InformationWeek
Defining The Business Value Of Technology
October 25, 1999
From CD-ROMs To Fish FarmsBy Rusty Weston
Peter Drucker didn't invent business management theory, but no one else this century has come close to being as influential. At 90 years old, Drucker is still writing about management trends and trying to gaze into the future.
Unfortunately, his crystal ball isn't as clear as it once was. Does it matter? What can anyone reasonably expect of Drucker after 60 years in which he's authored nearly 50 books, influenced countless numbers of CEOs, and awed millions of business students?
Still, the Atlantic Monthly, that starchy high-tech observer, hired Drucker to write a cover story called, promisingly: "Beyond the Information Revolution." That's a tall order for any pundit to deliver, even Drucker, the man who coined the phrase "knowledge worker."
But does anyone aside from Drucker and a few Atlantic Monthly editors believe the information revolution is over? (Although, of course, we already know who wins, and it isn't the have-nots.) To say the information revolution is over is tantamount to saying the world is without hunger because the United States has excess food capacity.
Think about everything and everyone on the planet left unwired. Think about the fact that knowledge workers still complete many forms on paper even though PCs are sitting on their desks. How many executives today know how to customize or pull management reports on demand?
Drucker is no stranger to information technology, but his opinions are a bit curious. He likes to draw historical allusions between breakthroughs of a century ago and now. "Like the steamboat," he writes, "the CD-ROM has not immediately caught on." Why does that matter? Drucker believes the CD-ROM is "the only exception" to what he asserts is the key contribution of the information revolution, which has merely "routinized traditional processes."
Well, Professor, by my scorecard you're a little bit right and a whole lot wrong. According to Dataquest, there's an installed base of 175 million CD-ROMs in the United States. There are only 263 million citizens. That's a fairly deep penetration, give or take the fact that some of us have three CD-ROMs between work and home computers. Elsewhere, the CD-ROM has not made much of an impact outside the United States, with only 75 million units in deployment, according to Dataquest.
Here's the rub: Who thinks the CD-ROM is so transcendent? Granted, I'm glad I have one, but only to install software, which if you think about it is just a faster routine than what was available on diskette. Talking books on CD-ROM are cool--especially if you're 4 years old. But I wouldn't want an encyclopedia on a (static) CD--I'd want it on the (dynamic) Web.
So what's next? In Drucker's view, "E-commerce is to the information revolution what the railroad was to the industrial revolution--a totally new, totally unprecedented, totally unexpected development." Like nearly everyone else, he believes E-commerce is having a transformational effect upon the economy, society, and politics.
But Drucker apparently misunderstands the economics at play here. E-commerce activity today is but a fraction of E-business. E-commerce barely constitutes 1% of the world's economy. E-business, which also includes supply chains and by most definitions business-to-business E-commerce, is what's having a transformational impact upon the economy. To key on two familiar E-business examples: Inventory management and corporate procurement will never be the same.
Most Americans are not buying most of their books, toys, food, cars, or office supplies on the Web. Though inevitable, it will be years before the Web becomes the dominant channel in these areas. The other channels of distribution will evolve, but it's highly unlikely they will disappear.
Drucker offers another prediction about the future, and you may want to call your brokers about this one. This one's outside of my area of expertise. (Although if you're like me, you will check it out on the Web.) Two words: fish farming. Drucker says it could change us from "hunters and gatherers on the seas into 'marine pastoralists.'" I can hardly wait.
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