Thirty years ago, the role of IT systems within most businesses was very limited. Since then, though, this relationship has reversed. Today, many companies feel it is their business that is holding back their IT systems.
In the 1970s and 80s, information technology was focused on specific departmental requirements. Companies like IBS, which had developed a sales order processing system, delivered solutions for specific functional requirements. This led to islands of technology where departments developed and maintained their own systems in isolation from the rest of the organization.
The 1980s were the glory years for hardware platforms. The personal computer put real processing power onto the desktops of many workers. By the end of the decade, mini-computers like the Series I had become a viable alternative to mainframes. As we moved into the 1990s, the increased capabilities of the hardware gave rise to more advanced software capabilities, particularly in the areas of business planning and inventory optimization. This created a general shift towards company-wide IT systems and the birth of Enterprise Resource Planning, or ERP.
Better business planning
More advanced computers meant more advanced number crunching, says Mark Cockings, senior vice president, sales and marketing, for IBS. They could handle much more complex algorithms and calculations, leading to more accurate business planning. This had a huge effect on businesses because they could look in much more detail at lead-times, stock holdings, life-cycle management and many other key supply chain issues. ERP systems helped this planning run right through an organization, from marketing all the way to production and delivery.
During the 90s, the tide of advancing hardware, followed by greater software functionality, led to business making more demands on technology. This came mainly in the shape of electronic trading. With systems being relied on to manage whole businesses, the need for more interaction between systems became very important, Cockings says. Software was being developed to be more open and integrated with other applications, not only within organizations, but also with external companies systems, such as EDI. This led to a host of benefits, including increased information integrity through reduced data entry and significantly faster and more accurate flow of data through disparate systems.
The skys the limit
By the mid-1990s, IT was firmly established as the key component in the efficient running of almost any business. The market was ready for something new that would take IT to the next level, pushing companies into a more global environment with virtually no limitations. The Internet delivered this dream and effectively moved IT from company-wide systems to a truly global supply chain environment.
The Internet gave business the opportunity to move to new and larger marketplaces with a relatively low level of investment, Cockings says. Previously, companies wanting to expand their markets had to put more salespeople on the road. Thanks to the Internet, this was no longer the case. Now the Internet drives almost everything that everybody does in their business and even personal life. Information is always available to anybody, anywhere, anytime. It would now be possible for an entire multinational organization to be run by a single person from a laptop while sunbathing in the Maldives.
Cockings points to the last 30 years as a time of massive shifts in the constraints on businesses. Companies are no longer constrained by the inadequacy of technology, he says. At some point during the 90s we reached equilibrium between business demands and technology provision. Now we are in a position where technology is ahead of business, and this puts employees in a very strong position. Now it is all about imagination and belief, and it is the forward-thinking companies that will continue to evolve, with the technology working itself around their dreams and ambitions.
The Growth of IT
Functional/Departmental IT systems
Company-wide IT systems
Integrated applications to manage complete business
Improved inventory control
Birth of the ERP system
Global IT systems
Massively increased business automation
Complete multinational supply chain solutions
Present to future
Limited only by imagination