by January 4, 1999 0 comments

p>Using electronic forms saves money Using our
intranet to replace paper forms has produced striking results for us. Microsoft has
reduced the number of paper forms from more than a thousand to a company-wide total of 60
forms… Of the 60 remaining paper forms, 10 are required by law and 40 are required by
outside parties because their systems are still based on paper. The last 10 paper forms
are used so seldom that we haven’t bothered to make them electronic, yet. Businesses
have an incentive to persuade partners and governments to accept information
electronically, so that everybody can get to a fully digital approach with no paper.

Make data available every day One way to think of a digital nervous
system is as a way to give your internal staff the same kind of data for daily business
use, that you give a consultant for a special project… It’s just crazy that
someone outside your company receives more information than you use for yourself. If
consultants get more insight from your systems than you do, it should be because of their
unique abilities, not because you prepare information especially for them that isn’t
otherwise available to your staff. Example: How, using market and census data and MS Sales
and other software, Microsoft was able to double turnover from 38 low-activity cities to
$60 million, just by investing $1.5 million in externally-managed events.

Business data isn’t just for top management A company’s middle
managers and line employees, not just its high-level executives, need to see business
data. It’s important for me as a CEO to understand how the company is doing across
regions or product lines or customer segments, and I take pride in staying on top of those
things. However, it’s the middle managers in every company who need to understand
where their profits and losses lie, what marketing programs are working or not, and what
expenses are in line or out of whack. They’re the people who need precise, actionable
data because they’re the ones who need to act.

The scale changes to trillions Rapidly growing categories for online
commerce include finance and insurance, travel, online auctions and computer sales.
Today’s Internet customers are the technically savvy… Tomorrow’s customers
will be the mainstream. Even the most conservative estimates project an annual growth rate
of about 45 percent for online sales. The highest projections are for more than $1.6
trillion dollars in business by the year 2000. I think this number is too low.

The death of the middleman? Now that customers can deal directly with
manufacturers and service providers, there is little value added in simply transferring
goods or information. Various commentators have predicted “the death of the
middleman.” Certainly, the value of a “pass-through” middleman’s work
is quickly falling to zero. Travel agents who simply book plane fares will disappear. This
kind of high-volume, low-value transaction is perfect for a self-service Internet travel
reservation site. In the future, travel agents will need to do more than book tickets;
they will need to create a total travel adventure. A travel agent who provides highly
personalized tours of, say, Italy or the California wine country will still be in great
demand.

Speed even in complexity Intel has consistently had a 90-day production
cycle for its chips, which power most PCs. Intel expects to maintain this 90-day
production rate despite the increasing complexity of the microprocessor. The number of
transistors in the chip has increased from 29,000 in the 8086 in 1978 to 7.5 million in
the Pentium in 1998, and the microprocessor’s capability has grown ten thousand-fold
over the same twenty years. By 2011, Intel expects to deliver chips that have 1 billion
transistors. This exponential improvement stems from Moore’s Law, which says that the
power of microchips doubles every eighteen to twenty-four months. To put Moore’s Law
in perspective, if products such as cars and cereal followed the same trend as the PC, a
mid-sized car would cost $27, and a box of cereal would cost one cent.

Use technology to convert bad news to good Once you embrace unpleasant
news not as a negative but as an evidence of a need for change, you aren’t defeated
by it. You’re learning from it. It’s all in how you approach failures…
Unhappy customers are always a concern. They’re also your greatest opportunity.
Adopting a learning posture, rather than a negative defensive posture can make customer
complaints your best source of significant quality improvements. Adopting the right
technology will give you the power to capture and convert complaints into better products
and services fast.

Get a grip on numbers There’s no substitute for understanding your
numbers at a working level. Sometimes my friend Steve Ballmer, Microsoft’s president,
surprises the members of a product group by knowing their pricing schemes and sales
numbers–and the competitors’–better than the people presenting a plan to
him. He has a way of striding into a room and immediately asking the one question the team
doesn’t have an answer to. He’s done his homework, and he’s thought hard
about the issues that come out of the numbers. He sets a high priority on fact-based
decisions.

Data mining: money from those numbers Using software algorithms to find
useful patterns in large amounts of data is called data mining… Among the challenges
that data mining can help with: Predicting the likelihood of customers buying a specific
item based on their ages, gender, demographics and other affinities. Identifying customers
with similar browsing behaviors. Identifying specific customer preferences in order to
provide improved individual service. Identifying the date and times involved in sequences
of frequently visited Web pages or frequent episodes of phone calling patterns. Finding
all groups of items that are bought together with high frequency. This final technique is
usually valuable for merchants to uncover buying patterns, but a correlation between two
billing codes for the same procedure enabled an Australian healthcare provider to uncover
more than $10 million in double-billing fraud.

Kill tedium Having people focus on whole processes will allow them to
tackle more interesting, challenging work. A one-dimensional job (a task) will be
eliminated, automated, or rolled into a bigger process. One-dimensional, repetitive work
is exactly what computers, robots and other machines are best at–and what human
workers are poorly suited to and almost uniformly despise. Managing a process instead of
executing tasks makes someone a knowledge worker. And it is good digital information flow
that enables knowledge workers to play their unique roles, in a world where business
begins to take place at the speed of thought. n

Business @ the Speed of
Thought

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