The Power of it survival Guide for the cio

Information Technology

According to Professor Russell Ackoff [1], the content of the human mind can be classified into five categories:

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  Data – symbols. Data is raw; it simply exists and has no significance beyond its existence. It can exist in any form, usable or not. It does not have meaning of itself. For example, a spreadsheet generally starts out by holding data.
  
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  Information - data that is processed to be useful. Answers to "who", "what", "where", and "when" questions. Information is data that has been given meaning by way of relational connection. This "meaning" can be useful, but does not have to be. For example, a relational database makes for information from the data stored within it.
  
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  Knowledge - application of data and information. Answers the "how" question; Knowledge is the appropriate collection of information; such that it's intent is to be useful. Most of the Information systems we use exercise some type of stored knowledge (the business rules).
  
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  Understanding - appreciation of "why". For example, elementary school children memorize knowledge of the "times table". They can tell you that "2 x 2 = 4" because they have amassed that knowledge (being included in the times table). But when asked what is "123 x 456", they can not respond correctly because that entry is not in their times table. To correctly answer such a question requires understanding.
  
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  Wisdom - evaluated understanding. Unlike the previous categories, wisdom deals with the future because it incorporates vision and design.
  

The changing role of IT

Early computers – mainframes - were too large and expensive to have broad application in business. In the 1960s, they became cost-effective and widely adopted and standards and languages were developed specifically for business use. Initially, though, the mainframe had a purely supporting role, mostly in the accounting department. This was the era of Electronic Data Processing (EDP).

In the beginning of the 1980s IBM introduced the first Personal Computer (PC) and published the technical details of this machine. This opened the possibility for other companies to make IBM compatible computers and cheap clones. Individuals used these machines in their home environment but soon they infiltrated in the offices and on the production floors. At first, the EDP professionals did not know how to cope with this event. Some thought it was just hype that would disappear as fast as it came, others simply ignored it and some began a war against these intruders. After a while, it became clear that the PC was there to stay. It had conquered its place in the organization; first as a stand-alone workstation, but rapidly the need to act as a terminal for the mainframe arose.
A few years later, two other evolutions took place: departmental computers and Local Area Networks (LANs). These technologies allowed people to share information and work together in small workgroups or company wide. These evolutions had another effect: where the good old EDP department only had one "client" within the organization, the newly born IT department suddenly had to cope with the whole organization. Almost every white-collar or blue-collar employee had a PC connected to the network. Where the users of traditional EDP were specialists in their branch and were therefore well trained to work with these systems, the newcomers only had a limited knowledge of computers. Specialized services like training classes and help desks had to be organized by the IT department.
Because of the improved productivity of the employees and because of the new ways to communicate and work together, the traditional hierarchies within the organizations began to fall apart. Terms like flat organizations and horizontal departments became common. Also, and this is an important issue, the dependency of IT increased dramatically. Information Technology supported almost every part of the business. As IT covered more and more facets of the business, it was more and more used to get a better insight in the business. Management Information Systems, Business Intelligence, Data Warehousing and Data Mining became part of the normal vocabulary of the business managers.

Meanwhile, another technological evolution took place: the digitalization of telecommunications. People and their computers started to join forces over networks and the analog communication technology was digitized. Because of this technological convergence many organizations took the decision to put communications under the same person who was in charge of the data processing business.

Today, IT is close to or even part of the core business in many organizations. This is the case in service organizations (banking, insurance, publishing, government...) whose nonmaterial products cannot exist without IT. Think of a simple bank account: this is a purely imaginary object without any physical manifestation; it only exists on the disks and in the memories of the bank's computers. The modern stock exchange is another example; all the transactions are merely bits and bytes floating around in the networks of the stockbrokers and again no physical exchanges take place. In many organizations, this is reflected by the presence of a representative in the senior management team: the Chief Information Officer (CIO). The CIO is in charge of both technology managers and business managers and is the link between these two. In other organizations, where IT is merely a support function, the IT Manager plays his role as the line manager of a technologically oriented department.

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