Magazine article Management Review

Silencing an Information-Age Tower of Babel

Magazine article Management Review

Silencing an Information-Age Tower of Babel

Article excerpt

Silencing an Information-Age Tower of Babel

In the beginning there were mainframes. Then along came minicomputers and workstations, followed by personal computers. These technological wonders were used throughout corporations, and they were good.

But unfortunately, divine guidance was lacking when it came to organizing computers within Big Business. True, each department might have a computer, but very often, one department's computer could not communicate with the machine down the hall. The result was an electronic Tower of Babel, with computers speaking in different tongues and little sharing of computer-stored information.

Companies today are looking at how computers can become more productive and be used to competitive advantage, especially as corporations plan their strategies for growth in the 1990s. Computer vendors believe they have solved part of the problem with enterprise networks, which are large systems that link the various islands of automation within a company. These technology-laden tentacles don't stop at the corporation's front door; they can extend out to a company's clients' or suppliers' offices both here and abroad. Indeed, as companies pursue global goals, they are finding that one necessary tool is enterprise networks.

"All of a sudden, you may have business relationships on four or five different continents. You need to have information as soon as possible from across the world. It's not, `I'll wait a few hours,' now it's `I'll wait a few minutes,'" says Lee Sudan, director of enterprise networks at computer maker Digital Equipment Corp. "In some industry segments, including financial, your bottom line relies on getting the information as quickly as possible."

Enterprise networking can yield long-term cost savings in terms of improved and faster communication. Merrill Lynch, for example, is said by computer analysts to have saved $200 million over a period of five years because of its efforts in this area.

ASSESSING THE PRACTICALITY

But such integration doesn't come cheap. Southern California Edison Co. of San Clemente, Calif., says its enterprise network - comprising 28 local-area networks that tie together more than 700 personal computers, seven mainframes and one minicomputer, and serving more than 1200 users - has saved $2 million to date, but the start-up costs of the 18-month-old system have been considerably more than the savings.

Southern California Edison's enterprise network helps manage a nuclear power plant, including the tracking of radiation and the relaying of important operations orders. The enterprise network is more than an operational tool, it is a safety feature for the utility company. For other firms trying to stay ahead in a global environment, networking is a competitive issue.

At General Motors Corp., engineers are trying to reduce by one-third the time it takes to develop and "press" out a car from the current five years to three years. The automobile manufacturer is networking to allow engineers to relay information to each other quickly, regardless of whether they are located next door or continents away from each other.

Other companies should follow GM's example, according to a five-year MIT study published last spring, "Management in the 1990s." "Whatever their size and pattern of organization, companies in the 1990s will increasingly look to information technology to integrate activities from the factory floor or point of sale to the president's office," the report said.

Information systems personnel aren't the only ones who should concern themselves with integration. The MIT study - sponsored by 12 corporate and public sector organizations - advises managers to "take steps now to embed information technology more deeply into the organization. Consider it a corporate task that senior managers need to address - not as technicians but as change managers."

The components of enterprise networking are as numerous as pieces of a complex puzzle. …

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