Digital Thoughts of the Chief Executive

1. Introduction

This is a book for General Managers. It will give you a philosophy for dealing effectively with computers and all the baggage that goes with them. A philosophy and a strategy for ensuring that your computers will work to improve the return on the money invested in your organisation.

It will also ensure that you have a strategy for leading your staff into an increasingly complex "computer age" rather than have them wandering up expensive side tracks.

You can use computers for greater efficiency and to reduce costs. They can give you a competitive advantage and be a delight to your customers OR they can be an expensive disaster.

Major organisations are still making basic mistakes that others made many times before. One example of this is the New Zealand National Library. The senior executives in the early 90 s decided to work with the Australian National Library and build a new suite of software to fit with their unusual requirements. This was a big project scheduled to take some years to complete. To make things even more difficult they had the problem of designing requirements for two organisations in two countries at the same time. The library had spent $9,000,000 when the government became concerned enough with the lack of progress to cancel the contract. The newspapers of course made this very embarrassing for all concerned.

The news on this morning s radio is of our new police computer that is running well behind schedule and about $20m over budget. The new software will not be ready before the start of the year 2000 so there is now the extra expense of upgrading the old software to be Y2K compliant. If they can do it in time.

Similar scenarios have happened many times in the past and they will happen again. This book will help you avoid these and other major pitfalls. But more than that, we develop a philosophy and strategy for harnessing the power of computers that will enhance and develop your business as well as make it run more efficiently. Failure with computers is a management failure. The computer just does what people tell it to do.

Computers fly aeroplanes, win at chess against grandmasters and are part of our everyday life. Computers allow doctors to perform surgery by remote control. Computers made space-travel possible. Computers are now embedded into every facet of our life.

In the middle of all this wonder and cleverness the question is; "How do we use this potential to increase the shareholder value in our business?" The philosophy developed in this book will show you how to keep your staff concentrating on your main strategies and ensure that you have less risk and more profit.

The basic principles of managing computer installations have been the same over the last 30 years and they will be the same over the next 30 years. The technology is not the problem. We have always been working with the "bleeding edge" of technology. That is where the work is. When we know what to do we can have successful installations without any fuss. If we don t understand the principles involved then we are in grave danger of producing a very visible catastrophe. This book should bring a smile to your face as you recall the situations you have seen in previous organisations and hopefully you will avoid the pitfalls that have befallen your predecessors.

The first seven chapters will provide you with the basic philosophies and strategies necessary to understand the place of Information Technology in the modern organisation. Read the chapters after that in any sequence and use them for reference when problems arise. They will provide you with "common sense" answers to the problems you will meet when dealing with the Information Technology industry.

As we advance into the information age our organisations will become increasingly dependent on computers. Our computer strategy will determine success or failure. Our computers will assist our customers to deal with us. Rather than be a barrier they will form an essential part of the organisation and in some cases will be the determining factor that ensures success in the market place.

Dell, which makes and sells PCs, has a business model that provides direct computer input from customers into the manufacturing cycle. They also provide direct computer attachment to their suppliers at the back end to ensure that these suppliers have the most up to date information for providing the Just In Time service demanded. This very short "supply to manufacture to sell" chain has enabled Dell to become such a success in one of the most competitive industries in the world that they are crippling their opposition. Compaq and IBM have a major problem in trying to compete with this new model of the PC Supplier company. If they cannot compete they will have to get out of the business. Could this happen to you?

It is not just a matter of putting something on the web. Dell s competitors are doing that. Each company will need to redefine their business model to become unique and defeat the competition by that very uniqueness.