Andrew McAfee

In the information era, the best of times are the worst of times. Computer hardware keeps getting faster, cheaper, and more portable; new technologies such as mashups, blogs, wikis, and business analytic systems have captured the imagination; and corporate IT spending has bounced back from the plunge it took in 2001. In 1987, U.S. corporations’ investment in IT per employee averaged $1,500. By 2004, the latest year for which government data are available, that amount had more than tripled to $5,100 per employee. In fact, American companies spend as much on IT each year as they do on offices, warehouses, and factories put together.

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Reprint: R0611J
The information age has brought with it a host of new technologies&#8212;and an overabundance of choices. Managers are hard-pressed to figure out what all those innovations do, let alone which ones to adopt and how to implement them. Furthermore, many so-called advancements haven&#8217;t lived up to expectations: Frustration, delays, and even outright failures tempt many executives to avoid dealing with IT altogether.
But those who turn away are selling their companies short. Executives have three critical responsibilities when it comes to IT: They must help choose technologies, using an inside-out approach that keeps the true needs of the business in mind; smooth the adoption of those technologies, taking into account that they may encounter strong resistance; and encourage their exploitation, by leveraging already standardized data and work flows. What&#8217;s most important, though, is that they look beyond the individual IT projects they select to the broader picture of how IT is likely to affect the organization.
Information technology can be classified into three types, each of which provides companies with a particular level of change. Function IT encompasses technologies&#8212;such as spreadsheet and word-processing applications&#8212;that streamline individual tasks. Network IT includes capabilities like e-mail, instant messaging, and blogs and helps people communicate with one another. Enterprise IT brings with it approaches such as customer resource management and supply chain management and lets companies re-create interactions between groups of workers or with business partners. Different types of technology bring about different types of organizational change, and managers should tailor their own roles accordingly.
Categorizing IT in this manner can help leaders determine which technologies to invest in and how they can assist organizations in making the most of them.

Mastering the Three Worlds of Information Technology

Reprint: R0611J The information age has brought with it a host of new technologies—and an overabundance of choices. Managers are hard-pressed to figure out what all those innovations do, let alone which ones to adopt and how to implement them. Furthermore, many so-called advancements haven’t lived up to expectations: Frustration, delays, and even outright failures tempt many executives to avoid dealing with IT altogether. But those who turn away are selling their companies short. Executives have three critical responsibilities when it comes to IT: They must help choose technologies, using an inside-out approach that keeps the true needs of the business in mind; smooth the adoption of those technologies, taking into account that they may encounter strong resistance; and encourage their exploitation, by leveraging already standardized data and work flows. What’s most important, though, is that they look beyond the individual IT projects they select to the broader picture of how IT is likely to affect the organization. Information technology can be classified into three types, each of which provides companies with a particular level of change. Function IT encompasses technologies—such as spreadsheet and word-processing applications—that streamline individual tasks. Network IT includes capabilities like e-mail, instant messaging, and blogs and helps people communicate with one another. Enterprise IT brings with it approaches such as customer resource management and supply chain management and lets companies re-create interactions between groups of workers or with business partners. Different types of technology bring about different types of organizational change, and managers should tailor their own roles accordingly. Categorizing IT in this manner can help leaders determine which technologies to invest in and how they can assist organizations in making the most of them.

Mastering the Three Worlds of Information Technology

Summary.

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