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The 2nd Digital Revolution Stephen J. Andriole Villanova University, USA CYBERTECH PUBLISHING Hershey • London • Melbourne • Singapore Acquisitions Editor: Mehdi Khosrow-Pour Senior Managing Editor: Jan Travers Managing Editor: Amanda Appicello Development Editor: Michele Rossi Copy Editor: Bernard Kieklak Typesetter: Cindy Consonery Cover Design: Lisa Tosheff Printed at: Yurchak Printing Inc. Published in the United States of America by CyberTech Publishing (an imprint of Idea Group Inc.) 701 E. Chocolate Avenue Hershey PA 17033 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: [email protected] Web site: http://www.cybertech-pub.com and in the United Kingdom by CyberTech Publishing (an imprint of Idea Group Inc.) 3 Henrietta Street Covent Garden London WC2E 8LU Tel: 44 20 7240 0856 Fax: 44 20 7379 3313 Web site: http://www.eurospan.co.uk Copyright © 2005 by Idea Group Inc. All rights reserved. No part of this book may be repro- duced in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Library of Congress Cataloging-in-Publication Data Andriole, Stephen J. The 2nd digital revolution / by Stephen J. Andriole. p. cm. Includes bibliographical references and index. Summary: "This book tells readers how technologies and business models are converging, and looks at technology and business holistically, arguing that it's no longer possible to think about business or technology without simultaneously thinking about the other"--Provided by publisher. ISBN 1-59140-801-6 (hc) -- ISBN 1-59140-598-X (sc) -- ISBN 1-59140-599-8 (ebook) 1. Technological innovations--Management. 2. Business enterprises--Technological innovations. 3. Business planning. I. Title: Second digital revolution. II. Title. HD45.A644 2005 338'.064--dc22 2004028470 British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher. The 2nd Digital Revolution Table of Contents Preface ................................................................................ vi Chapter I. Who’s Here? .................................................... 1 Big Guns............................................................................ 3 Bean Counters................................................................... 5 Techies ............................................................................... 6 Hype-Sters ......................................................................... 7 Protection .......................................................................... 8 Consigliore ........................................................................ 8 Other Chiefs .................................................................... 10 Worker Bees..................................................................... 11 Constituents ..................................................................... 11 Herding Cats? ................................................................. 13 Chapter II. The Convergence Conversation – We’re Finally Ready ........................................................ 15 What Happened?............................................................. 16 Business Technology Convergence ................................ 28 Early Takeaways ............................................................. 42 Convergence Excellence ................................................. 43 Does This Make Any Sense? .......................................... 44 Chapter III. The Business Conversation – Where We’re Going...................................................................... 53 So What Do You Think? ................................................. 54 Inside/Outside Collaboration ......................................... 58 Supply Chain Planning And Management .................... 60 Customization And Personalization .............................. 64 Real-Time Analytics And Optimization ......................... 68 Automation ...................................................................... 70 Trust ................................................................................. 74 Business Convergence Scenarios ................................... 75 So What Does Everyone Think? .................................... 79 Chapter IV. The Technology Conversation – How The World Should Work ....................................... 84 What Do You Know? ...................................................... 85 Applications Integration And Interoperability .............. 88 Data Integration ............................................................. 98 Pervasive Communications .......................................... 103 Adaptive Infrastructures ............................................... 111 Security And Privacy .................................................... 116 Business Technology Convergence .............................. 121 Opinions? ...................................................................... 122 Chapter V. The Turf Conversation – Who Does What To Whom .......................................... 125 Watch Your Flanks ........................................................ 126 You Report To Who? ..................................................... 127 Organize – Because We Have To ................................ 128 The Special Case Of Innovation.................................. 137 Business Technology Organizational Convergence .... 141 Who Wants To Go First? .............................................. 142 Chapter VI. The Management Conversation – It Still Needs To Make Sense ........................................ 143 You Still Think So? ....................................................... 144 How Much Do You Know?........................................... 144 Variation’s Your Enemy ................................................ 152 Can We Really Do This? .............................................. 158 Who Gets The Check? .................................................. 167 Many Happy – And Miserable – Returns ................... 178 The Business Of Business Technology Cases ............. 180 Governance ................................................................... 188 Business Technology Management Convergence ........ 214 Anyone Want To Talk About All This?......................... 214 Chapter VII. The Tough Conversation – It’s Still (And Always) About People ........................... 217 Who Are These People? ............................................... 218 How’s The Team – Really? .......................................... 221 Stay Sharp ..................................................................... 229 They’re Alive, They’re Alive! ....................................... 232 Keepers .......................................................................... 235 Business Technology People Convergence.................. 238 Why Is Everyone So Quiet? ......................................... 247 Chapter VIII. There’s Just One More Thing ... .......... 250 How’d You Do? .............................................................. 251 What’s Not To Like About This Outcome .................... 252 About the Author ........................................................... 254 Index ................................................................................ 258 vi Preface In the 1990s I sat in the office of a CFO of what was then a Fortune 100 company. He was not happy about the annual technology bill. Back then – and for decades before – technology was tactical. He said something about technology being his last unmanaged expense. I gave him a list of 10 things we should do to improve the cost-effectiveness of our technology investments. He told me to come back when there were only three things on the list. There was no appetite for long discussions about what was wrong – or right – with technology, and there was an expectation that technology expenses could be reduced by focusing on the top three problems. The conversation was anything but strategic. It was about technology as real estate, or technology as furniture, something we had to have, a necessary evil, a cost incurred to support the transactions that made us money. The business itself was never discussed. It was almost as if technology existed indepen- dently of business models and processes. Is this episode representative of the tension that still exists between “business” and “technology” in many companies, and the lack of synergism between busi- ness and technology initiatives? Unfortunately, yes. But in order to be as fair as possible, let’s place such episodes in the context of the evolution of busi- ness technology. The 1970s, 80s and early 90s all constitute the 1st digital revolution, when enterprise computing and communications technologies were deployed within countless small, medium and large corporations. But since the mid-1990s, the capabilities and purpose of technology have evolved from the back office to the front office, from keeping the books to touching cus- tomers. The transition from “tactics” or “operations” to “strategy” marks the beginning of the 2nd digital revolution. vii The early e-business initiatives – the Web sites we all had to have in the mid- to late-1990s – were the result of creative thinking about how to reach cus- tomers through the connectivity enabled by the Internet. These