Strate

In this, the
third of five col-
umns on strate-
gic systems,
James Martin
discusses how
puters can be
used to trans-
form bustness
processes.

The habit of
novi thinking in terms
MARTIN of strategic uses

. for personal com-

| puters ought to

pervade any enterprise that uses them.

The return on investment, from PCs
varies greatly from one organization to
another, of course. In some cases, per-
sonal computers generate no profit and
represent a financial drain. In other
cases, individuals may be using PCs to
automate specific business tasks, but the
improvement in efficiency often repre-
sents a return on investment of only 10
or 20 percent.

There's a much higher return on in-
vestment when PCs are used to make
fundamental changes in a business pro-
cess. Sometimes this occurs at the de-
partmental level, whereby a department
may be reorganized to achieve a high
level of automation of an entire business

process. All members of the department
have a personal computer and share the
same database.
Identifying a Strategy

The highest, return on investment
from personal computing is realized
when a strategic thrust is identified that
achieves a tremendous improvement in
efficiency or value of a business func-

tion by using computers.

Often this reguires a radical restruc-
turing of the organization and of the
business processes in order to take ad-
vantage of information technology. It
may involve links to customers or sup-
pliers, electronic document interchange
or the use of an expert system.

A 1987 study, 'Managing Personal
Computers in Large Organizations, by
Nolan, Norton € Co. of Lexington, Mass.,
divides corporate uses of personal com-
puters into four categories of evolution,
as shown in the figure. These categories
are described below.

Technical Proficiency

As personal computers begin to pene-
trate a business, early adopters learn
the new technology. Many of these users
create their own procedures using tools
such as Lotus 1-2-3, dBASE |Il,
PC/Focus, Javelin and so on.

Some users learn to build very so-
phisticated financial models or deci-
sion-support models, If an information

— Center has been established, it is typi-
cally used as a catalyst to promote
technical proficiency in the use of per-
-— sonal computers.

sic Uses for the

PG WEEKNAPPLICATION DEVELOPMENT.

NPPLIEO INTELLIGENCE

in this phase, personal computers are
used extensively within an organization
for automating specific business tasks
and improving individual productivity.

An information center may be used to
manage and support: end-user computing
and direct it toward the most profitable
applications. It may also play an active
role in the promotion of more advanced
technology, such as the building of ex-
pert, systems by end users.

Typical objectives of end-user comput-
ing in the task-automation phase in-
clude: 1) encouraging better decision-
making through the use of computerized

organization. Emphasis is generally
placed on improving or automating en:
tire business processes.

Users are tackling problems that have

a direct impact on cost or revenue; for
example, they are making better finan:

cial decisions, optimal purchases of bulk

chemicals, automated management of
purchasing decisions, just-in-time inven-
tory control, simplification of proce-
dures and so on. Often these individual
business functions are integrated within
an automated business process.
Investments in business-process auto
mation are driven by a tactical vision,

Steps to Ettective Business BC Usagd.

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The highest return on investment is realized when a strategic
thrust is identified that achieves a tremendous improvement
in efficiency or value of a business function.

tools and information; 2) encouraging
users to invent better procedures and
cut administration costs; 3) increasing
knowledge about, worker productivity;
4) bypassing the development, backlog of
the information-service department; 5)
ensuring that user-built, systems are
well-designed and maintainable; 6)

 greatly accelerating the development; of

most, systems that, users reguire.

In the task-automation phase, invest-
ments in end-user computing are driven
primarily by improvements in technolo-
gy rather than by a strategic business

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usually at the departmental level. A
threefold (that is, 300 percent) return
on investment may be attained.

Business Transformation

in the final phase of personal comput:
ing development, personal computers
have fully penetrated the business, usu-
ally with corporatewide networking.
The user community is now experienced
with PCs and capable of being creative
in their application.

Investments are driven by a strategic

business vision rather than a tactical vi:

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[DECEMBER 12, 1988

PC in Business Environments

phasizes what has been (ound elsewhere
when computer benefits have been mea:
sured: It pays to identify the most im-
portant uses of systems and concentrate
on those. This reguires management
leadership and strategic business-orient:
ed planning.

As in other new business thrusts, a
period of investment is needed, and the
results of the investment need continu-
ous attention from management, culti-
vating the new procedures and making
adjustments until the results can be har:
vested.

A major refocusing of information-sys-
tems management and end-user comput: |
ing may be needed to achieve the maxi
mum rate of return in an investment in
personal computing. Once personal com- |
puters are in widespread use and a
corporatewide network provides connec: |
tivity at a suitable level, a technical in- |
frastructure is in place that permits ma:
jor strategic thrusts with end-user com:
puting.

The era of isolated personal comput:
ers is rapidly evolving into an era of
networked personal computers that
share common databases. |

The term "cooperative processing" has/
come into use to describe systemsin |
which the best capabilities of the per- [
sonal computer and the mainframe are |
combined. ie

Cooperative processing links the per-. be

po s kn veke |: mia

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sonal computer and mainframe to com |...

bine both sets of advantages. Sometimes ||
complex cooperation is needed between 4
the software that. runs on the main- AE

frame and the software that runs on thež

EH
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desktop. He

IBM's Systems Application Architec: (E
ture, or SAA, is designed to provide
standards for application development E
in a cooperative-processing envi-
ronment.

Al applications have a similar look
and feel in their user dialogue andin. [W
their linkages to relational databases. |.
across multiple machines accessed by a (H.
common network. H

A new thrust using information tech: MW
nology may give a corporation a strong
competitive advantage for some years.

Eventually, however, the competitive
edge will be lost, because most, corpora:
tions will use the technology in the
same way. What is a strategic systems.
opportunity at one point in time may hej
an operational imperative five years
later.

The corporations that pull ahead are
the ones that seize the new opportunitij

na

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first. There needs to be a constant reafi! | :
sessment. of the new opportunities and

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hi,

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threats that new technology is bringintii
Next. week, I'll examine a methodolo MW"

gy for identifying strategic systems op.

portunities. 8 ee

terlyy, is available through High Pro-

ductivity Software Inc., of Marble-

head, Mass. (617) 639-1958. For info,
| the United States and Canada.) Tech:

laj gala Calif. zmo2 (21504
, in £urope, contact Savant, 2

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