Transforming the product
Most products have always had both a physical and an information component. The latter, broadly defined, is everything that the buyer needs to know to obtain the product and use it to achieve the desired result. That is, a product includes information about its characteristics and how it should be used and supported. For example, convenient, accessible information on maintenance and service procedures is an important buyer criterion in consumer appliances.
Historically, a product’s physical component has been more important than its information component. The new technology, however, makes it feasible to supply far more information along with the physical product. For example, General Electric’s appliance service data base supports a consumer hotline that helps differentiate GE’s service support from its rivals’. Similarly, some railroad and trucking companies offer up-to-the-minute information on the whereabouts of shippers’ freight, which improves coordination between shippers and the railroad. The new technology is also making it increasingly possible to offer products with no physical component at all. Compustat’s customers have access to corporate financial data filed with the Securities and Exchange Commission, and many companies have sprung up to perform energy use analyses of buildings.
Many products also process information in their normal functioning. A dishwasher, for example, requires a control system that directs the various components of the unit through the washing cycle and displays the process to the user. The new information technology is enhancing product performance and is making it easier to boost a product’s information content. Electronic control of the automobile, for example, is becoming more visible in dashboard displays, talking dashboards, diagnostic messages, and the like.
There is an unmistakable trend toward expanding the information content in products. This component, combined with changes in companies’ value chains, underscores the increasingly strategic role of information technology. There are no longer mature industries; rather, there are mature ways of doing business.
Transforming the product
Most products have always had both a physical and an information component. The latter, broadly defined, is everything that the buyer needs to know to obtain the product and use it to achieve the desired result. That is, a product includes information about its characteristics and how it should be used and supported. For example, convenient, accessible information on maintenance and service procedures is an important buyer criterion in consumer appliances.
Historically, a product’s physical component has been more important than its information component. The new technology, however, makes it feasible to supply far more information along with the physical product. For example, General Electric’s appliance service data base supports a consumer hotline that helps differentiate GE’s service support from its rivals’. Similarly, some railroad and trucking companies offer up-to-the-minute information on the whereabouts of shippers’ freight, which improves coordination between shippers and the railroad. The new technology is also making it increasingly possible to offer products with no physical component at all. Compustat’s customers have access to corporate financial data filed with the Securities and Exchange Commission, and many companies have sprung up to perform energy use analyses of buildings.
Many products also process information in their normal functioning. A dishwasher, for example, requires a control system that directs the various components of the unit through the washing cycle and displays the process to the user. The new information technology is enhancing product performance and is making it easier to boost a product’s information content. Electronic control of the automobile, for example, is becoming more visible in dashboard displays, talking dashboards, diagnostic messages, and the like.
There is an unmistakable trend toward expanding the information content in products. This component, combined with changes in companies’ value chains, underscores the increasingly strategic role of information technology. There are no longer mature industries; rather, there are mature ways of doing business.
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