ICT innovation… to be continued

Does anyone remember life before e-mail? Or secretaries who used to type letters? Or when a search for information meant going to the library or poring through back issues of magazines and paper files? How long is it since you had to find a working phone box to make an urgent call? Do you remember when the only computers were behind locked doors, and being invited into the data processing centre was like visiting a space launch, with flashing lights and whirring tape drives? And how long since you met a keypunch operator?

There is no doubt that ICT has transformed the way that we live and work.

IT has transformed business processes (such as payroll, billing systems and call centres) as well as less tangible areas, like collaboration and decision-making (e-mail, the Web, intranets and databases). The past five years have been a roller coaster in terms of technology planning, with enterprises needing to examine a broad range of technologies with far-reaching implications in application development and in business processes. However, the quantifiable benefits of IT are coming under scrutiny.

Nicholas Carr, editor at large for the Harvard Business Review, sparked discussion about the competitive advantage provided by IT, (see “IT doesn’t matter” in the Harvard Business Review, May 2003). Carr asserts that the era of IT innovations has ended and that IT is becoming an infrastructure, like electrical power. In Carr’s view, every company must have IT, but it doesn’t provide a competitive advantage as it used to when PCs, databases and other technologies were new. Therefore, he argues, companies should avoid overspending on IT and should focus most on preventing disruptions to IT infrastructure. But Carr is wrong when he contends that IT innovation is winding down. Innovation through electronically enabled services, processes and products has only just begun. IT will increase the speed, scale and cost-effectiveness of doing business.

In looking forward at the role that IT will play in the next five years, we need to take into account that we are entering a period of realism and pragmatism, particularly compared with the IT euphoria of the past five years. This can be viewed as aligning with a “Trough of Disillusionment” in Gartner’s high-level IT Hype Cycle. However, it is important to note that the trough also represents the beginning of the “Slope of Enlightenment”, when enterprises learn how to really take advantage of the transformational potential of technology.

Gartner’s emerging technology hype cycle shows no shortage of new technologies under development. Innovations in computing will extend technology laws. The quest for faster and faster computers is serious business. NEC’s Earthsimulator is currently the world’s fastest computer. Japan is trying to get a handle on earthquake prediction, for obvious reasons. Other uses of supercomputers are weather prediction, the simulation of chemical or nuclear reactions, the design and optimisation of drugs, and all kinds of other complex systems (like aircraft, cars and compounds).

Although it is inevitable that current technology will not take quantum leaps forever, we will see in the future new hardware approaches coming up (ranging from nanocomputer to molecular or quantum computers). In the nearer term, an older concept known for decades is gaining in popularity — grid computing. In this technique, enterprises bundle their unused PC cycle times together to form distributed supercomputers.

The need for speed will continue, driving enterprises towards real-time interactions. Integrated systems will treat voicemail and e-mail as interchangeable media, tied together by personal switching systems that locate users and deliver the message in the most convenient media. Biometrics will enable greater security, and greater personalisation.

Automated intermediaries will handle the bulk of low-level, non-detailed customer enquiries through a combination of Web browsing, speech recognition and human support. Because of the massive increase of digitisation, enterprises will experience dramatic growth in the amount of available data. In the area of knowledge management and business intelligence, we can expect significantly more convergence, because information management benefits greatly from data consolidation and information integration.

Service-oriented architecture and Web services will dominate by 2007. Service-oriented architectures, including Web services, will allow systems to be delivered as a series of interfaces that adhere to certain component and interface standards. Low-cost radio frequency ID tags will transform a broad range of supply chain functions by maintaining continuity of item identity and fine-grained visibility of products throughout the supply chain. Tagging and tracking will support “cradle to grave” applications, where consumers and enterprises can continue to interact well after the transaction has occurred — for example, when diagnosing faults, conducting safety checks or recalls, or in loss prevention.

But IT investments only pay off when they are accompanied by substantial organisational and human capital investments an order of magnitude higher than the IT capital expense.

Business in the IT industry will not return to normal as this current wave of negativity fades. Growth will be more moderate and sustainable. Success will come as the IT industry demonstrates that it provides business and economic value.

Predicting the future is difficult. Just ask Kenneth H Olsen, founder and chairman of Digital Equipment, who in the late 1970s said: “There is no reason anyone would want a computer in their home.” One billion PC purchasers later, the customer is always right. And ICT innovation will continue.

John Roberts is VP and chief of research, Asia/Pacific, Gartner

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