No. 3: March 1995
The Information Superhighway - Are You Ready for the Ride?
Systems for Planning and Thinking
1994 was the year when the "Information Superhighway" and the Internet (today's most practical example of such a global highway in practice) attracted a lot of media "hype", and by all accounts a lot of activity as well. For example:
- The number of UK connections to the Internet are reckoned to have doubled to nearly a quarter of a million
- BT started trials of multimedia home services such as entertainment and home shopping
- Several high profile conferences were held, and new magazines specifically devoted to the Internet are on sale at newsagents
- "Internet in a box" products, that simplify Internet access, were popular
- New software "navigation" and "search" tools, that provide rapid access to global information resources, were released
A good example of the latter is a product called Netscape, which was released over the network last Autumn and in the space of weeks was in use at thousands of sites all over the world. This way of delivering software is likely to gradually replace distribution in usual "shrink wrapped" format.
Not Just for Computer Buffs
Although such developments are often viewed as the provenance of "computer buffs", evolution of the Internet has now reached a stage that is attracting the attention of people in many fields. For example, my local supplier notes that medical professionals are signing up, purely because of value of the drug information on the network.
Already the business benefits are rapidly becoming appreciated by many organisations for a wide range of applications:
- Promotion - opportunities are being created by companies like EuroDollar and Sony, to reach and inform potential customers
- Technical support and customer service - distributors like FrontLine and electrical giants like GE are enhancing their service to customers
- Training - resources on subjects from agriculture to zoology
- Distribution - the entertainment industry is distributing "samples" of music and video
- Publishing - existing and new newsletters, magazines and books (even the Daily Telegraph and the Economist are in on the act)
- Investigative and research - consulting firm Gemini estimates that it now sources 15 per cent of information needed for client work from the Internet compared to only 1 per cent 18 months ago.
In short, the rapid uptake by commercial users (a new one joins the network every five minutes) is on the threshold of transforming the way that companies in all fields conduct their business. How ready are organisations for this dramatic change?
As in other areas of innovation, some companies will reap rich rewards while others will lose millions. Many challenges lie ahead, for both suppliers of services and users. The suppliers are already addressing commonly perceived problems - those of the availability and reliability of the network infrastructure, security, and methods of payment. For them, a key challenge is to "read the market" correctly, package their services appropriately, and above all to have a keen sense of timing. At least one commercial service provider has had to do a fundamental rethink of their strategy.
For users, the challenges are more diverse. They need to assess how to use the net to achieve business objectives of reduced costs, improved products and services, and enhanced customer satisfaction.
They need to learn how to exploit the unique capabilities on offer, to create new business opportunities. They need to avoid the dangers, already pointed out in one survey, of jumping on the "bandwagon" and ignoring many of their existing good practices, such as security procedures.
They also need to balance the hidden costs of their employees spending valuable time "surfing the net" against the personal learning and business development benefits that might emerge.
Succeeding with these challenges requires a clear strategy that addresses business fundamentals.
A Model for Users
The superhighway world is full of jargon for the uninitiated - telnet, ftp, Gopher, Archie, Veronica, WWW, VOD etc. However, users must look beyond the technology jargon to consider the essential functions of the Internet. We offer a model that takes three generic functions - Communications, Information, Knowledge - and their relationships with the wider environment .
Each should be considered in terms of how the Internet can improve their effectiveness in support of key business processes such as new product development, manufacturing, sales and marketing, customer support etc. For example:
Communications - the Internet can increase market reach (it costs no more to send documents to the other side of the world than somewhere local), elicit faster feedback from customers and improve co-ordination across globally dispersed teams. Schlumberger is an example of a company that has found the Internet invaluable in bringing its far flung specialists closer together.
Information - there are terabytes (billions of billions) of information, but it takes skill (and luck) to find that which is useful. Researchers and engineers at IBM access vital information on technology developments.
Knowledge - open electronic networking, in which computers augment human-to-human interaction can improve the development of knowledge within individuals, teams, organisations and collaborative ventures. Innovative companies such as Apple interact with key thinkers at universities to generate new ideas, test proposals and refine products. Planners at Shell access remote experts when developing environmental scenarios.
An Agenda for Action
Our analysis and client work shows that getting to grips with the Internet is more than simply a case of "getting connected" - although that, of course, is an essential prerequisite! We suggest that our framework (of which this article give only a brief overview) is used as a starting point for identifying both "quick win" and long-term strategic advantage. For example, you might consider the following:
- How open and accessible are you to the outside world - your customers, partners, suppliers?
- What measures do you have of your "connectivity"?
- Have you performed an 'information audit'?
- Do you have information resources that could go on the Internet and gain business?
- How effective are your knowledge and management processes at creating market innovation?
These are just some of the questions that will help you think in a strategic way about exploiting the Internet.
"In five years time there will be those on the Internet, and those out of business"
Update (August 1999) - Internet developments continue apace. See related Insight on Internet Commerce.
As more companies seek to increase their competitiveness through innovation, they are turning increasingly to new ways of harnessing the knowledge and creativity of their people to create 'world class' products and services.With our experience of introducing computer aided decision and planning systems we are pleased to announce our association with two systems that have achieved world-class status.
Strategies for Innovation: SFI
This is a system from Team Technology International that has helped many leading companies bring innovative products and services to market. As part of their Enterprise Support Systems portfolio it offers:
- A structured approach to developing product plans
- A focus on introducing innovative functionality into products and services
- A 'knowledge base' of experience to capture and share know-how
This highly successful system has been successfully introduced into leading companies in US, southern Africa and Israel. Customers in the UK include Rover, British Aerospace, Rolls Royce and Barclays Bank.
Update (August 1999) - David Skyrme Associates is no longer actively involved with SFI.
Simulation with PowerSim
Once you have turned ideas into practical plans, you need to verify them and test them for unanticipated side effects. This is where a powerful simulation tool like PowerSim comes into its own. It can help identify counter-intuitive consequences and minimise risks.
Our association with one of Powersim's UK agents, Phrontis Limited, brings to you the techniques of systems dynamics as featured in Peter Senge's 'The Fifth Discipline', neatly packaged into a PC Windows based application programme.
For further details on either of either of these offerings, please check these pages or email us.
© Copyright, 1995. David Skyrme Associates Limited and Authors - All rights reserved.
This newsletter is copyright material. In the interests of dissemination of
information, forward circulation is permitted provided it is distributed in
its entirety including these notices, that it is not posted to newsgroups
or distribution lists and that it is not done for commercial gain or part
of a commercial transaction. For other uses please contact the publisher.
I3 UPDATE is a publication of David Skyrme Associates Limited - providers of market studies, consultancy and strategic advice in knowledge
management, knowledge networking and collaborative technologies.