Quarterly Journal on Management
From the publishers of THE HINDU BUSINESS LINE
Vol. 2 :: Iss. 3 :: February 1999
Information Technology is all about power. The power of choice. The power to choose. At every level, every user of IT is presented with options to facilitate decision making. Rediff on the Net offers you a wide range of music and books on the internet. All that you have to do is add whatever you want to the shopping cart, go to the order page, enter the required details, and your purchase is sent to you 'usually' in about 24 hours.
If IT is making life easy for customers, it is also making it easy for companies. With the wide variety of data warehousing and data mining tools now available, what used to be linear data on customer profile can now be modelled against different parameters, and the right target can be reached. Where is the choice? You choose the parameters: post-graduate, reads english magazines and earns more than three lakhs a year; or, graduate, housewife aged between 35 and 45, and has access to cable television.
This kind of choice used to be available only to companies that maintained a meticulous customer profile database. Now, detailed profile data is available for a price. And general numbers, like the 350 million middle class Indians number, or 60 million internet users, are freely available on the internet. All you need today to get detailed information very quickly - if not for free, at least for a price - is access to the internet. And once you build a database, the possibilities for analysis is endless.
The availability of information means the power to offer a choice. Within the organisation, for all practical purposes, information is control. Your boss can access information about you - every transaction you have handled, every out of town trip that you have made, every entertainment bill that you produce. Just the fact that he can access all that information gives him some power over you. The key here is that he can access all this information, if he wants. On the other hand, he may choose not to. He has a choice to access the information, and he has a choice on what to do with the information.
Access to information is power. And the most important thing about power is the fact that responsibility goes with it. If you have power, you also have a responsibility to use the power ethically and effectively. The one problem with IT is its vulnerability to misuse. But that's not IT's fault; it's the fault of the person who misuses it. IT itself is open to misuse only because of its power to provide the user with a choice.
The exercise of power involves a dilemma: Control Vs Freedom. Do you use power (here, information) to control, or to free people? Is the information in your organisation always used to ask people for explanations, or is it used to give people something to think about their work's direction? William Halal, in The New Capitalism, writes that although control and freedom are antithetical to each other, the paradox of power is that more control can be achieved through freedom. This is because freedom is a difficult concept for most of us to handle.
With IT reducing erstwhile strategic problems to routine problems, managers have more time to lead - to plan, rather than just react. By the turn of the century, the only sustainable advantages a company will enjoy will be its ability to innovate - combining market and technology knowhow with the creative talents of knowledge workers to solve a constant stream of competitive problems - and its ability to derive value from information. To use information about the market, and combine it with technology effectively, an organisation needs to be a learning organisation.
In the Fifth Discipline, Peter Senge describes a learning organisation as one in which "people are continually learning how to learn together." Learning is a social process of interaction, and IT's primary function is to facilitate interaction between functional units of a firm, thereby encouraging learning. Learning on the institutional level can be defined as "the systemic capacity to change the codified models an organisation uses to interpret and act upon information." Technologies such as intranets and the internet have enabled organisations to create just such a synergistic institutional intelligence, in which the effectiveness of the organisation is greater than the sum of its employees' individual talents.
One has to remember that whatever said and done, the responsibility for an information system, its usage, and its results finally rests with the human users of the system. The major advantage with IT today is its speed. However, ironically, it is providing more information at a faster rate leading to information overload, and the human decision maker stalls the process by taking a long look (by computer standards) at everything. As more information moves from the 'strategic' category to the 'operational', and most of the information that an IT system will dump on the decision maker's screen is operational rather than strategic, the limiting factor is not what information is available but what to do with the information.
As Joseph Weizenbaum, a scientist at the Massachusetts Institute of Technology, wrote with reference to computers, in 1976: "Science promised man power... But, as so often happens when people are seduced by promises of power, the price is servitude and impotence. Power is nothing if it is not the power to choose."