This technological transformation is expanding the limits of what companies can do faster than managers can explore the opportunities. The information revolution affects all nine categories of value activity, from allowing computer-aided design in technology development to incorporating automation in warehouses (see Exhibit III). The new technology substitutes machines for human effort in information processing. Paper ledgers and rules of thumb have given way to computers.
Initially, companies used information technology mainly for accounting and record-keeping functions. In these applications, the computers automated repetitive clerical functions such as order processing. Today information technology is spreading throughout the value chain and is performing optimization and control functions as well as more judgmental executive functions. General Electric, for instance, uses a data base that includes the accumulated experience and (often intuitive) knowledge of its appliance service engineers to provide support to customers by phone.