Systems; Infotech : Net age Network societies

TRIMILLENNIUM MANAGEMENT : INFOTECH
Net age Network Societies

By Nanoo G. Pamnani

In the last 150 years, since the Industrial Revolution began, we have witnessed as many inventions as all the generations before us. However, the number of those that have had a substantial impact on society has been relatively small. Electricity, aviation, telephones, television, antibiotics, and automobiles are the few that have made the globe shrink, changing the way people live, communicate, trade, and entertain. In the last 50 years, we celebrated the birth of the dream machine: the computer.

Initially, computers were perceived only as faster calculating machines. However, each year, their character changed, and they became powerful processing engines. Their most dramatic manifestation is the Net, and the various services that are available on it. The impact of the Net on society will be unparalleled. Soon, most of the civilised world will be wired to the Net just the way it is today wired to the telephone. Everyone is going to get on to the bandwagon: manufacturers, distributors, suppliers, journalists, doctors, patients, teachers, students, and customers.

This will have a significant impact on every field that we can imagine. The impact is already visible in the manufacture-supply-demand chain as well as linked financial services. Gradually, the role of the middleman will diminish. The manufacturing organisation itself will undergo substantial change, with concepts like just-in-time becoming real possibilities, thereby eliminating the need for stocking inventories t and freeing cash. Control will, obviously, be in the hands of the customer, which will instill efficiency and quality in manufactured goods, as well as manufacturing and distribution systems. Banks will feel less of a need to maintain a physical presence. By the same analogy, it is a matter of time before most people shop on the Net. Consequently, the existing distribution channels-like shopping malls and supermarkets-will be impacted.

There are already enough indicators to show that the distribution of music and motion pictures will see a substantial change this millennium. Thus, the number of cinemas, video libraries, and record shops will simply shrink. The customer will be able to order the music or the motion-picture of her choice on-line, in real-time, for a few rupees charged to her credit or debit card account. She will not need to physically visit a video- or record-shop, and worry about parking problems!

In the West, there is already a trend of Internet Service Providers (ISPs) subsidising the pc industry. Companies advertise special offers where customers are given free PCs; they only pay for the Net usage. This will speed up the spread of the pc, which will still remain the basic computing device across homes, cities, and villages. Then, the Net and digital-imaging technologies will make it possible for companies to centralise automated processing, and distribute tasks that require human inputs and judgement to a workforce that can choose to work from where it is.

Over time, employees will choose to work from home and download their everyday tasks from a central location. This will have a tremendous impact on the way offices are organised, and the way people organise their time. This may even change the way our cities are planned. There will be no need for huge office-spaces. Nor will the transport-infrastructure have to cater to rush-hour transport. Sometime in this millennium it will even be possible for medical experts sitting in places far away from where the patient is located to readily give medical advice on-line after having the required data fed to them over the Net. The list of such possibilities is endless: the impact of the Net will be breathtaking!

The Net will certainly impact the way a traditional business unit is organised. With seamless gateways and networks (essentially portals) that connect them to other constituents now becoming technologically possible, companies can focus on their core operations. The rest, which is non-core, can be farmed out to specialised service-providers. There will be portals for investment services, accounting services, taxation services, and payroll services. All these will enhance the productivity and efficiency of management teams. The world will make a transition to virtual organisations, virtual staff, and virtual storage.

India is fortunate to have embraced the Net revolution at its inception. We have a large number of world-class software professionals who are playing a vital role in introducing this technology to India. This is one opportunity that we cannot afford to lose. We can make up for all the time lost in the 1970s and 1980s by leapfrogging into the e-world. Our professionals-the business community, managers, engineers, software professionals-have the ability. Fortunately, the government also seems to have understood the importance of being the leader in this e-volution. Efforts to privatise the ISP business and create an effective telecom infrastructure point to this.

The Net breaks artificial boundaries of geography, making the global market an economic reality. This can be a threat as well as an opportunity. In the previous century, the Indian business community reacted negatively to any efforts to open up the economy; it yearned for protection from competition. This desire for protection, many companies and individuals soon realised, wasn't good for the country. Nor was it good for the customer. E-commerce and the Net will change this. The power will be in the hands of the customer, and companies will be forced to compete in the global e-market by improving the quality and delivery of their goods. This is an imperative for survival. Indian companies should see this as an opportunity,-not a threat. By improving quality, they can widen their market beyond India. New models like farming out processing, and reducing inventories can be efficiently developed through the Net to drive down costs.

The impact of Net-enabled technology will require companies to relook at their entire business model, reevaluate markets and opportunities, reengineer all their processes, and create a new organisational structure to suit this re-engineered vision. Consequently, the new structure will be a flat and lean one. There will be demand to reduce office-space, use portals to buy on-line services from specialised agencies, sharpen the focus on core activities, cut costs to the minimum, and maximise productivity and the bottomline. The key is in comprehensive reengineering and radical out-of-the-box thinking. Minor modifications will not do. You have to set bold goals of improving productivity or profits by 10 or 100 times-and not by 10 per cent!

Nanoo G. Pamnani is the CEO of Citi Bank India

Issue Contents Write to us Subscriptions Syndication