Pioneers and laggards

Headnote:

IBM researcher Cortada urges business to study the history of technology applications

Although much has been written on the history of computers, the story of how they have been used in business has been largely untold-until now.

James Cortada, an IBM senior researcher and author on the history of computers, has set out to correct that omission, starting with his new book, Information Technology as Business History (Greenwood Press, Westport, Conn., $69.50, http://www.greenwood.com). His work-in-progress, due out next fall, Best Practices in Information Technology (Prentice-Hall Inc., Upper Saddle River, NJ.), will further explore the benefits in store for IS professionals and business executives who mine the past.

Cortada notes that companies increasingly are studying, documenting, and sharing their operational histories. Those activities may be done under the banner of reengineering, quality management, benchmarking, or best practices, but all lead to a better under standing of how to act today and in the future.

In his role as an IBM senior researcher, Cortada handles both external and internal projects for the company's North American consulting services group. Recently, he has helped companies in various industries apply best practices to improve the responsiveness of IS to business needs.

InformationWeek senior writer Bruce Caldwell interviewed Cortada to find out more about his reasons for encouraging the study of how businesses have historically managed computers.

IW: How can a CIO apply lessons from the history of computing?

Cortada: It adds up to competitive intelligence for CIOs. If they understand how a technology has evolved, that tells them where the risks are and where their potential benefits lie. To the degree they understand that better, they will be able to act more boldly and make fewer mistakes. They will have more influence in the company by going to the CEO and saying, "I have found a better way to do business."

IW: What's in it for business executives?

Cortada: History can offer advice to executives on how to take the maximum advantage of technology by constantly looking at how a particular technology is used and how it will change. From patterns of technology adoption, you can learn lessons by understanding how other technologies were adopted, which is particularly important when you are trying to get into a new market or out of an old one.

The radical change in an industry will come from outside that industry. Companies invariably are capable of evolving their use of technology. But they can learn from other industries and other technologies, even those that are older, because they exhibit the same patterns of entry and departure. A lawn-mower company could be put out of business by genetic engineers who develop grass that never grows taller than one inch. That's the value of the history of technology.

IW: Why is this the right moment for taking up the history of computer use?

Cortada: There's a growing interest in looking at the historical trends in technology as a byproduct of quality management practices over the past 10 years. Implicit in the concepts of benchmarking and best practices is the notion of looking back at patterns of behavior and management.

We're just at the beginning of looking at the history of computer applications because enough time has gone by. In 1960, the inventory of computers was just 6,000. Then there was a huge explosion of first-time use. It wasn't until the late '80s when we could say that a lot of people have been using computers for a while and we could begin identifying patterns of behavior. The digital computer is in its 50th anniversary, but widespread use of computers is a '60s phenomenon.

IW: What has history shown about computer use?

Cortada: The first question people ask is, "How can I do my existing work better, cheaper, faster?" The idea of improved efficiencies is always there. Once you begin using a new technology, you can begin to think of new ways to use it that are specific to your company and industry.

Another pattern is lack of formal cost justification for IT systems. Executives always say their computer costs go up each year, and they don't see where they're getting their money's worth. But now, we are going into a period where senior executives have personal experience with computers, and they are asking tougher questions than ever before. People today are running audits to see what an IT investment got them; they didn't used to do that.

IW: Sabre-American Airlines' computerized reservation system-is one of the best-known examples of a profitable technology application. Can other industries take the principle of building a network for business transactions, creating dependency on the network, and charging fees for transactions?

Cortada: I can see that happening in other industries, especially.with the rise of network computing. I could expect to see case management in the insurance industry going this way, and the retail industry, where some retailers are brokering the catalog work for many others.

IW: Why do technologies that work for some companies sometimes take so long to be adopted by other companies?

Cortada: I've looked at 40 industries, and the rate of adoption and speed of penetration of technology varies. People move to new technology when they can do something they couldn't do before-like putting a PC on a truck. It will be cost-effective or cheaper, and it will be as easy and reliable-or more so than the current way. What's nice to have, but not a driving force, is new functionality. When new technology is applied, these things are rattling around because someone is trying to get a job done.

There's also a question of risk: "What are the odds I'll screw this up?" Then there are questions like, "Can I get to market faster, squeeze the competition out, block them from the marketplace?" And the answers are always slightly different for each industry. Timing also is of extraordinary importance. If you are uncomfortable with the ease of use of a particular technology, you may decide to wait a year. Then there will be more people using it, and you will jump. There will always be pioneers and laggards.

IW: What older technology has the most exciting potential for new applications?

Cortada: Logistics management is probably hottest right now. If you want to get a diamond ring, you've got to go all the way to the mountain where the diamonds are excavated, transport them to the people who cut and refine them, and then to the retailer. You can group those companies and link them with technologies. The network that links them would make Sabre look like chump change.

IW: What other patterns do you find in the use of computers?

Cortada: The centralization-vs.-decentralization debate has been going on for nearly 100 years. Everyone thinks that they are the first to debate it because they forget. Economies of scale change over time, and sometimes it's cheaper to decentralize, sometimes to centralize.