An Imprint of PEARSON EDUCATION London • New York • San Francisco • Toronto • Sydney Tokyo • Singapore • Honk Kong • Cape Town • Madrid • Paris • Milan • Munich • Amsterdam Library of Congress Cataloging-in-Publication Data Cortada, James W 21st century business: managing and working in the new digital economy / James W Cortada p cm Includes bibliographical references and index ISBN 0-13-030569-3 Business—Data processing I Title: Twenty-first century business: managing and working in the new digital economy II Title HF5548.2.C6738 2000 650’0285—dc21 00-058707 Editorial/Production Supervision: Nick Radhuber Acquisitions Editor: Tim Moore Marketing Manager: Bryan Gambrel Manufacturing Manager: Maura Zaldivar Cover Design Director: Jerry Votta Cover Design: Anthony Gemmellaro Interior Design: Gail Cocker-Bogusz © 2001 Prentice Hall PTR Prentice-Hall, Inc Upper Saddle River, NJ 07458 Prentice Hall books are widely used by corporations and government agencies for training, marketing, and resale The publisher offers discounts on this book when ordered in bulk quantities For more information, contact: Corporate Sales Department, Phone: 800-382-3419; Fax: 201-236-7141; E-mail: corpsales@prenhall.com; or write: Prentice Hall PTR, Corp Sales Dept., One Lake Street, Upper Saddle River, NJ 07458 All rights reserved No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher Printed in the United States of America 10 ISBN 0-13-030569-3 Prentice-Hall International (UK) Limited, London Prentice-Hall of Australia Pty Limited, Sydney Prentice-Hall Canada Inc., Toronto Prentice-Hall Hispanoamericana, S.A., Mexico Prentice-Hall of India Private Limited, New Delhi Prentice-Hall of Japan, Inc., Tokyo Pearson Education Asia Pte Ltd Editora Prentice-Hall Brasil, Ltda., Rio de Janeiro In an increasingly competitive world, it is quality of thinking that gives an edge An idea that opens new doors, a technique that solves a problem, or an insight that simply helps make sense of it all We must work with leading authors in the fields of management and finance to bring cutting-edge thinking and best learning practice to a global market Under a range of leading imprints, including Financial Times Prentice Hall, we create world-class print publications and electronic products giving readers knowledge and understanding which can then be applied, whether studying or at work To find out more about our business and professional products, you can visit us at www.phptr.com To my children, Beth and Julia, who are entering a fascinating New World of work Contents Preface xi Introduction: What is the Information Age? xix CHAPTER A New World Born: It Is More Than Just Technology Foremost an Age of Information Economics The Search for a New Value Proposition 13 Globalization and Digitalization 23 Political Realities 38 Implications and Actions 44 Endnotes 47 CHAPTER Waves of Learning, Waves of Best Practices 51 Rise of the Competency-Based Enterprise 55 How Knowledge Management Is Transforming Commerce 65 Business in a Process-centric World 70 Understanding How Waves of Change Work vii viii 80 Implications and Actions 87 Endnotes 89 CHAPTER Who Are These Knowledge Workers? 95 Introducing Familiar Roles and New Functions 97 Where They Came From 100 How Are Knowledge Workers Leveraged Today? 103 Knowledge Management, Value Chains, and KStrategies 110 How Knowledge Management and e-Business Work Together 116 Implications and Actions 120 Endnotes 131 CHAPTER Changing Work: Role of the Internet 135 The Issue of the Net 137 What Makes the Internet Different 145 Issues, Assumptions, and Questions 148 A Sober View of the Future 159 Implications for Success 164 Endnotes 165 CHAPTER Digitizing Supply and Value Chains 169 Contents ix The Value of Viewing Everything as a Supply Chain 173 The Emerging New Value Chains 186 Special Role of Communications and Computers 194 Some Realities 201 Endnotes 202 CHAPTER Choosing a Future for Your Company 205 The Future of the Business Enterprise 207 Making Trends Work for the Firm 215 Nature of Management Practices 221 Cyber Manager or Knowledgeable Leader? 224 Nature of Measured Success 228 An Issue of Leadership and Management 234 Endnotes 237 APPENDIX A On Keeping Current: A Strategy and Some Useful Reading 239 Some Great Reading 241 Index 247 240 There are essentially three topics about which one always has to be current and, therefore, any reading, research, or reflection should focus on these issues First, the nature of management, leadership, and work is rapidly changing as new techniques and tools are constantly introduced Keeping up with these, even if you not choose to use them, is essential Second, general economic trends, changes in one’s industry and markets, and how your firm is perceived in the marketplace are equally dynamic and therefore require that you be a student of them, not merely a participant within them Third, identifying new ways of connecting ideas or patterns that result in increased value in what you offer the enterprise must come from outside-the-box thinking and knowledge Increasingly, all three issues require that you participate in your work, be a student of that work, and be curious about what others both in and outside your industry While seminars and internal corporate reading materials can be helpful, these are not enough You have to methodically acquire information on all three issues on a fairly regular basis The best way to this is to three things in various degrees each week, time permitting Over time they have a cumulative effect, creating an ever-changing view of management, work, industry, the economy, and ways to make a business or government agency successful If nothing else, the effort is a confidence builder; at a minimum the result is an understanding of the obvious and the basics of your work First, read books and magazines on these topics, rotating through all three one at a time but constantly Books on management are an excellent choice, while magazine articles are often more current on business and industry trends Second, read and watch television programs that deal with the general world around you I recommend focusing on economic and political history, science and technology themes, and on current events But always read or view these with a third person’s distance, asking yourself, “I wonder how this information might be applied to my work?” The key is to search for links between what you and what you are learning Also, bookmark sites on the Internet that have informa- Appendix A • On Keeping Current 241 tion of use to you About a half dozen well-chosen ones from outside your organization should the trick Third, expand your circle of friends, associates, and people you meet to include those in other industries and organizations Ask them constantly what they are doing, where their organizations are headed, what new initiatives they are taking, and why Connections begin to pop up all the time, but you have to be curious Some Great Reading Since much of the best thinking about management and work in the Information Age is best explained these days in books, what might be a good reading list? Everyone has their own favorites, these are mine that I have found thoughtful and relevant I not think it unreasonable to expect that eventually you would have read most of these if you are serious about deeply understanding the world you are working in today On the role of management, almost everyone begins with Peter F Drucker His latest book, Management Challenges for the 21st Century (New York: HarperBusiness, 1999), distills many of the key elements of management in contemporary terms and is a very quick read The number of great books available on leadership is staggering, but I want to suggest one written by a scientist of the mind, rather than by a business professor: Leading Minds: An Anatomy of Leadership (New York: HarperBusiness, 1995), by Howard Gardner, in which he describes what leaders who come from many walks of life Read one of his books and you will want to find others (he has published about 15) A central element of today’s work mantra is the voice of the customer, and on that topic there are also hundreds of books, many of them superficial However, two are essential, maybe even perfect For over two decades, a cultural anthropologist, Paco Underhill, has studied how people buy and sell, summarizing his fascinating discoveries in a short, well-written book: Why We Buy: The Science of Shopping, by Paco 242 Underhill (Simon & Schuster, 1999) Read it to know what you do, as well as what your clients, customers, and colleagues The second book discusses how to weave the voice of the customer into the internal operations of an organization, moving from “you should” to “here’s how,” without being a cookbook Harvey Thompson provides a sober, tested set of strategies for doing this in The Customer-Centered Enterprise (New York: McGraw-Hill, 2000) Those who have been serious students of service have long been fans of Leonard L Berry, the professor who has written so extensively on the subject For a strategy on service, the book to read is his On Great Service: A Framework for Action (New York: Free Press, 1995) The whole issue of how enterprises change is slowly becoming a sub-field of its own The subject is changing because how we transformed organizations in the early 1990s, for example, is very different from how that was being done at the start of the twenty-first century To understand how that process has changed and to what, there is a collective study of the subject written by a team of change experts, James W Cortada and Thomas S Hargraves (eds.), Into the Networked Age: How IBM and Other Firms Are Getting There Now (New York: Oxford University Press, 1999) A well-kept secret in the business literature is a book by James F Moore, The Death of Competition (New York: HarperBusiness, 1996), in which he sets forth the impact of integrated approaches to work and the marketplace, a fascinating book One of the most current, useful guides on managing organizations and change through process is The Horizontal Organization, by Frank Ostroff (New York: Oxford University Press, 1999) Finally, remember that innovation causes change, and the great classic on the subject, still relevant, and still a great read, is Richard N Foster’s Innovation: The Attacker’s Advantage (New York: Simon & Schuster, 1986) Knowing how it is all working led to many new ways to measure the performance of organizations, and resulted in over a dozen excellent book-length accounts of what to and why However, there are two that cover the subject well Rob- Appendix A • On Keeping Current 243 ert S Kaplan and David P Norton took their notion of the Balanced Scorecard and wrote a book explaining all its attributes and how to implement it in The Balanced Scorecard (Boston: Harvard Business School Press, 1996) For an effective overview of other measurements systems, there is nothing better than Measure Up! Yardsticks for Continuous Improvement, by Richard L Lynch and Kelvin F Cross (Oxford: Blackwell, 1991) Technology has become the subject of many excellent books that read well and are informative for people at all levels of an organization James M Utterback, in Mastering the Dynamics of Innovation (Boston: Harvard Business School Press, 1994), combines historical case studies and contemporary experiences to describe how to best leverage technologies in general, not just IT For the dark side of that story with lessons learned, see Clayton M Christensen’s well received book, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School, 1997) What should you read about information technology? Begin with Carl Shapiro and Hal R Varian, who, in Information Rules: A Strategic Guide to the Network Economy (Boston: Harvard Business School, 1999), show how fundamental business practices are applied in a networked era Then, read a book by Philip Evans and Thomas S Wurster, Blown to Bits: How the New Economics of Information Transforms Strategy (Boston: Harvard Business School Press, 2000) which, like the earlier book, discusses strategy Since IT has to provide continuous improvement in operations, there is my tactical description of how that is done, James W Cortada, Best Practices in Information Technology: How Corporations Get the Most Value from Exploiting Their Digital Investments (Upper Saddle River, N.J.: Prentice Hall PTR, 1998) The bible on knowledge management was written by Laurence Prusak Working Knowledge (Boston: Harvard Business School Press, 1997) provides a clear explanation of the rationale and use of KM For a more argumentative yet stimulating book on information technology and KM, there is Thomas H Davenport’s Information Ecology: Mastering the Information 244 and Knowledge Environment (New York: Oxford University Press, 1997) Davenport also worked with Prusak on Working Knowledge, and you may remember him as the author of a series of books and articles in the l990s on process management, in which he argued that processes should be made computer-friendly to optimize them, rather than the other way around (the thinking of the 1980s) A clear understanding of contemporary economic and political events is essential On economic realities, a good place to begin is with Richard K Lester, The Productive Edge: How U.S Industries Are Pointing the Way to a New Era of Economic Growth (New York: W.W Norton, 1998) The great political scientist, Samuel P Huntington, has argued that in the post-Cold War world, politics are aligning along cultural lines rather than between communists and the Free World, describing what this means for nations and businesses in The Clash of Civilizations and the Remaking of World Order (New York: Simon & Schuster, 1996) Since population changes are the tails wagging the dogs, there is a little book by Ester Boserup that discusses trends, Population and Technological Change: A Study of Long-Term Trends (Chicago: University of Chicago Press, 1981), but also see the more current study by W.W Rostow, The Great Population Spike and After: Reflections on the 21st Century (New York: Oxford University Press, 1998) Either one will teach you what needs to be understood Finally, a little book by two great historians of economics and technology is must reading, David C Mowery and Nathan Rosenberg, Paths of Innovation: Technological Change in 20th Century America (Cambridge, Mass: Cambridge University Press, 1998) There is an enormous amount of good business history available today Most large corporations have been looked at by journalists and historians, and many of the key business leaders of the United States and Western Europe, particularly Americans, have been the subject of biographies Almost every major industry has also been the subject of historical inquiry However, if you could read only a few books to be informed on how to work well in business today, here is my list Read David Appendix A • On Keeping Current 245 S Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York: W.W Norton, 1998); it may be the best history book you will have read in a long time, covering the entire sweep of human history and the effects of the environment and economy on nations Joel Mokyr has written on how technology affected economic prosperity in The Lever of Riches: Technological Creativity and Economic Progress (New York: Oxford University Press, 1990) While a very long book, and in some parts tough reading, David Hackett Fischer’s The Great Wave: Price Revolutions and the Rhythm of History (New York: Oxford University Press, 1996) is the ultimate word on historical economic waves and trends Many of his appendices are excellent short tutorials on waves and price patterns; at a minimum you should read some of those The classic work on the history of corporations and management remains the remarkable book by the father of business history, Alfred D Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: Harvard University Press, 1977) Once you have read a book by Chandler you will want to read others by him Curious about the Internet or about the history of computing? The hands down best history of the Internet is by Janet Abbate, Inventing the Internet (Cambridge, Mass.: MIT Press, 1999) You will learn that there is more to technology than technology; institutional politics and objectives are at least as important as physics and technologies in determining how telecommunications and computers evolved A classic account of the PC is by Paul Freiberger and Michael Swaine, Fire in the Valley: The Making of the Personal Computer (New York: McGraw-Hill, 2000, 2nd edition) For a book that combines sociology, business, and a little history about the Internet, see the very wise and readable Andrew L Shapiro, The Control Revolution (New York: Public Affairs, 1999) Finally, for a major history of the role of information in the United States, a book designed for both the general public and those in business, and written by historians, consultants and business professors, see Alfred D Chandler, Jr., and James W Cortada (eds.), A Nation Transformed by Information: How Informa- 246 tion Shaped the United States from Colonial Times to the Present (New York: Oxford University Press, 2000) In addition to the kinds of books listed above, another way to keep up is to subscribe to some of the many business yearbooks now being published, most of which are excellent They typically anthologize recently published material, often also include new items, lists of journals, associations, and other sources on the Internet They exist for quality management, purchasing, taxes, training, knowledge management, and so forth, and usually focus on functional areas of a business or on an industry I cannot imagine not subscribing to several of these as a way of sampling new thinking, learning from specific examples, and as a way of keeping current on trends and surveys They save you an enormous amount of time in your effort to stay current and well-rounded Index Barnes and Noble, 21, 147, 158 Behavior, in Information Age, 200-201 Bell, Daniel, xx, xxi, Best practices, role of, 70-72, 84 SCM and, 200 value of, 222 Black & Decker, 62 Boeing, 11; on the net, 141 Book stores, how they are changing, 1213 Branding, trends in, 26-27 British Airways, competency of, 56 British Library, 32 Braudel, Fernand, historian’s advise, 164 Brown, Charlie, on changing AT&T, 208 Buffett, Warren, 85 Burroughs, acquired by Unisys, 78 Business, future trends, 159-164, 207215 Business-to-business (B2B), trends in, 16 A ABB, 14, 45, 191 Activity-based costing (ABC), evolution of, 231-232 ADP, services of, 59 Alignment, role of, 76-77 Amazon.com, 14, 21, 30, 119-120, 141, 147, 158, 179, 186-187, 189 evolution of, 17-18 new brand, 23 speed of arrival of, 12 Ambiguity, value of, 227 America Online (AOL), 147 stock value of, 11 American Airlines, on the net, 141 use of computers by, 170 American Express, competency of, 56 Apple Computer, 77, 82, 224 AT&T, services of, 59 transformation of, 208 ATM, effect on banks, 23 Automotive Industry effect of Internet on, 149 high IT competency of, 61-62 C California State Universities, operating assumptions for, 211-212 Campbell Soup, 37 Carnegie, Andrew, value of people to, 122 Cars, as portable data centers, 62 Case, Steve, 206 B Bad practices, in knowledge management, 109-110 Bank One, 147 247 248 Castells, Manuel, views on information economy, 18 CEOs, role of, 74-75 Chandler, Jr., Alfred D., 47, 230 on industry skills, 210-211 on paths of learning, 54-55 Change, in work, 32-38 need to understand, 1-3 phases in economic evolution, 3132 rates of, 53 requires us to keep up, 227 Schumpeter’s views on, 191 strategy for keeping current, 241242 trend in physical markets, 29-31 waves of, 80-87, 209-215 Charles Schwab, 147, 191 informs customers via Internet, 145 use of Internet by, 142 Children, as users of computers, 20 Chips, computer described, 34-35 Cisco Systems, 13, 147 Citicorp, 106-107 Clark, Jim, 206 Coca-Cola, 23, 129, 191, 214, 217, 222 Classic Coke and, 82 exploits supply chain, 188-189 Collins, James, business evolution, 209 on value of vision, 208 COMDEX, 163 Commerce, how transformed by knowledge management, 65-70 Communities of practice, what they are, 111-112 Compaq, 61 customer relations with, 125-127 Competencies, exploiting, 53 evolution of corporate,55-65 focus on, 21 on acquiring, 64-65 Competition, based on competencies, 55-65 how to succeed, 148 in computer industry, 61 Internet-based, 150-157 trends in, 18 Computers, affect organizations, effects on types of measurements, 229 role in economy, 23-38 role in supply chains, 195-201 Computing, organizations and significance of online, 169171 Consumer Electronics Industry, role of Japanese in, 55 Continuous improvement, how used, 222 Corporations, cultures of influenced by knowledge management, 17-108 survival capability of, 77-78 Cost savings, SCM and, 177-178 Culture, corporations influenced by knowledge management, 107-108 Customer value management (CVM), 194 Customers, changing nature of, 40-41 economic power of, 175 emerging expectations of, 28-29; how they use Internet, 126 on listening to, 223-224 retention of help by SCM, 178 SCM and, 178 shifting role in value chains, 192193 Cycle time, part of GE’s strategy, 58 SCM reduces, 178, 184, 202 source of profits, 189 D Data mining, 146 Davenport, Thomas H., on knowledge management, 65 Decisions, fact-based increasing, 219 Dell Computers, 2, 23, 28, 61, 119, 147, 150, 179, 181, 189 customer relations with, 126-127 Index sales volumes, 142 supply chain, 199 Dell, Michael, 206 Deming, W Edwards, 121, 177, 210, 229 advocated process management, 72 Democracies, roles of, 39-40 Demographics, role of, 217 Deregulation, expansion of, 19 Dertouzos, Michael, ideas on future of IT, 224-225 Destroy Your Business.Com teams, described, 192 Digitalization, trends in, 23-38 Disney Company, 189, 191 Downsizing, 19, 222-223 effect on knowledge management, 107 Drucker, Peter F., xii, xx, 1, 3, 34, 73, 100, 164, 201, 207, 235 on management, 52; on role of knowledge E East Asia, computers in, e-Bay.com, 14, 18, 30, 119, 147, 179, 189, 195 e-business, features of, 135-165 future of, 159-164 how knowledge management works with, 116-120 E-Business Accelerator (EBA), 119 Economy, nature of, xix-xxvii e-KM, defined, 116 E-mail, as killer application, 151 E*Trade, 147 EDS, iv, 59 Efficiencies, cases from Internet, 141142 Egghead Software, sells over Internet, 145 Eisner, Michael, 189 Electronic Data Interchange (EDI), 16, 142, 160 lessons of, 173-174 249 Embedded technologies, role of, 129130 Employees, growth of responsibilities of, 73-75 skills will vary, 219; See also Workers Ernst & Young, xxii ERP, 172; influences SCM, 179 speed of implementation, 177 Europe, computers in, social changes in, 41-44 Executive information systems (EIS), 234 Experience, value of, 123-124 Explicit knowledge, described, 99 F Financial Times, 128 SCM study by, 177 Fischer, David Hackett, on waves of change, 83-84 Ford Motor Company, 82 IT competencies of, 62 SCM of, 173 trading hubs of, 181 Forecasting, issues and management practices, 215-221 Future, lessons about, 207-215 of Internet and business, 159-164 G Gardner, Howard, ideas on leadership, 235 Gates, Bill, xxii, 1, 123, 205, 214 GE, 191 corporate strategy of, 58 exploits SCM, 189 on the Net, 141-142 Geneen, Harold, valued measurements, 230 General Motors (GM), 2, 11, 106-107, 195 trading hubs of, 181 Gerstner, Louis V., 212 250 successes of, 88 Glaser, Rashi, on uses of Internet, 144 Globalization, management practices and, 45-46 trends in, 23-38 Governments, describing information economy, 9-10 in Information Age, xx Growth, how SCM helps, 178 rates of, 191 H Handy, Charles, 3, 172, 210, 212 Handed-down values, from new value chains, 194 Hertz, 17 service levels of, 60-61 Hewlett-Packard (H-P), 61 Historical perspective, how waves of change work, 80-87 value and use of, 63 History, perspective on Internet, 159164 Hitachi, 61 Homes, computer chips in, 35-36 Hussein, Saddam, xviii Huxley, Thomas Henry, quoted on use of knowledge, 68 I Iacocca, Lee, 205 IBM, xx, 13, 14, 23, 61, 68, 82, 83, 106107, 128, 129-130, 147, 158, 181, 189 competencies of, 57 distribution channels, 209 hires knowledge workers, 102 how its business changed, 11 in various waves of Internet use, 148 services of, 59 performance in 1990s, 99 SCM study by, 177 sells intellectual capital, 119 uncovers patterns of Internet adoption, 146-148 Watershed studies of, 20-21, 141 work life at, 123 IBM Retain System, described, 108 Industries, interest in competencies of, 60-63 what they teach managers, 63-65 Inflation, patterns of, 83 Information, economic value of, 227 IT subservient to, 224-228 nature and role of, 8-10 Information Age, defined, xxix-xxvii Information economics, age of, 3-13 Information Technology (IT), future of, 224-228 global investments in, 15-16 knowledge management tools, 104106, 121, 127-130 nature and rate of change in, 213 role in SCM, 195-201 stimulates need for knowledge workers, 96-97 supported by governments, 10 used in knowledge management 66-67 Inhibitors, to knowledge management, 106-107 Innovation, sources of, 149-150 Intel, 189 Intellectual capital, 99 Intellectual Capital System, Internet, arrival of, 7-8 benefits from, 142 effect on business practices, 14-23 effect on supply chains, 184-186 effect on value propositions, 14-23 effect on work, 135-165 extent of use, 44-45 future role of, 45-47, 159-164, 235236 influences work, 137-144 knowledge management and, 105106, 116-120 origins and significance of, 170-171 role of, 34-38 Index U.S taxes and, 30 trading hubs, 181 uniqueness of, 145-148 Intranets, 143 Inventory, modern control role, 195-196 SCM reduces, 177, 178 Ishikawa, Kaoru, 229 ITT, lessons learned by, 56 J Japan, dominance in consumer electronics, 55 Juran, Joseph, 210, 229 advocated process management, 72 K Kaplan, Robert S., popularized scorecards, 232 Kearns, David T., 208 Knowledge, value of, 224-228 Knowledge management, bad practices, 109-110 best practices, 120-131 business role of, 51-89 e-business role, 116-120 how to implement, 104-106, 108115 how transforms commerce, 65-70; process management and, 73 reasons for, 110-111 Knowledge workers, described, 95-131; effectiveness of, 102-110; in USA, 5-6 origins of, 100-103 L L.L Bean, on the Net, 142 Labor, content of products reducing, 126 productivity, 19 Land’s End, use of computers by, 170 Leadership, 224-228 251 in Information Age, 234-237 knowledge management and, 107 Learnings, effect on industries, 54-55 Lester, Richard K., ideas of, 223 Levi Strauss, on the Net, 141 Levitt, Theodore, ideas of, 57 Linz, Juan J., on democracy, 40 Lotus Notes, 66, 185 knowledge management tool, 106 Lycos, 18 M Machlup, Fritz, xx on information economy, Management, changing role of, 87-90, 123-124 challenges in Information Age, 4547 evolves into profession, 52-54 knowledge management and, 64-70 modern tasks of, 125-130 nature of, 221-224 of supply chains, 199 on managing Internet, 145-146 on sharing responsibilities, 74 Markets, access to, 149-150 entry and exit using knowledge management, 122 Marketspace, described, 153-154 Mass customization, role of, 25-26 McDonald’s, core competency of, 57-58 McNealy, Scott, 206 Measurements, trends in, 228-235 Mercedes-Benz, 214 IT competencies of, 62 Mergers and acquisitions (M&As), affected by technology, 181-182 trends, 17 Microsoft, 13, 187, 191, 213 acquisition strategy of, 59 hires knowledge workers, 102 value of knowledge at, 104 value of stock, 11 working conditions at, 123 252 Miniaturization, effect on devices and Internet, 143-144 MIT, 170 Mokyr, Joel, on technology, xxiv Motorola, 22 N Naisbitt, John, National Semiconductor, 146 Negroponte, Nicholas, Netscape, 18 role of knowledge management and, 105-106 Networks, effect on value propositions, 14-23; See also Internet Norberg, Arthur L., historian of the Internet, 161 O OECD, Online computing, origins of, 169-171 Organizations, affected by computers, effect of SCM on, 171-172 process–centric, 78-79 Outsourcing, 58-60 P Papows, Jeffrey P., 206 Parallelisms, role of, 31-34 Pepsi, 189 Persian Gulf War, analogy of, xx Personal Computer (PC), extent of deployment of, 6-7 how influences decisions, 213 how sold over Internet, 126-127 Pharmaceutical Industry, evolution of, 55 Phillips, 14, 68, 106-107 Physical buying, decline and, 29-33 Physical markets, decline of, 27-30 Pittiglio Robin Todd & McGarth, SCM study of, 177 Polaroid, 224 Politics, modern realities of international, 38-44 Porras, on business evolution, 209 on value of vision, 208 Porter, Michael, 21, 154 on competition, 56 value chain of, 193 Prepared mind, role of, 85 Priceline.com, 119, 147, 179 Pricing, trends in, 26 Process management, 84, 121-122 role of, 53-54 measurements of, 228-234 trends in, 70-80 reengineering results, 72-73 Processes, value of SCM as, 171-185 Proctor and Gamble (P&G), 216-217 Procurement process, Internet-based trading hubs, 181 Products, global visibility of, 27 internationalization of, 37-38 proliferation of, 25-27 Profit, role of new value chains, 186-194 Profit zones, concept of, 187-188 Prusak, Laurence, on knowledge management, 65 quoted on power of corporate culture, 110 Publication, on modern business issues, 243-248 Q Quality management, 72 R RCA, 55, 77 Reinvention, concept of, 190-193 Report cards, in business, 233-234 Research and development (R&D), role of, 223 Roles, of knowledge workers, 97-100 Index S Saab, on the Net, 142 SAP, 172 stock value of, 11 Scenario planning, 215 Schumpeter, Joseph A., ideas of, 191 Schwab, See Charles Schwab Scorecards, evolution of, 232-233 Scrap, SCM reduces, 177 Secretary, origin of job, 101-102 Security, of the Internet, 143 Sense and respond, new applications, 130-131 Shapiro, Carl, ideas of, 224 Shewhart, Walter A., 229 advocated process management, 72 Skills, 219 value of, 124 what is needed, 220 Slywotzky, 190 Adrian, ideas of, 187-188 Social changes, role of, 41-44 Standard & Poor’s, 128 Statistical process control (SPC), rise of, 229-230 Stephan, Alfred, on democracy, 40 Strategy, competing on competencies, 57 in Digital Economy, 22-23 required frequency of updates, 190 who creates, 74-75 Streamline, on the Net, 141 Supply chains, on linking to customers, 145-146 value of, 171-185 Supply chain management (SCM), 171202 T Tacit knowledge, defined Technology, how evolves, 161-164 Technology imperative, at work today, 162-163 253 Telecommunications, effect on SCM, 184-186 evolution and significance of, 169171 role in supply chains, 195-201 3M, 68, 105; competencies of, 57 value of knowledge at, 104 Time Warner, AOL merger and, 11 Toffler, Alvin, xx, xxi, 3, 37 Toro, 62 Toyota, 62, 72 Trading hubs, Internet-based, 181 Training, value of, 125-126 Transformation, waves of defined, 146149 Trends, making them work, 215-221 Trucking Industry, use of computers in, 11-12 TWA, 77 Tylenol, 222 U Unisys, absorbs Burroughs, 78 United States, arrival of Information Age in, 4-8 University of Texas, study of Internet deployment, 140 UPS, 147, 195 computing uses by, 12 use of Internet by, 171 U.S Library of Congress, U.S Postal Service (USPS), privatized, 19 Utility Industry, changes in, 193 V Value Added Network (VAN), 185 Value chains, nature of emerging, 186194 Value nets, concept described, 16-17 role of knowledge management in, 110-115 Value propositions, hunt for, 13-23 Van Gogh, Vincent, quoted, 202 254 Varian, Hal R., ideas of, 224 Vision, on value of, 208 Volvo, competency of, 56 W Wakin, Edward, on plastic knowledge, 69-70 Wal-Mart, 179, 195 Watson, Jr., Thomas, 205 Waves of change, described, 80-87 economic, 53 implications for management, 157158 Welch, Jack, 58, 189, 205 on knowledge management, 65, 89 Westinghouse, 77 Wilson, Pete, management assumptions of, 211-212 Wireless communications, future of, 143, 199-200 Women, office jobs for, 101-102 Work, changing nature of, 8-11, 122-123 effect of Internet on, 135-165 Workers, value of knowledge management to, 122; See also Employees World Wide Web, significance of, 171 X Xerox, 106-107, 224 transition of, 208 Y Yahoo!, 147 Y2K, 143, 213 ... Cortada, James W 21st century business: managing and working in the new digital economy / James W Cortada p cm Includes bibliographical references and index ISBN 0-13-030569-3 Business Data processing... references and index ISBN 0-13-030569-3 Business Data processing I Title: Twenty-first century business: managing and working in the new digital economy II Title HF5548.2.C6738 2000 650’0285—dc21... book is all about These are also the central issues faced by any business moving into the business climate of the twenty-first century Endnotes For an introduction to the history of this subject