Doing Business in an Age of Electronic Miracles and Wonder

Wriston, Walter B.

2007

Convergence of Services

Since one of the basic laws of technology is the law of convergence, it comes as no surprise that electronic systems tend to move many once-disparate businesses closer together. Indeed, many different types of service may now be delivered over the same computer terminal.

As services proliferate, new competitors appear. Company executives who focus their attention on traditional old competitors may well overlook, or fail to recognize, formidable new entrants in their market.

It follows from this that in today's world, the executive who limits his or her information to narrow areas may wake up too late to save the business. Examples abound. Since all good businesses are customer driven, it should be clear that businesses that are in direct touch with consumers, whether at the check-out counter of a retailer or on an airline reservation system, have a comparative advantage over those that are not.

It was not hard ten years ago to predict that retailers would become effective competitors of banks in the 1970s and 1980s, yet many bankers refused even to consider this possibility. Today this once heretical view is conventional wisdom, but in the meantime, many banks have lost market share to companies they did not believe were their competitors.

As marketing becomes more sophisticated, we are learning that there are all kinds of shares, from share of market to share of mind. Today, there may well be a new measure: share of desk. The placing of your terminal on a customer's desk alters the competitive business balance whether that terminal delivers electronic information about the world markets, a letter of credit, or helps a drugstore keep track of inventory.

A terminal helps tie a customer to a single supplier to the obvious detriment of other suppliers. It is a short step from using a retailer's electronic telecommunication system for store inventory control to starting a travel service, an airline reservation system, or credit card processing for a chain of gas stations.

All of this argues for the widest possible focus on the information a modern executive needs. Most management information systems that exist today are too narrowly focused on one's own company. They are good for measuring a steady state of business, but often fail to tell us what we need to know to survive and prosper in rapidly changing markets.

The variables your system throws up may not be the variables that are important in changing markets, and, indeed, may even limit what you know. Jack Kilby who, along with Robert Noyce, has been credited with inventing the integrated circuit is quoted by T.R. Reid as saying: "At first, the problem solver has to look things over with a wide-angle, lens, hunting down every fact that might conceivably be related to some kind of solution. This involves extensive reading, including all the obvious technical literature but also a broad range of other publications - books, broadsides, newspapers, magazines, speeches, catalogs, whatever happens in view."

All of this should make it clear that internal MIS systems must be integrated with external market data if they are to be really useful in a rapidly changing environment. Trying to keep track of who your competitors are is almost a full-time job, but tracking not only what they are doing but what they are likely to do is becoming critical.

 
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  • This document was created from the article, "Doing Business in an Age of Electronic Miracles and Wonder," written by Walter B. Wriston for the June 22, 1987 edition of "American Banker." The original article is located in MS134.003.027.00002.
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