THE DIGITAL CIVILIZATION

I had a recent experience that confirms the significance of "consumer cartels" as described by Nicholas Negroponte [The Digital Civilization, Summer 1998]. At Congressional Information Service, a subsidiary of Lexis-Nexis, we recently signed a national agreement with a "mega-consortium" of more than 800 colleges and universities to bring a Web-based information service to nearly five million college students. The colleges received a valuable service for less than $1.52 per student per year, with unlimited use. We received a single contract worth more than $4 million annually, for which we send out a single invoice.

The Web makes practical the intensive information sharing that is so important to such complex deals. We thought it would take two to three years for a single "mega-consortium" to coalesce. We wrong—it took two to three weeks.

My conclusion? Those willing to offer excellent value will find an intelligent, organized, responsive, and large audience on the Web.

—Mark L. Capaldini
President and Chief Executive Officer
Congressional Information Service


HIDING BEHIND YOUR CUSTOMERS

As a company that deals exclusively with developing countries overseas, we use rapidly changing technology on a daily basis. Our company consults and supplies equipment to educational projects in locations that are not known for being technologically advanced; I can still remember when we were considered innovative because we had a telex machine with a punch tape.

With the advent of the Internet, e-mail, and electronic file transfer, suddenly our international proposals are being delivered electronically instead of being carried on an airplane in someone's briefcase. Our telecommunications costs have been cut in half because we no longer need to rely on fax transmission. A few potential clients are now even going on the Web to locate sample specifications and recommended equipment lists.

We are always struggling with whether it is worth the investment to update our hardware and software one more time. Should we stay with the proprietary software program that fits our business, or should we change to a more open system that would be available to our clients and representatives in other countries but that won't do everything we need?

We had delayed investment in open systems many times using the argument that many of our potential clients in developing nations do not yet have access to technologies like the Internet, so why invest now? Your article "Hiding Behind Your Customers" [The Great Lie, Summer 1998] opened my eyes to the trap we had laid for ourselves. As a result, we are rethinking our strategy—and changing our assumptions about the opportunities and threats presented by technology.

—Barbara Turner
Executive Vice President
Edusystems


GETTING STARTED

Timothy J. Rohner's observations [CEO User's Guide, Summer 1998] are on target. If companies continue to view capital investments in the traditional fashion, they are more likely to fail than succeed.

We may all need to think more like venture capitalists, accepting a higher risk of failure in exchange for much higher returns on our successes. The new business model would still require careful screening and rigorous due diligence but would also recognize that some portfolio investments will never have a payback.

In the future, long-term strategy will still be very critical, although long term may mean the time between coffee breaks, and strategy will emphasize leapfrogging yesterday's breakthrough today.

—James Fox
Chief Operating Officer
First Data Investor Services Group


MULTITASKING MADNESS

A senior newspaper executive once told me that any time anyone mentions the word "bandwidth," her eyes glaze over. This was before e-mail, or even much voice mail. It was a time when executives could protect themselves by hiring people who acted as a buffer between them and the people or things that demanded their time and attention. The people who now follow the newspaper executive in her company have no such protection; their world is without most buffers.

Newspaper people (and others in the media) like to think of themselves as having been able to manage multitasking for a long time. The caricature of the reporter with a notebook in hand, phone at the ear, typing away on a manual typewriter (and now probably listening to a second phone and using a couple of computers), is a picture that is easy to imagine.

But we are different from computers. And we need to spend time reasserting that computers work for us, not the other way around.

The solutions to Multitasking Madness that Larry Rosen and Michelle Weil propose [Inner Game of Work, Fall 1998] are more important than ever! But less important than they will continue to become.

—Terry Maguire
Principal
International Media Development & Counsel


EATING YOUR YOUNG

I've seen a company take actions similar to the ones Charles Schwab took in creating its on-line trading unit [Eating Your Young, Summer 1998]. The company I am part of, MedStep, was formed by our parent, Humana—a super-regional, managed-care organization—for much the same reason.

We knew that the Balanced Budget Act was going to allow for the creation of new entities—provider sponsored organizations—that could compete with Humana. But, rather than seeing this as a threat, we chose to see it as an opportunity. We formed our company to take advantage of this opportunity.

Even though MedStep, which helps run PSOs, may compete with Humana in some geographic markets, operating the company has allowed us to capture business in other locations that we were not in before. Our attitude from the beginning was that if we didn't do it, someone else would—much the same as with Charles Schwab.

—Mark Owen
Vice President, Sales and Marketing
MedStep


VIRTUAL HORIZONS

Resource management? Saving on operating costs by using software that manages the purchasing process? HA!

You've got to be kidding me. The example cited [Digital Dispatches, Fall 1998] for managing operation resources is absurd. [According to Killen & Associates, a firm can save 5% of its operating resource costs and increase profits by 28%.]

Let's say you are paying an employee $50,000 a year in salary, benefits, and other costs. That means the employee is costing you about 40 cents a minute, based on a 2,080 hour work year.

If, for example, it takes 10 seconds to launch an Internet browser, 10 seconds to navigate to a particular notebook, and 90 seconds to fill out the requisition form, you've just added 110 seconds (or about 73 cents) to the cost of the $1 notebook.

Of course, this doesn't include the time the employee spends waiting for the requisition to be approved, the cost of training the employee to use the requisition system, or the depreciation for the cost of the computer software and hardware.

I'll make you a deal. You give me the $350,000 cost of the software, and I'll spring for keys for all your employees to the supply cabinet. We both come out ahead.

—Chris Curvey