Business @ the Speed of Thought: Using a Digital Nervous System

Business @ the Speed of Thought: Using a Digital Nervous System

by Bill Gates

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Overview

Business @ the Speed of Thought: Using a Digital Nervous System by Bill Gates

As the cofounder, chairman, and chief executive officer of Microsoft, the world's leading provider of software for personal computers, Bill Gates played a prominent role in launching the Information Age. Now this modern visionary reveals how expanding technology is propelling the business world into an exciting new economic era....how every manager can - and must - stay ahead of the curve...and how integrated information systems can help every organization achieve....Business at the Speed of Thought.

Changes are your company has a sizable investment in technology - and is realizing only 20 percent of its potential benefit. As Gates explains, you're probably viewing hardware and software as a way to solve specific problems. But like a living organism, an organization functions best if it can rely on a nervous system that will instantaneously deliver information to the parts that need it. In clear, nontechnical language, Business at the Speed of Thought shows you how a digital nervous system can unite all the systems and processes under one common infrastructure, releasing rivers of information and allowing your company to make a quantum leaps in efficiency, growth and profits.

With eye-opening, detailed tours, into Microsoft and other major corporations, Gates unveils the way digital nervous systems - from the simplest to the most sophisticated - are revolutionizing the very nature of business. You'll learn how integrated technology can:

  • instantly access scattered information to analyze patterns and trends
  • decrease cycle time and get new products out before the competition
  • deliver up-to-the-minute sales and inventory statistics on every one of your products, anywhere in the world
  • help customers solve their own problems and, using intelligent software, automatically feed complaints to designers and line workers

.....and much more.

"I have the simple but strong belief," Gates writes. "How you gather, manage, and use information will determine whether you win or lose." Business at the Speed of Thought gives you the information you need to win.

About the Authors:

Bill Gates is the chairman and chief executive officer at Microsoft Corporation. His vision and commitment regarding personal computing have been central to the success of Microsoft and in the advancement of software technology. He lives with his wife, Melinda, and daughter, Jennifer, in the Seattle area.

Collins Hemingway is director of executive communications at Microsoft Corporation. He had been involved with Microsoft's systems products since 1987 and from 1994 to 1996 was director of international and partner marketing for the Personal and Business Systems Division.

Product Details

ISBN-13: 9780446609333
Publisher: Grand Central Publishing
Publication date: 05/28/2000
Pages: 560
Product dimensions: 4.25(w) x 6.75(h) x 0.87(d)

Read an Excerpt



Introduction


Business is going to change more in the next ten years than it has in the last fifty.

As I was preparing my speech for our first CEO summit in the spring of 1997, I was pondering how the digital age will fundamentally alter business. I wanted to go beyond a speech on dazzling technology advances and address questions that business leaders wrestle with all the time. How can technology help you run your business better? How will technology transform business? How can technology help make you a winner five or ten years from now?

If the 1980s were about quality and the 1990s were about reengineering, then the 2000s will be about velocity. About how quickly the nature of business will change. About how quickly business itself will be transacted. About how information access will alter the lifestyle of consumers and their expectations of business. Quality improvements and business process improvements will occur far faster. When the increase in velocity of business is great enough, the very nature of business changes. A manufacturer or retailer that responds to changes in sales in hours instead of weeks is no longer at heart a product company, but a service company that has a product offering.

These changes will occur because of a disarmingly simple idea: the flow of digital information. We've been in the Information Age for about thirty years, but because most of the information moving among businesses has remained in paper form, the process of buyers finding sellers remains unchanged. Most companies are using digital tools to monitor their basic operations: to run their production systems; to generatecustomer invoices; to handle their accounting; to do their tax work. But these uses just automate old processes.

Very few companies are using digital technology for new processes that radically improve how they function, that give them the full benefit of all their employees' capabilities, and that give them the speed of response they will need to compete in the emerging high-speed business world. Most companies don't realize that the tools to accomplish these changes are now available to everyone. Though at heart most business problems are information problems, almost no one is using information well.

Too many senior managers seem to take the absence of timely information as a given. People have lived for so long without information at their fingertips that they don't realize what they're missing. One of the goals in my speech to the CEOs was to raise their expectations. I wanted them to be appalled by how little they got in the way of actionable information from their current IT investments. I wanted CEOs to demand a flow of information that would give them quick, tangible knowledge about what was really happening with their customers.

Even companies that have made significant investments in information technology are not getting the results they could be. What's interesting is that the gap is not the result of a lack of technology spending. In fact, most companies have invested in the basic building blocks: PCs for productivity applications; networks and electronic mail (e-mail) for communications; basic business applications. The typical company has made 80 percent of the investment in the technology that can give it a healthy flow of information yet is typically getting only 20 percent of the benefits that are now possible. The gap between what companies are spending and what they're getting stems from the combination of not understanding what is possible and not seeing the potential when you use technology to move the right information quickly to everyone in the company.


CHANGING TECHNOLOGY AND EXPECTATIONS


The job that most companies are doing with information today would have been fine several years ago. Getting rich information was prohibitively expensive, and the tools for analyzing and disseminating it weren't available in the 1980s and even the early 1990s. But here on the edge of the twenty-first century, the tools and connectivity of the digital age now give us a way to easily obtain, share, and act on information in new and remarkable ways.

For the first time, all kinds of information—numbers, text, sound, video—can be put into a digital form that any computer can store, process, and forward. For the first time, standard hardware combined with a standard software platform has created economies of scale that make powerful computing solutions available inexpensively to companies of all sizes. And the "personal" in personal computer means that individual knowledge workers have a powerful tool for analyzing and using the information delivered by these solutions. The microprocessor revolution not only is giving PCs an exponential rise in power, but is on the verge of creating a whole new generation of personal digital companions—handhelds, Auto PCs, smart cards, and others on the way—that will make the use of digital information pervasive. A key to this pervasiveness is the improvement in Internet technologies that are giving us worldwide connectivity.

In the digital age, "connectivity" takes on a broader meaning than simply putting two or more people in touch. The Internet creates a new universal space for information sharing, collaboration, and commerce. It provides a new medium that takes the immediacy and spontaneity of technologies such as the TV and the phone and combines them with the depth and breadth inherent in paper communications. In addition, the ability to find information and match people with common interests is completely new.

These emerging hardware, software, and communications standards will reshape business and consumer behavior. Within a decade most people will regularly use PCs at work and at home, they'll use e-mail routinely, they'll be connected to the Internet, they'll carry digital devices containing their personal and business information. New consumer devices will emerge that handle almost every kind of data—text, numbers, voice, photos, videos—in digital form. I use the phrases "Web workstyle" and "Web lifestyle" to emphasize the impact of employees and consumers taking advantage of these digital connections. Today, we're usually linked to information only when we are at our desks, connected to the Internet by a physical wire. In the future, portable digital devices will keep us constantly in touch with other systems and other people. And everyday devices such as water and electrical meters, security systems, and automobiles will be connected as well, reporting on their usage and status. Each of these applications of digital information is approaching an inflection point—the moment at which change in consumer use becomes sudden and massive. Together they will radically transform our lifestyles and the world of business.


Already, the Web workstyle is changing business processes at Microsoft and other companies. Replacing paper processes with collaborative digital processes has cut weeks out of our budgeting and other operational processes. Groups of people are using electronic tools to act together almost as fast as a single person could act, but with the insights of the entire team. Highly motivated teams are getting the benefit of everyone's thinking. With faster access to information about our sales, our partner activities, and, most important, our customers, we are able to react faster to problems and opportunities. Other pioneering companies going digital are achieving similar breakthroughs.

We have infused our organization with a new level of electronic-based intelligence. I'm not talking about anything metaphysical or about some weird cyborg episode out of Star Trek. But it is something new and important. To function in the digital age, we have developed a new digital infrastructure. It's like the human nervous system. The biological nervous system triggers your reflexes so that you can react quickly to danger or need. It gives you the information you need as you ponder issues and make choices. You're alert to the most important things, and your nervous system blocks out the information that isn't important to you. Companies need to have that same kind of nervous system—the ability to run smoothly and efficiently, to respond quickly to emergencies and opportunities, to quickly get valuable information to the people in the company who need it, the ability to quickly make decisions and interact with customers.

As I was considering these issues and putting the final touches on my speech for the CEO summit, a new concept popped into my head: "the digital nervous system." A digital nervous system is the corporate, digital equivalent of the human nervous system, providing a well-integrated flow of information to the right part of the organization at the right time. A digital nervous system consists of the digital processes that enable a company to perceive and react to its environment, to sense competitor challenges and customer needs, and to organize timely responses. A digital nervous system requires a combination of hardware and software; it's distinguished from a mere network of computers by the accuracy, immediacy, and richness of the information it brings to knowledge workers and the insight and collaboration made possible by the information.

I made the digital nervous system the theme of my talk. My goal was to excite the CEOs about the potential of technology to drive the flow of information and help them run their businesses better. To let them see that if they did a good job on information flow, individual business solutions would come more easily. And because a digital nervous system benefits every department and individual in the company, I wanted to make them see that only they, the CEOs, could step up to the change in mind-set and culture necessary to reorient a company's behavior around digital information flow and the Web workstyle. Stepping up to such a decision meant that they had to become comfortable enough with digital technology to understand how it could fundamentally change their business processes.

Afterward a lot of the CEOs asked me for more information on the digital nervous system. As I've continued to flesh out my ideas and to speak on the topic, many other CEOs, business managers, and information technology professionals have approached me for details. Thousands of customers come to our campus every year to see our internal business solutions, and they've asked for more information about why and how we've built our digital nervous system and about how they could do the same. This book is my response to those requests.


I've written this book for CEOs, other organizational leaders, and managers at all levels. I describe how a digital nervous system can transform businesses and make public entities more responsive by energizing the three major elements of any business: customer/partner relationships, employees, and process. I've organized the book around the three corporate functions that embody these three elements: commerce, knowledge management, and business operations. I begin with commerce because the Web lifestyle is changing everything about commerce, and these changes will drive companies to restructure their knowledge management and business operations in order to keep up. Other sections cover the importance of information flow and special enterprises that offer general lessons to other organizations. Since the goal of a digital nervous system is to stimulate a concerted response by employees to develop and implement a business strategy, you will see repeatedly that a tight digital feedback loop enables a company to adapt quickly and constantly to change. This is a fundamental benefit to a company embracing the Web workstyle.

Business @ the Speed of Thought is not a technical book. It explains the business reasons for and practical uses of digital processes that solve real business problems. One CEO who read a late draft of the manuscript said the examples served as a template for helping him understand how to use a digital nervous system at his company. He was kind enough to say, "I was making one list of comments to give to you, and another list of things to take back to implement in my company." I hope other business readers discover the same "how to" value. For the more technically inclined, a companion Web site at www.Speed-of-Thought.com provides more background information on some of the examples, techniques for evaluating the capabilities of existing information systems, and an architectural approach and development methodologies for building a digital nervous system. The book site also has links to other Web sites I reference along the way.

To make digital information flow an intrinsic part of your company, here are twelve key steps:


For knowledge work:


1. Insist that communication flow through the organization over e-mail so that you can act on news with reflexlike speed.

2. Study sales data online to find patterns and share insights easily. Understand overall trends and personalize service for individual customers.

3. Use PCs for business analysis, and shift knowledge workers into high-level thinking work about products, services, and profitability.

4. Use digital tools to create cross-departmental virtual teams that can share knowledge and build on each other's ideas in real time, worldwide. Use digital systems to capture corporate history for use by anyone.

5. Convert every paper process to a digital process, eliminating administrative bottlenecks and freeing knowledge workers for more important tasks.


For business operations:


6. Use digital tools to eliminate single-task jobs or change them into value-added jobs that use the skills of a knowledge worker.

7. Create a digital feedback loop to improve the efficiency of physical processes and improve the quality of the products and services created. Every employee should be able to easily track all the key metrics.

8. Use digital systems to route customer complaints immediately to the people who can improve a product or service.

9. Use digital communications to redefine the nature of your business and the boundaries around your business. Become larger and more substantial or smaller and more intimate as the customer situation warrants.


For commerce:


10. Trade information for time. Decrease cycle time by using digital transactions with all suppliers and partners, and transform every business process into just-in-time delivery.

11. Use digital delivery of sales and service to eliminate the middleman from customer transactions. If you're a middleman, use digital tools to add value to transactions.

12. Use digital tools to help customers solve problems for themselves, and reserve personal contact to respond to complex, high-value customer needs.


Each chapter will cover one or more points—good information flow enables you to do several of these things at once. A key element of a digital nervous system, in fact, is linking these different systems—knowledge management, business operations, and commerce—together.

Several examples, particularly in the area of business operations: focus on Microsoft. There are two reasons. First, customers want to know how Microsoft, a proponent of information technology, is using technology to run our business. Do we practice what we preach? Second, I can talk in depth about the rationale for applying digital systems to operational problems that my company actually faces. At the same time, I've gone to dozens of pioneering companies to find the best practices across all industries. I want to show the broad applicability of a digital nervous system. And, in some areas, other companies have gone beyond us in digital collaboration.

The successful companies of the next decade will be the ones that use digital tools to reinvent the way they work. These companies will make decisions quickly, act efficiently, and directly touch their customers in positive ways. I hope you'll come away excited by the possibilities of positive change in the next ten years. Going digital will put you on the leading edge of a shock wave of change that will shatter the old way of doing business. A digital nervous system will let you do business at the speed of thought—the key to success in the twenty-first century.

Table of Contents

 
Introduction

I
INFORMATION FLOW IS YOUR LIFEBLOOD
1         MANAGE WITH THE FORCE OF FACTS
2         CAN YOUR DIGITAL NERVOUS SYSTEM DO THIS?
3         CREATE A PAPERLESS OFFICE

II
COMMERCE: THE INTERNET CHANGES EVERYTHING
4         RIDE THE INFECTION ROCKET
5         THE MIDDLEMAN MUST ADD VALUE
6         TOUCH YOUR CUSTOMERS
7         ADOPT THE WEB LIFESTYLE
8         CHANGE THE BOUNDARIES OF BUSINESS
9         GET TO MARKET FIRST

III
MANAGE KNOWLEDGE TO IMPROVE STRATEGIC THOUGHT
10        BAD NEWS MUST TRAVEL FIRST
11        CONVERT BAD NEWS TO GOOD
12        KNOW YOUR NUMBERS
13        SHIFT PEOPLE INTO THINKING WORK
14        RAISE YOUR CORPORATE IQ
15        BIG WINS REQUIRE BIG RISKS

IV
BRING INSIGHT TO BUSINESS OPERATIONS
16        DEVELOP PROCESSES THAT EMPOWER PEOPLE
17        INFORMATION TECHNOLOGY ENABLES REENGINEERING
18        TREAT IT AS A STRATEGIC RESOURCE

V
SPECIAL ENTERPRISES
19        NO HEALTH CARE SYSTEM IS AN ISLAND
20        TAKE GOVERNMENT TO THE PEOPLE
21        WHEN REFLEX IS A MATTER OF LIFE AND DEATH
22        CREATE CONNECTED LEARNING COMMUNITIES

VI
EXPECT THE UNEXPECTED
23         PREPARE FOR THE DIGITAL FUTURE

APPENDIX: BUILD DIGITAL PROCESSED ON STANDARDS
GLOSSARY
CUSTOMER ACKNOWLEDGEMENTS
INDEX

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