Publication Date: August 9, 1996

Moving Into the 'Information Age'

By Anita J. Freed

"The only competitive advantage is better information."
Scott Semple, president, NewTHINK, Inc.

It's an unequivocal statement, and one that few of Semple's colleagues would state as emphatically. But the idea that better information provides the competitive advantage should not be dismissed lightly, for it touches on a major shift in business practice. In a high-tech economy, the traditional cornerstones of competition – land, labor, capital – take on less importance. Products and services can be emulated (the proliferation of automated teller machines is a good example). But better information – or, more specifically, the ability to better access and analyze your corporate data – stands out as one holding that rivals will have a hard time duplicating.

The implications of this are many. For one, information technology gains a pivotal role as business managers demand more useful information. IT departments face continuing pressure to align their practices with corporate goals. As more companies adopt data warehousing and similar practices to make better use of their information, those slow to make the move become more vulnerable. All of this points to the need for companies to invest – either through training or outsourcing – in the skills needed to move squarely into the so-called Information Age.

Semple, a consultant whose Maryland-based company focuses on data warehouse architecture and design, says business has shifted its perspective from looking at IT as solely a technology issue to looking at it as a strategic resource. That change, he says, reflects technical advances that enable companies to trap data reliably and consistently. "For 20 years we were trying to answer the technology questions. We were so consumed – can we trap all those transactions? We're just at the point now where we can take our attention away from the technology and get back to the business questions: Who do I do business with today? Why do they do business with me? And how can I keep them (as customers)?"

Admittedly, these are the types of questions business people have been asking for centuries. The difference is that today's enterprise-wide systems enable businesses to better capture data and extract information via complex queries, all at speeds unimaginable just a few years ago. The result is better answers to support the assumptions that lead to business decisions.

Pushing for Change

Perhaps not surprisingly, the impetus for building data warehouses comes not from IT departments but from end users, says Skip Garvin, a VLM64 sales manager for Digital Equipment Corp. and a colleague of Semple's. "Users know what [information] they can't get to and usually they know the million-dollar 'what-if' questions" that can justify an investment in new systems. Conversely, many IT personnel simply don't have the skills or experience to bring a data warehouse project forward, he says.

Garvin recalls one major consumer products company whose managers were very impressed with his demonstration of how a very large memory system could work. On a return visit, he learned the company's IT department had taken on the task of building the data warehouse – on a proprietary system that would not work with any of the major database products on the market. Such an effort is analogous to "painting yourself into a corner with non-drying paint," Garvin says. The mistake would have been avoided, he says, if the department had a clearer understanding of the new technology and its uses.

Jeremy Frank, president of Olympus Group, Inc., an Internet systems integrator based in Alexandria, Va., agrees that some companies lack the expertise to make use of new applications. "That's what's fueling the big drive to outsourcing – to get the skill set or technology transfer." The most valuable employees, he says, are those who combine "vertical" technical skills – in database or object-oriented programming, for example – with the "horizontal" thinking that encourages a company-wide perspective and job flexibility.

Investing in Education

Reflecting on the trend toward outsourcing, Garvin says it may be efficient for companies in the short term, but training provides a better return on investment in the long term. Professional training seminars and conferences, such as those provided by private companies or colleges, offer advanced knowledge for managers, executives and technical personnel. Major business schools are also beginning to recognize the special needs of managers working in the Information Age.

Since 1981, the Massachusetts Institute of Technology has offered a Management of Technology program through its Sloan School of Management. Robert Halperin, director of executive education at MIT, says the program – believed to be the first of its type in the country – teaches professionals to understand the links between IT and business needs. It also instructs students on how to develop and implement strategies for leading technology advances. Because about half of each class's students are from outside of the United States, a side benefit has developed: Managers learn to work across national and cultural boundaries, a valuable skill in today's global economy.

Halperin believes the market for executive management training is growing rapidly as companies trim employees, for the simple reason that they need to ensure that their remaining workers have the skills to take their companies to the next level. "My sense is they are willing to invest in those people," Halperin says.

Certainly, MIT's program remains popular. Two-thirds of the companies sponsoring students are "repeat customers." "We find that companies continue to send people. That to me is a litmus test as to whether this is effective," Halperin says.

Semple says a certain familiarity with computer technology is expected for any job. "Today, knowing technology – that is no more significant than speaking English or driving a car. These are basic assumptions whether you are hiring a school teacher or an insurance agent." But Oracle programmers, and others with specific, in-demand technical skills, "are still valued like NBA stars." And the most powerful combination, he says, is to have a strong business background and a solid grounding in today's technology.

Anita J. Freed is an Internet project manager at DCI.

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Scott Semple is a featured speaker at DCI's Data Warehouse World.

Many business schools offer executive training. In addition to the Management of Technology program at MIT's Sloan School of Management, you may want to check out the executive education programs at the Harvard Business School and at the University of Pennsylvania's Wharton School.

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