Vision

IT and the development of IT form a constant learning process for companies. IT suppliers are constantly offering new possibilities the companies can use. This section discusses the learning process involved.

For a long time, the development of IT in companies took place along two main tracks: the use of central computer systems and the use of personal computers.

Central computer systems
The central computer systems - from large mainframes to small mini systems - basically handle two different types of applications. Batch applications handle massive automated data processing. On-line applications support the user in the direct retrieval and editing of data at his workplace.

Personal computers
The personal computer is located at the workplace and functions as a tool for the personal tasks of the user, and also increasingly as a terminal for a central system.

Currently, the next phase is in full swing: the gradual integration of both types of systems into internal and external computer networks. The computer system of a company is becoming a network system consisting of workstations for employees and of server computers. These company network systems are connected with each other and with the home systems (PCs, at first) of private individuals through telecommunications.

Application of network systems
The application of network systems leads to a strong integration of IT applications in the business operations. The applications on a network system, offer far more possibilities than the conventional processing and editing of data or the support of personal tasks. Network systems form the infrastructure for applications that are specifically aimed at the collaboration of people and companies. Network systems in combination with the right applications form Collaborative Systems. They support the collaboration of people. For companies this opens up new possibilities for the application of IT. These are described in detail in Chapter 3. We will therefore only give a brief overview:

• Automated control of parts of the business processes. People retain the final responsibility in their roles of operator, supervisor or manager. The automated control allows for a flexible organisation of the production processes of products and services.
• The computer aided design of new and improved products and services.
• The support of team work. Team members can collaborate even when they are in different locations in the company. Their work is co-ordinated by means of IT. The team members may also be distributed among an interorganisation of companies.
• Strong integration of computer systems of companies and private individuals via telecommunications. This leads to intensification of data interchange between the participating companies and private individuals. This makes them better able to control and co-ordinate the common processes. This leads to a strong interorganisation of companies and private individuals.
• Adaptation of the management structure of the organisation or interorganisation by means of IT and communication facilities. This is the shift from a hierarchical to a network organisation. This leads to major transformations of the management and control method of the organisation.

 

The learning process for a new technology

The use of IT is going through the same kind of evolution as the use of any other new technology. There are six stages to this learning process: denial, exploration, replacement, integration, transformation and transparency. Examples of technologies that went through these stages are the telephone and the car. The development of network systems will also go through these stages.

Figure 2.3 Learning stages for the use of a new technology.

After a stage of denial and exploration, the company will seriously consider whether a technology will be of use. If the answer is positive, the replacement stage is entered. Existing parts of business processes are from now on executed by means of the new technology. This is usually intended to execute isolated business processes faster and more efficiently, without really changing them, though.

In the integration stage, the isolated applications of the technology are integrated into a coherent infrastructure. This not only reduces the costs of business operations, but it also makes them run smoother and more effectively. It is accepted at this stage that if nothing is ventured, nothing is gained. In this stage the business processes and the technology are changed separately, but not really in coherence. This limits the possibilities for application. It therefore remains to be seen what is eventually gained.

In the transformation stage, the business processes are completely different from what they were. The intention is often to increase the profitability. The new technology contributes to business processes running in a different form or on different locations, or even being partly cancelled. This transformation is often accompanied by an outward view. In the decisions for the transformation people consider the risks and the opportunities and take the competitive position of the company into account. The technology may lead to the creation of new products or services and to a different organisation of the network of relationships with customers and suppliers.

The growing interaction between the technology and the business processes also leads to the intensification of the interaction between people and the technology. The technology becomes increasingly user-friendly. PCs are a good example of this. Moreover, people start to understand better how they can use the technology in all kinds of applications. The people are starting to consider the technology as something normal. They do not need to understand the technology in order to be able to work with it. The use of the technology is transparent. People are no longer struggling with technology, they are simply working with it - just like they do with telephones and cars.

We recognise two important turning points that not every technology passes. The first is that of recognition, of proved applicability.Companies and private individuals are starting to apply the technology on a large scale. The second turning point is that of the truly noticeable influence. The technology is applied in such a way that this results in noticeable changes: changes in business operations, but also social changes.

The learning process for new IT
The use of IT also goes through an evolution. The road to adulthood with respect to handling IT is a learning process in itself. IT of course has also known developments that did not get past the stage of exploration. We can safely state that the conventional, central computer systems have passed the first turning point. They are increasingly passing the second one as well.

The role of IT in organisations will continue to change dramatically in the years to come because of the still continuing flood of technological innovations. Current developments are the transition to computer networks, multimedia, workflow management, document management systems, object-oriented technology and knowledge technology.

For all of these technologies, companies have to go through the learning process. Many companies are in the stage of familiarisation or have started with the first isolated applications of these new technologies.

Developmental stages in the application of network systems
We will place the IT learning process described above in the perspective of network systems. Companies go through four developmental stages that are related to the four final stages of the learning process in the following way:

1. Applying the separate technologies in specific business situations (island automation).
2. Integrating new and existing IT in a network system. This serves as an IT platform for the internal organisation or for external interorganisations.
3. Transforming the business processes by means of applications on this IT platform.
4. Transparency of the applications and the IT platform, both becoming a 'normal' and easy-to-handle resource for the people in the company.

 

Stage 1: island automation
In this first stage people gain experience with a certain form of new IT. After a familiarisation period, people start to apply the technology in specific business situations. This is called 'island automation', since the new applications are usually isolated from each other and from existing applications. The new technologies often also have their own IT infrastructure, for example consisting of separate computers that are not connected to each other or to the existing IT infrastructure. The automation in this stage is usually aimed at the improvement of efficiency, especially routine jobs. The automated application takes over that work, while the business processes usually hardly change. Current examples of this are a document management system to solve an archive problem, workflow management for a more efficient flow of several clerical processes, or a knowledge-based system for the assessment of insurance applications.

Stage 2: development of a network system and integral applications
Typical of this stage is the integration of new and existing infrastructure into one computer network, thus allowing for integration of the applications.
The integration stage is highly complex, since the new technologies have to be integrated with each other and with the existing IT into one network system. This requires that one general architecture is laid down, in which the applications and the infrastructure are aligned to each other. This results in an IT platform that can be easily extended with new applications and hardware. The effectiveness of the IT is thus enhanced, while a variety of computer systems and applications has to start functioning as an integrated whole. The various information systems now have to meet requirements with respect to connectivity and integratibility. This is often accompanied by further adaptation and conversion of existing hardware and software.
In this phase there still is a strong emphasis on the integration of the technology and the arrival at a common architecture for the IT platform, rather than on transforming the business processes by means of the applications. The IT and the business processes are still leading more or less separate lives.

Stage 3: transformation of business processes with collaborative applications
A major step forward is made when the company starts to thoroughly transform its business processes by means of IT. Numerous possibilities for business transformations are offered, especially by network systems with collaborative applications, specifically aimed at the collaboration between people in companies. This step becomes possible when the integration of IT has gone sufficiently far. The business processes are transformed as a whole on the basis of network systems, and they are aligned to each other, company-wide, and if possible up to and including the applications of suppliers and customers. Transformation is a means of strategic reinforcement of the company. In this stage, the network system becomes a collaborative system, that supports the collaboration between people in companies and interorganisations of companies. These collaborative applications have a wide scope, much wider than that of applications in the integration stage.

Stage 4: transparency of IT in business processes
With the growing interaction between technology and business processes, the interaction between people and IT also intensifies. IT more and more becomes a common phenomenon for people. In this stage, IT has become so accessible and applicable that it no longer poses any restrictions. People regard the availability of IT as something completely normal, and they do not have the idea that they have to adapt to the technology as they use it. IT has become transparent.

Each company has its own learning process
Each company goes through the learning process with IT in its own pace and way. Each company chooses its own forms of new IT, the way it will use them, the scope of the use and the degree of application. The company decides for itself which applications and which forms of IT are necessary for the drastic transformations. Companies that have a strong orientation towards technology are usually quick to explore and apply isolated technologies. They are driven by the technology push. These companies often face problems when they want to integrate all the different applications.

Companies with a strong orientation towards their results and profitability will be relatively slow with their first explorations and applications, but they will be quicker to embark on far-reaching integration and drastic transformations. In these companies, the business pull is the dominating factor.
Companies within the same sector are watching each other, also where the application of IT is concerned. Successes of innovators lead to imitation by the other companies in the sector.

In the first stages - learning to apply and integrating - the main focus is on IT, and business operations come in second. In the stage of transformation, the business operations become the main issue. Real transformation of business operations by means of IT can only occur if the integration has resulted in a sufficiently strong IT platform. This means that a company must at an early stage have an idea of which IT is important for that company, especially with respect to strategy. The company must focus on those forms of IT in the process of learning, using and integrating IT. This will gain the company time, because it will be able to set the stage of transformation of the business processes in motion sooner.
In the transformation stage, people consciously use the possibilities offered by the interaction between IT and business processes. One side departs from a business angle, in which the application of IT has been explicitly involved to arrive at a transformation of the business processes. The other side departs from an IT angle, in which the business processes were explicitly involved to arrive at optimal IT applications and corresponding infrastructure. Business operations and IT are connected in an optimal way in a coherent business and IT strategy. Strategy, mission and course of a company can therefore change thoroughly and permanently. This results in a highly company-specific situation in which strategic advantages can hardly, if at all, be copied by the competition. It will therefore be possible to retain a market share once conquered longer and with less effort.