3.2.1 The World-wide
is currently the most important driving force behind the transition
from IT to ICT. Started in the scientific world as a network for e-mail
and file transfer the Internet is now becoming the public network for
everyone. In recent years we see a spectacular growth of the use and
the contents of the Internet. Companies are exploring the business opportunities
of the Internet. The Internet owes its popularity to the World Wide
Web. WWW is an interconnected collection of information pages, which
are placed by organisations and individuals onto server computers. Everyone
with a PC and access to the Internet is able to read these pages and
follow the links between them.
is still more used as a global area network (GAN) that connects wide
area networks (WAN) and local area networks (LAN) of companies with
the home computers of individual people.
is an impulse for the use of multimedia on the PC. Multimedia is the
technology that supports types of information like still images (pictures,
drawings), moving images (animation, film or television) and sound.
As a result, people are using their PCs more and more for the same purposes
as the present day consumer electronics, such as television, radio and
CD player. Manufacturers of televisions are developing Web-TV for easy
access to the Internet. The future will be home area networks (HAN)
that integrate IT, communications and consumer electronics. A home area
network has satellites in various rooms, serving for work or entertainment.
There are rooms where people can experience virtual reality films or
listen to musical renditions. The network handles the energy supply
and the climate control of the house and assists in doing the financial
of microprocessors combined with the development of cellular networks
for mobile communication will lead to the implantation of communicating
microprocessors in all kinds of equipment. The mobile telephone gets
already new functionality such as a positioning system, connection with
an electronic agenda etc. A communicating smart card will replace the
credit card. Cars will be equipped with processors that communicate
with the driver, control equipment in the road and the global positioning
system (GPS). Eventually palmtops and mobile telephones will be replaced
by Body Computers (BC) in the form of watches, earrings or implanted
chips that act as a body area network (BAN).
of current developments is the emergence of a world-wide both wired
and wireless network with huge transmission capacity. This network will
emerge from an integration of all current forms of telecommunications.
Internet and its offspring;
telephone network and the cellular networks for mobile communication;
networks: radio, television, cable;
21st Century this network will act as a global area network
that connects computer networks of companies, the home systems of families,
the body computers of individual people and the microprocessors of all
types of equipment. ICT will have a pervasive and ubiquitous character
in our world.
Reality of Digital Information
important technology trend is the increase in realistic value of digital
information. This trend is related to the growing processing capacity
of computers and the development of better user interfaces. The terminals
of legacy systems and the first generations of PCs were equipped with
Character User Interfaces that allow for the presentation of alphanumeric
fields and simple text. The major part of the data currently stored
in business computer systems consists of these alphanumeric data, with
all the restrictions that go with it.
the Graphical User Interface has become very popular, especially now
that most PCs are equipped with Microsoft Windows. With the Graphical
User Interface, the user obtains the on-screen presentation of formatted
text, drawings and images. The last generation of PCs with Pentium processor
allows for the use of multimedia. Users extend their PCs with interfaces
for the delivery of stereo sound and video. They also use the PC for
telephone or videophone connection through the Internet.
multimedia documents like an encyclopaedia on CD-ROM contain all forms
of electronic data such as text, images and sound. Multimedia documents
therefore offer far more possibilities than books, since they not only
contain text and drawings but also an interconnected combination of
sound, images and video. This matches human vision and hearing in a
much better way, which makes multimedia documents highly suitable for
knowledge transfer. Multimedia is further supported by a shift from
documents to realistic objects. In computer games we use electronic
objects with instructions and data for the behaviour and representation
of dragons and knights. These objects interact during the game with
the player and with each other. Each object by itself knows how to behave:
how to act on other objects and how to react when acted upon.
value of digital information will be even further enhanced over time.
The information technology to facilitate this is called virtual reality.
Virtual reality focuses on user interfaces that support many human senses
in order to let the user experience, a certain situation as realistically
reality may contribute significantly to the success of learning processes.
People learn best through their own experience. By means of virtual
reality, people can gain experience by seemingly living through extreme
situations without physical danger. Flight simulators are a good example
of professional application of virtual reality.
reality, people are able to communicate long-distance while seemingly
having a personal, face to face conversation. Operators can monitor
and control processes from a distance as if they are actually present.
Real-life events can be represented true to life after they have happened,
or be simulated before they actually happen.
of virtual reality and physical reality is an augmented reality.
Just as the telescope and the radar augmented our senses in the past,
will virtual reality augment our view on both the structure and dynamics
of the physical reality in the future.
3.2.3 A Virtual
in combination with multimedia and virtual reality will create a new,
virtual world for its users parallel to the real world in which they
live physically. Internet users already experience this emerging virtual
creates a virtual world, in which the users communicate with other people
and organisations. In the virtual world there are no distances. Through
the network, users can reach other people and computers all over the
world and therefore have 'ears and eyes' everywhere and have their 'say'
everywhere in discussion groups. They can request all kinds of information.
They order their personalised CD's,
shirts or model trains
from virtual stores or shopping malls. They are home bankers who use
videophone to seek advice from bank employees. On the network people
can request the schedules of concert halls from all over the world.
Tickets to concerts in the neighbourhood can be ordered electronically.
In future concerts that are performed at the other end of the world
can be attended by means of a live broadcast or a live recording rendered
on the home system by their media supplier.
world on the Internet will change the hours for work and spare time.
As a result of the growth towards world-wide networks and partnerships,
organisations in the form of virtual companies emerge all over the world.
These organisations operate over the Internet 24 hours a day. The social
consequences of these changes are unpredictable.
especially concerns people who work with information and knowledge.
The production of information products is not restricted to a particular
location. This work can take place anywhere in the world, at a mobile
workstation, a home system or a company system. The resulting products
are delivered through the network.
of course always remain people who carry out their work at a set location
or along a fixed route. For instance people, who produce and transport
material products or provide services directed at the physical world,
such as maintenance, cleaning and repair work. But as a result of the
growing automation and mechanisation, working at permanent locations
and at fixed hours will relatively decrease, while the growth of information
and knowledge work will lead to an increasing freedom for people to
work at any time and at any place.
3.3 ICT enabled
in technology cause fundamental changes in how people work together.
In the 21st Century a new form of ICT enabled enterprise
will emerge. This section gives an overview of some of these changes.
3.3.1 The role of
ICT in Communication and Co-operation
nowadays how the first virtual enterprises emerge enabled by Internet
and Web technology. The technology supports the external and internal
communication of the virtual company in three ways:
Internet is used as public network for information and communication
to the public and especially to potential customers.
technology is used for an Extranet. This is a private network for
the business communication with customers and suppliers. An Extranet
is realised as a communication server within the company, which is
accessible through the Internet for authorised users. The communication
server offers the user access to information systems and employees
within the company.
technology is used for an Intranet. This is a private network for
the internal communication between the employees within the company.
The Intranet not only uses Internet and Web technology for the support
of communication but also incorporates groupware and workflow applications
for the support of co-operation, process control and knowledge exchange.
Web-enabled enterprises show that the transition from IT to ICT adds
a new dimension to the support that technology offers to the business.
The communication technology supports the internal and external communication
of the company. The combination with information technology extends
this to the support of the co-ordination and co-operation between employees,
customers, suppliers and partners.
co-ordination and co-operation in a company are especially important
between two participants, which communicate with each other in the role
of customer and supplier. This relation exists between the company and
a customer, between a supplier and the company, and also between two
employees working in successive steps in a supply chain.
co-ordination and co-operation occur at three levels:
customers need a product or service they usually orient themselves,
which suppliers are able deliver the product or service under what
conditions. Suppliers therefore offer customers information about
their products and services through different channels like advertising
in papers, commercials on television, information documents or a conversation
between (an employee of) the supplier and the customer.
ICT enables new channels for this orientation and promotion. The Internet
and other electronic channels like electronic kiosks are new ways
for the exchange of product information. Videophone via the Internet
will support remote sales conversations between customers and companies.
On the Internet a new type of companies emerges in the role of intermediate
between suppliers and customers. These intermediates collect the information
about a certain type of product of all suppliers and offer this to
the customer. The customer has now an overview of the products of
all suppliers. This makes it easy for the customer to compare the
orientation the customer chooses one or more potential suppliers for
the delivery of a product or service and asks for a quotation or offering.
The customer uses these offerings to decide which supplier may deliver
the product or service.
ICT also offers new ways for buying and selling. Internet, electronic
kiosks and call centres are currently the new sales channels. Call
centre and Internet will merge to one channel with videophone via
Internet. The supplier can offer his regular customers access through
an Extranet. The Extranet is used for special offers and services
to the regular customers.
supplier produces the product or service and delivers it to the customer.
The support of ICT will totally change the production process. An
Intranet with groupware and workflow applications supports the co-operation
of employees. Electronic message switching is used for the communication
between the automated processes of customers and suppliers. ICT will
help to organise a flexible computer-controlled delivery process.
This makes it easy to change the pattern of co-operation between employees.
The result is the end of the current conveyor-belt mass-production
system. ICT supports an agile organisation, which is able to deliver
the customer tailored products and services by simply planning and
executing the right process pattern for the production and delivery
of every individual product.
3.3.2 The Growth
of the Immaterial Economy
in information and communication technology will strongly influence
our economy. Most important is the development of a huge immaterial
information economy parallel to our current material industrial economy.
steam engine and the railway in the nineteenth century contributed to
the improvement and intensification of material industries, computer
and telecommunications will contribute to the expansion of immaterial
material world, production processes revolve around the processing of
raw materials into material products and around the production of food.
In the immaterial world, processes revolve around the processing of
information in the form of data. Data are the immaterial 'raw materials'
in the production process. Immaterial products are for example the contents
of a book, text in a document, sound on a compact disc, representation
of data on a monitor. An immaterial product is always a form of information
or knowledge for the user. Money lives in both worlds: a coin is material
and tangible and the money on a bank account is information and therefore
immaterial and intangible. This electronic money is only visible as
data on an account overview.
support people in the processing of digital data and the production
of information in the form of electronic documents. We 'mechanise' the
production of information. This implies an enormous expansion of our
capacity to produce all kinds of knowledge and information.
of the information industry already happened at the beginning of this
century. Radio, television, film and the record industry have grown
as a result of the production of immaterial products. When we buy a
compact disc, we do not primarily pay for a piece of plastic, but for
its immaterial contents: a set of bits arranged in a specific way. We
actually pay for the piece of music we hear when a CD player converts
the bits into sound.
of information technologies such as multimedia and virtual reality will
considerably increase the possibilities we have to depict imaginary
and experienced realities and to create new and different information
products. The price consumers are currently willing to pay for immaterial
products like audio-CD, videotapes and computer games on CD-ROM demonstrate
that a new source of business has been found.
suppliers, the development of the Internet and of home systems opens
up new commercial opportunities. Within some years the Internet will
have a transmission capacity, which allows them to offer the contents
of newspapers, magazines, books, reference manuals, compact discs and
radio and television broadcasting in digital form direct via the Internet.
Instead of buying a CD, the customer selects a Brahms symphony from
the electronic catalogue at home, and orders it from a media supplier
in the network. The supplier sees to it that the symphony is sent to
the home system of the customer in digital form via the network. The
home system renders the symphony from the speakers in the living room.
Video on Demand is a first step in this development. Customers do not
have to passively watch and listen to what the media suppliers offer
them. The supplier provides the products as interactive 'documents'.
The users are free to decide in which order they will play the document,
to temporarily stop using it or to repeat certain parts. The customer
pays for this service. We assume that the customer will basically pay
for the use of the documents the eternal use, if necessary
not for the ownership of the documents. This means that the supplier
'broadcasts' the documents for direct rendition by the home system.
He does not 'send' an electronic copy, to be stored and used on the
home system. Television and radio broadcasting, as we know it
continuous broadcasting on air and on cable will eventually disappear.
Instead, media suppliers will broadcast on demand information, films
and music to the customer's home or mobile system.
products become truly immaterial in this way, for the material bearers
of data as we know them now, such as books that contain novels, CDs
that contain pieces of music or videotapes that contain films, will
disappear for the major part. Suppliers of news, information, novels,
articles, music, films and educational material will in future represent
these immaterial products on their customers' home systems via the Internet.
Exchange and Creation
and material worlds show a significant relationship. Almost everything
that people create in the material world, they have first designed in
the immaterial world. With the computer, people are better able to design
material products like cars and aircraft and also to design, control
and monitor the processes to produce these products.
technology enforces this development by supporting the knowledge exchange
between people. In our opinion knowledge is best defined as "knowing
how to act". For instance knowing how to make a product, how
to deliver a service or how to communicate with people.
can exchange knowledge in different ways:
face-to-face communication in teams or in workshops.
information in documents. The reader must read this information and
internalise it to his/her knowledge. It actually becomes knowledge
when the reader applies it successfully in practice.
material products. There is a lot of knowledge creation during the
development of a material product. This knowledge is hidden in the
product. Car manufacturers test their own (and other manufacturers
products) to get information and knowledge about the functioning and
construction of the product.
al these forms of knowledge exchange:
technology and virtual reality will support the remote communication
between people with a quality near to face-to-face communication.
This supports remote communication in the form of virtual workshops,
virtual classroom or distant learning.
technology supports new forms of electronic documents. Multimedia
and virtual reality are useful technologies in support of knowledge
exchange and learning processes.
strongly enhance the amount of knowledge in the products (both material
and immaterial) and in the services of companies. Material products
like cars are currently designed and simulated with aid of the computer.
A prototype of the car is tested and all test information is assembled
and processed by a computer. Developers transform the information
into new knowledge, which result in improvements of the car design
and the resulting car construction.
a longer existing trend. Better education and more complex products
and services have already made knowledge an important economic resource.
Supported by ICT knowledge will become the most important economic resource
in the 21st Century.
3.3.4 The Web Enterprise
enable new forms of organisation. The ICT enabled corporation should
be structured around supply chain and not follow the traditional functional
hierarchy. A supply chain is an end-to-end set of activities,
which collectively create a product or service for a customer. Current
information systems usually do not support a whole supply chain but
individual steps in the process. The applications are vertical "stovepipes"
supporting a specific business function. ICT systems are horizontal
networks. ICT systems are able to support communication between the
employees along the supply chain and the control of the combined production
process and support in this way the co-ordination and co-operation in
the whole supply chain.
chain may link several companies that produce and deliver a product
or service together. This is what we call a virtual company.
People, competencies, facilities and capabilities, which are part of
different companies, are linked together as though they were one enterprise.
ICT is a perfect enabler of virtual companies. ICT helps to assemble
and manage resources from different companies so that they behave like
resources from a single company.
example of an ICT enabled virtual company is the Italian firm of Benetton.
In 1985 this firm introduced a computer network with which it co-ordinates
and manages the business processes of different independent companies.
The firm has a network of shops all over the world and a lot of small
ateliers supply the clothing. The shopkeepers and the owners of the
ateliers are independent entrepreneurs. The Benetton head office in
Italy co-ordinates the entire organisation. They use a computer network
for the world-wide communication and information exchange. This way,
Benetton is able to closely follow the sales figures across the entire
world. On the basis of sales prognoses and the wishes of customers and
shop owners, the firm has the desired types of clothing made in the
desired colours. The delivery time of these clothes is very short. The
entire Benetton organisation is geared for the flexible production of
small series of exclusive clothes, for which there is an evident current
demand among the customers.
car and aircraft industry we see other examples of virtual companies.
Boeing for example uses electronic co-operation in the design and building
of a new aircraft. In co-operation with its suppliers, Boeing completely
designs the aircraft by means of the computer. As a result of the co-operation,
the engineers already make sure that all the components of the aircraft
fit during the design phase. This gives them the certainty that the
aircraft can actually be built. Customers of Boeing are also involved
in the design process. A number of airline companies are co-operating
to see whether the aircraft offers the right comfort to the passengers
and whether it is easy enough to operate and maintain.
fundamentally change the way in which people work together. Our current
organisational view is determined by the Industrial Revolution. It is
focused on division of labour. Divide and simplify the work and let
the workers do not think. There is one best way to do the work. The
management style is hierarchical. The management gives orders and workers
have little effect on quality. The organisation is aimed at lowest cost
per worker and standardised work.
is a static enterprise. The industrial company tends to focus on mass-production
of uniform products at the lowest cost. Not only the manufacturing industry
but also the financial industry has flourished by this industrial approach
of the organisation.
first ICT enabled virtual companies in the manufacturing industry show
still the industrial style. They use ICT for supply chain integration,
that is the streamlining and improvement of the common production and
transport processes within the supply chain. Results are shorter production
time and lower stock levels.
can use ICT for other reasons. Benetton uses ICT enabling for mass-customisation:
the massive production of clothes tailored to the wishes of the customers.
ICT helps Boeing to master the growing complexity of aircraft
design. The growing complexity of a lot of products and services makes
it still more difficult for one company to realise a new product or
service. Companies have to bundle their competencies in a virtual company
in order to design and produce complex products and services. In such
a virtual company a number of companies will specialise in producing
components, while other companies will focus on combining these components
into products customised to the wishes of the customer. The result is
both mass-customisation and more complex products.
companies make the business world as a whole much more flexible and
provide it with a greater adaptability. The collaboration between the
participants, the patterns of the production process and the resulting
products are better tailored to the specific demands of customers.
will be that the current large monolithic enterprises gradually transform
to Web Enterprises. The Web Enterprise no longer consists of
one or more supply chains but offers a supply web in the form
of an ICT enabled association of companies and individuals, which is
organised to quickly assemble and disassemble virtual supply chains.
Web Enterprise links people, competencies, facilities and capabilities
of different companies or individual workers, together as though they
are one enterprise.
Web Enterprise shows shifting patterns of affiliations, dynamic assembly
of core competencies and the resulting virtual supply chains can take
Web Enterprise quickly adapts to changes both internally and externally
by changing the patterns of co-operation within the enterprise.
and knowledge creating
is the primary resource in the Web Enterprise. Information and knowledge
exchange supports the learning processes of the employees. The enterprise
stimulates the employees to create new knowledge for improvement of
products, services, production and delivery.
view of the Web Enterprise is: empower the workers, enrich their work,
let them make maximum use of their intelligence and let all workers
contribute to enterprise learning and creativity. The new management
style is participative. The organisation consists of teams managing
themselves by constant communication. Quality is everyone's job. The
organisation is aimed at the highest value added per worker and constant
evolution of the product and the processes. The result is a learning
and self-renewing enterprise.
Enterprise tends to focus on agile production of tailored products with
the highest value added. The maximum agility: every individual product
has its own virtual supply chain!
in the early stages of an historic transition:
mass-production to agile production;
single-company operations to Web Enterprises;
the industrial age with capital, raw materials, land and labour as
the primary economic resources to the information age with information
and knowledge as the primary economic resources;
an industrial organisation in the form of a supply chain acting as
a static mechanism to a knowledge-driven organisation in the
form of supply web behaving as a living ecosystem.
result is a new type of corporation: a virtual, agile, adaptive,
learning, knowledge creating Web Enterprise, where corporate wealth
grows because all employees work smarter.