. Wave One: The Back Office (Automated Accountants) The first wave, which lasted through the late 1960s and even the mid-1970s, was characterized by the then radical deployment of mainframe and minicomputers to automate and organize a wide range of back-office functions, including customer accounts, payroll accounts, and rudimentary database management. During this "back-office" wave, computers served business as highly efficient calculators and record keepers--in short, automated accountants. To perform these essential and previously labor-intensive functions, the first generation of IT managers employed centralized mainframe computer systems and hierarchical database management systems to track inventories, compile human resource data, and perform other basic accounting and general ledger tasks. Since many of these "legacy" systems automated manual tasks--and were employed almost exclusively for internal administration--their overall impact on a company's competitive position was relatively slight. Any enhancements in productivity that derived from this mode of office automation were largely ignored by senior management, whose decision-making processes remained almost entirely unaffected by the technological revolution taking place in the back office. Wave Two: The Front Office (Knowledge Workers) With the advent of the personal computer in the 1980s, however, computing leapt from the back to the front office, where it began to automate a large number of clerical white-collar tasks. This shift was still of minor concern to senior management--except insofar as eliminating and/or streamlining clerical functions helped the bottom line. However, during this second great wave of IT innovation, the foundations of today's "integrated enterprise"--heavily reliant on networking and "groupware" culture--were laid. This would later explode into the third and current wave of computing. Once company-wide office computing was handled by so-called "client/server systems"--consisting mainly of interconnected local area networks (LAN), organization-wide electronic mail, and document management systems, as well as corporate and departmental database systems--the efficiencies attained and the reorganizations required by these systems began gradually, if inconspicuously, to alter the fundamental nature of work, and of organizations themselves. Applications directed at so-called "knowledge workers"--successors of the old "white-collar workers"--tended to concentrate on personal productivity enhancement products such as word processing, spreadsheets, desktop publishing, and graphics presentation. It was, in fact, Lotus's own "1-2-3" spreadsheet that became the industry's first killer application, detonating the PC explosion that generated this second wave. At the same time, the business impact of office productivity was--self-deprecating as this may sound--a virtual drop in the bucket compared with the impact of the current and next (third) wave of computing. While an individual knowledge worker's experience on the desktop might have been enhanced by the first and second wave of systems, it was not until the widespread deployment of electronic messaging (e-mail), voice mail, databases, and other forms of information infrastructure that these often controversial, often underappreciated IT investments bore fruit. These innovations prepared the way for the "7 x 24 x 365 enterprise": the seven-day-a-week, twenty-four-hour-a-day, 365-day-a-year corporation, which was obviously a major leap forward. Wave Three: The Virtual Office (The Global Marketplace) The rise and global spread of the Internet and the World Wide Web, beginning in 1994, launched the third wave of the information technology revolution--the virtual office wave. The Net and the Web (in combination with the newly enhanced networking capabilities of the integrated enterprise) have resulted in a quantum leap in the evolutionary pace of organizational change. The Web and the Internet are accelerating the transformation of enterprises, both large and small, into globe-spanning market-facing enterprises, even as these same firms ceaselessly confront (whether they like it or not) the competitive realities of constant, universal access to the global marketplace. KNOWLEDGE NODES Like a movie star who is catapulted to fame and fortune by one big hit movie after a decade of laboring in obscurity, it was the huge success of the World Wide Web, the graphical interface for the Internet, that caused the Internet to explode into public consciousness. Consider these four terms, today in constant use but either little known or nonexistent a few years ago: intranets, extranets, the Internet, and the World Wide Web (WWW). These four elements, which combine to form the cyberspace world, are all of immense strategic importance in defining the competitive position of companies today and tomorrow. Let's look at them more closely. 1. An intranet is a secure, internal network that employs the power of digital information technology to promote the sharing of information and knowledge among employees of a single company. 2. An extranet employs similar technology to reach beyond the walls of the corporation outward to external communities in order to link businesses with suppliers, customers, and other businesses. 3. The Internet is the public information highway, a vast network of interconnected computers. Originally developed by the U.S. government to protect military installations from nuclear attack, today it is open to anyone with access to a computer equipped with a modem. 4. The World Wide Web , the fastest growing entity on the Internet, was created in 1989 at the European Laboratory for Particle Physics to provide easy access to pages of information through "hypertext" links. These provide any computer linked to the Web with instant access to information published on any other computer on the Internet, whether it be down the hall or across the world. It's critically important to recognize that each of these four "knowledge nodes"--intranets, extranets, the Internet, and the Web--is not a separate area of information technology but an integral component of the same great wave of the information technology revolution. All four are in constant collaboration ( not competition) with each other. And the continual interaction among all these domains is rapidly creating today's and tomorrow's global cybermarket, or marketspace. Whether their products are books, cars, PCs, financial services, health care, or travel, industries across the board have been forced to rapidly reinvent themselves to be able to survive and thrive in this brave new environment. Long-established and well-established value chains are being suddenly thrown into chaos and flux. Companies will need to compete and adapt, or wither away. The wealth of information being managed by today's information technology--whether the network be inter-, intra-, proprietary-, or Net- and Web-based--now ranges from raw data and simple text to in-depth expertise and complex workflow systems. As a general rule, the most advanced enterprises are moving steadily upward and to the right within the framework shown in Table 1.1. THE MARKETSPACE To remain competitive in the cyberspace market--from now on, I'll call it the marketspace, as do some technologists--enterprises will need to maximize their organizational know-how. This will require a new culture of information discovery, distribution , and application . Establishing a culture of effective knowledge management (KM)--(see 3C on Table 1)--goes to the heart of such issues as individual and management incentives, merit recognition and rewards, and job definition and description. Knowledge management requires an entirely new level of workgroup and even company-wide cohesion. Collaboration, or rather collaborative technology, is the fundamental DNA, if you will, of knowledge management. Messaging is still the killer application of collaboration, so it's fair to say that knowledge management is messaging-centric. Nonetheless, knowledge management is about broader technology-enabled capabilities centered on three elements: creation, discovery, and distribution. Each of these elements is central to the successful implementation of knowledge management practice. Over the next decade, the historically internal focus of most information systems will shift toward more of an external --market- facing--emphasis. But the cultural changes that this trend will impose on organizations and cultures are likely be at least as profound, challenging business and government leadership at nearly every organizational level to keep up with the new environment. A growing need to work closely, cooperatively, and collaboratively with customers, suppliers, partners, and other allies will become the defining factor of enterprise innovation. Meeting this challenge will raise new challenges of trust, security, and openness, particularly when it comes to sharing intellectual capital and other forms of corporate know-how. The corporate restructuring of the last decade is likely to have been merely a first stage--an opening salvo--signaling far greater changes to come. The critical need to effectively integrate information technology with more streamlined information flows will reshape the boundaries in many industry sectors. Over the last decade, most companies focused on refining their specific value propositions, typically through restructuring or reengineering themselves into leaner, flatter, smarter organizations. But over the next decade, many of these strategies will need to be substantially updated. In the coming years, adaptability and flexibility are likely to replace restructuring as the core necessity in industry. In the past decade, developing a robust internal network became a mission-critical infrastructure issue for most organizations. Although enhancing such internal capabilities will still be an indispensable requirement, over the next decade the development of an overall national and global information infrastructure will become an even more important factor than internal information system upgrading--due to the demands of rapid industry convergence. When the most important new network usages are external to the organization, companies will be increasingly dependent upon the capabilities of a public infrastructure likely to vary greatly by country. Networks have powerful critical mass effects, in that the more people who use them, the more valuable they become. Thus, the value of any one company's technology investments is directly dependent upon those of the related information technology ecosystem they participate in externally. In other words, the broader use and ubiquity of the connections, the more powerful the benefits. Even as companies have been compelled to redefine themselves and their core activities in the context of digital networks, whether they be intranets (internal corporate networks) or extranets (networks that reach beyond the traditional boundaries of the organization) a broader message has by now become clear: What your company can do with technology is inseparable from what your customers, suppliers, and partners can do with technology . SOCIAL INTEGRATION Over the last decade, individual companies more or less controlled their own technological destinies--which for all practical purposes meant that each could define its own strategy. But over the next ten years, as Web usage becomes ever more pervasive, companies will need to adapt their technology strategies to external, national, regional, and even global social norms. Transaction processing, taxation, privacy, security, and cross-border concerns will be only a few of the areas that will require clear and cohesive social and government support. All these issues have one great theme in common: interdependency. Consider the following: * Implementing market-facing systems requires a seamless merger of business and IT leadership. * Knowledge management will demand that an organization reward and incentivize formalized sharing, and perhaps even penalize information hoarding. * Organizational collaboration will see to it that no company will stand truly alone. * Industrial convergence will create conditions where key capabilities for meeting the needs of one's clients and customers may lie outside a current industry's core capabilities. * Public infrastructure requirements will mean that any one company's market-facing capacity may be only as good as the means that society provides for its competitors. * Critical mass means that what you can do is dependent upon what everyone else can do. * Social integration means that conducting business electronically will require new laws, customs, and procedures that no one company could ever hope to establish on its own. In sum, if the previous era was primarily defined by individual company competencies and value creation, tomorrow's era will be defined by tapping into codependent cycles of improvement and evolution. So now the great question facing all of us is: What do these momentous changes in business priorities mean for tomorrow's global business competition? THE GLOBAL PICTURE Contrary to utopian claims heard in the media, as well as on the Internet, neither the Web nor the Net are likely to change the world overnight. Among many features of modern life not likely to be radically altered any time soon are the integrity of national borders and the pervasive power and influence of sovereign states. Every day, up-and-coming universal technologies are touted as bringing about a "borderless" world. Even a truly and fully integrated global marketplace, however, will be forced to accommodate a rich diversity of national and regional laws and customs. Personally, I don't consider this a terrible prospect. The Internet is, after all, only the latest link in a long chain of critical technology innovations--from the Industrial Revolution to the discovery of electricity to the more recent inventions of the automobile, the telephone, and television--that have exerted tremendous global impact without altering the fundamental divisions among nations and cultures. The nearly universal desire to maintain a diversity of commercial, governmental, and cultural institutions is, I'm convinced, not likely to evaporate, nor will these age-old distinctions be eroded any time soon. In many key areas--security, encryption, taxation, censorship, ownership, and regulation are a few examples--the need for effective cooperation among local, state, national, and international governments will provide a critical challenge to the new and rapidly evolving breed of global, market-facing enterprises. Given the vast differences in expectations between the full-speed-ahead information technology industry and the more cautious, bureaucratic public sector, significant conflicts are not only likely but even desirable. In the ongoing give-and-take between public and private sectors and between regions and nation states, the much vaunted "localization" of the global marketplace is likely to occur. From my point of view, that localization will be a net plus for the planet. More worrisome than any financial and/or political conflicts that may lie ahead are the deep divisions and schisms within the information technology industry itself. The technologies involved are so powerful and so pervasive, and the competitive stakes so unimaginably high, that IT vendors undoubtedly feel compelled to position themselves to maximize profits as best they can from the growing importance of their products and services. Looking back, we were fortunate to have inherited today's universal Internet standards and protocols from government and university initiatives not concerned with generating profits. In contrast, even though IT industry efforts--UNIX is one example--often operated under the banner of open standards, they often resulted in frustratingly incompatible systems and disharmony all across the communications spectrum. As an industry, our current challenge in the near term will be to combine the competitive drive and high levels of innovation in the IT industry with the Net's culture of open standards and "interoperability," that is, with the capacity for separate information systems and networks to seamlessly communicate with each other, regardless of proprietary nodes of protected knowledge. Given the "type A" personalities that drive our industry, myself included, this combination of competitiveness, innovation, and openness is not a given. As with any period of major social, cultural, and technological change, significant shifts in competitive leadership are likely to occur over the next few years, even months. Just look back at what has happened in financial services, retailing, transportation, telecommunications, and most other major sectors over the past fifteen years! Is there any doubt that the next decade will be even more turbulent? Future business leaders will undoubtedly use computers to create new businesses, transform existing ones, and restructure many of today's long-established industry practices. Just as the computer, telecommunications, and consumer electronic industries are rapidly converging (due to their shared digital foundation), so will a common cyberspace create new overlaps among the major non-IT sectors, including manufacturing and distribution, banking and financial services, wholesale and retail sales, publishing and media, entertainment, insurance, and health care. As we enter this third, Web-enabled wave of IT innovation, "the virtual office wave," the list of new challenges to business is so long that it's possible to overlook the important role that nations and governments will play in the coming transformation. The IT industry will be compelled to accommodate and anticipate as never before the needs and desires of government entities and other industries--in particular, the telecommunications industry--in the construction of the infrastructure for this wired and wireless world. Here are some key questions that lie ahead on the road to a true global marketplace: * Which countries will develop inexpensive, high-bandwidth systems? * Which nations will provide or enable nearly universal citizen access? * Which states will do the best job of updating existing bodies of law to accommodate new technological capabilities? * Which states will have the most capable, creative, and enthusiastic citizens and entrepreneurs? Over the next decade, the answers to these questions are likely to determine who will be the global leaders of tomorrow. Recent history has shown that technology leadership and global economic success are often inseparable, whether the players be nations or enterprises. Although it may take a decade or more (not that long, in my view) to fully resolve these questions, the Internet and the Web have already taught us the enormous benefits to be derived from early market leadership. Copyright © 1998 Lotus Development Corporation. All rights reserved.

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