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5
Corporate Reinvention in the Information Age
In the last decade it has become axiomatic that no
corporation, no matter how large or how successful, is
immune from upheaval or failure. In 1969, the number
of Fortune 500 companies reporting losses was 11, in
1985 it was 70, and in 1994 it was 149 (Shapiro et al.,
1994~. In a similar vein, the fortunes of two-thirds of the
companies applauded in In Search of Excellence (Peters
and Waterman, 1982) have changed (The Economist,
19941. Many of these changes of corporate fortune have
been in large part attributable to the failure of those
organizations to assimilate new technologies effectively.
This chapter examines how information technology
can transform a business in terms of how the business is
done, its fundamental business processes, and how the
business seeks to differentiate itself from its competitors.
Based on lessons learned from such transformations in
the commercial world, the committee then explores the
implications for the Army.
INTRODUCTION
The initial focus of this chapter is on large-scale
corporate reinvention aided by information technology.
This focus provides an appropriate backdrop to the
committee's belief that the Army will need to undergo
large-scale reinvention to remain competitive with armies
that can design themselves with the newest information
technology or are less burdened by legacy systems and
embedded industrial age processes.
To set the stage for what follows, the characteristics
of reinvention, both as they apply in the corporate world
and as they could apply to the Army, are described
below. An overview is then provided for the remainder
of the chapter.
Reinvention
The characteristics of a reinvention process are (a) a
radical level of change in how the enterprise operates;
(b) starting anew; (c) a time frame of several years; (d)
broad, cross-functional scope; and (e) cultural and or-
ganizational change (Davenport, 19931. Reinvention can
68
be contrasted with continuous process improvement, in
which an existing process is gradually refined (e.g.,
stepped improvements in the 10 percent range). Unlike
continuous process improvement, reinvention aims for
several-fold improvements in organizational effective-
ness as measured by productivity, customer complaint
rates, rework, or combinations of these.
Reinvention is achieved by using radical business-
process reengineering. In the corporate world, most
radical reengineering projects were undertaken only
when competitors were at the gates.
Reinvention of the Army is seen by the committee as
also involving competitiveness, only here the competi-
tors are the U.S. Army vis-a-vis the armies of likely
opponents in warfare. However, unlike the corporate
world, the Army cannot assume a reactive position; it
must undertake planning and execution of a reinvention
strategy before being confronted by superior hostile
forces. The Gulf War experience may have some hum-
bling aspects that could be used internally to motivate
reinvention. At the same time, the evolving threats of the
post-Cold War era with their requirement of short notice,
rapid response to a variety of contingencies, suggest that
the Army must reinvent itself with a range of lethal foes
in mind. The Army's basic mission the reason for
being is to win the nation's wars. That will remain its
"raison d'etre," its "core business," but the Army's rein-
vention will surely change how it goes about accomplish-
ing its mission.
Chapter Overview
The chapter makes three main points regarding com-
. .
mercla. . experience:
1. The large infusion of information technology in
commercial businesses has greatly increased ca-
pabilities even though it has not as yet produced
the anticipated gains in productivity.
2. To be successful, technological introduction must
be accompanied by a change in the way work is
done.
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CORPORA 7E REINVENTION IN THE INFORMS TIONA GE
The chances of success for large-scale reengineer-
ing have so far proven to be small- roughly 25
percent. This dark side of reinvention exposes
several critical factors (e.g., the culture and organ-
izational structure must change to accommodate
technological change).
The chapter also presents three case studies to illus-
trate important lessons learned from the corporate world.
Finally, in light of the available data and accumulated
wisdom in corporate America, the chapter addresses
what can realistically be expected by the Army and in
what time frame.
THE PRODUCTIVITY PARADOX
Despite computer power doubling every 18 months,
whether this powerful technology has actually enhanced
productivity has been hotly debated. It has been cogently
argued that computers have had a negligible effect on
productivity (see, e.g., Roach, 1991, 1992, and Strass-
mann, 19901. To quote Lester Thurow of the Massachu-
setts Institute of Technology (Thurow, 19911:
Specific cases in which the new technologies have
permitted huge increases in output or decreases in
costs can be cited, but when it comes to the bottom
line there is no clear evidence that these new
technologies have raised productivity (the ultimate
determinant of our standard of life or profitability).
In fact, precisely the opposite is true. There is
evidence, in the United States at least, that the
investment in the new technologies has coincided
with lowered overall productivity and profitability.
A recent book provides a digest of all the available
cross-industry and cross-country productivity data (Lan-
dauer, 19951. Data show that computerization has had
large positive effects on manufacturing by introducing
computerized process control. Data also show that com-
puterization has led to substantial gains in telecommuni-
cations industry productivity that have been sustained
over a long period of time. However, for many industries,
the effects have been negligible.
While it has been difficult to document that investment
in information technology has improved important busi-
ness outcomes (Strassmann, 1990), there have been
69
.
improving coordination and synchronization of
work by better planning, monitoring, tracking, and
analysis;
· supporting products and services that depend on
powerful information processing; and
· allowing people to do information work more
efficiently.
Most of the successes are in the first category (e.g.,
reducing paper and data entry). Improved coordination
and synchronization have occurred in the airline industry
with route and schedule optimization and in overnight
freight (see the case of Federal Express described below).
Information retrieval systems such as Dialog are exam-
ples of the third category, and computer-aided-design
tools are an example of the fourth.
For some industries, such as the airline, financial, and
telecommunications industries, investment in information
technology and its applications has been viewed as an
ongoing part of the cost of doing business for a decade
or more (i.e., a necessary investment to improve or retain
competitiveness). In these industries, much of the invest-
ment to date has been in the communications and
data-handling infrastructure.
Well-known examples include airline reservation sys-
tems, the banking automatic-teller-machine network and
all wired financial trans-
actions,~ scanning sys-
tems for inventory in the
retail industry, and the
billing systems in the
telephone network.
Each of these mega-ap-
plications has changed
the way business proc-
esses are done and
would have been im-
possible without infor-
mation technology.
What characterizes
many of these success-
ful uses of technology
are large transaction vol-
umes with data that
change frequently. In all
of these cases the soft-
examples ot positive business effects. For example, there
are several ways that computers can be used to increase Banks process tens of billions of transactions a year. The rnterbank
productivity (Landauer, 1995~: Payments System handles approximately $2 trillion worth of transfers
per day. The automatic teller machine network consists of more than
75,000 automatic teller machines in the United States alone and handles
more than 6 billion transactions annually.
· reducing redundant work by electronic storage and
transport of information;
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Representative terms from entire chapter:
reengineering projects
70
COM~IERCIAl MULII~1EDJA TECHNOLOGIES FOR ~-FI~TC~YA~YBA ~7F! as
ware systems, not the hardware, have been the major
investment.
Thus, the business case supporting the application of
information technologies in industry, particularly service
industries, has been mixed. While for many industries
data supporting a return on investment in the form of
cost savings or customer satisfaction from the substantial
investments made in these technologies are disappoint-
ing, there are some major industries that have shown
positive retunes and have, in some cases, been substan-
tially changed by information technologies. Successes to
date have focused on data communications, data capture,
and transaction processing technologies.
Although the elect on productivity to date may have
been minimal in many industries, successful applications
of information technology have made more and better
inflation available, thus permitting improved planning
and application of resources with the result of greater
customer satisfaction. The implications for the Army can
be significant if the Anny employs information technology
for similar purposes. Providing more and better informa-
tion to those who need it when they need it and elimi-
nating repetitive, redundant tasks should lead to better
planning and the better application of combat power at
the right time and place. The result may well be that a
smaller, early-deploying force will have the capability to
handle the contingency crisis it has been deployed to
handle and to do so quickly with minimal losses.
SUCCESSFUL REINVENTIONS: CASE STUDIES
The current emphasis on reinvention and on business-
process reengineering, as exemplified in Reengineenng
the Corporation (Hammer and Champy, 1993), is attrib-
utable in large measure to the demonstrated success
enjoyed by businesses that have changed processes to
make best use of technology. To illustrate some lessons
reamed from successful reinvention, the committee con-
sidered three corporations that have reinvented them-
selves aided by information technology. Each offers
somewhat different insights and applicability to the Army.
Citicorp
Citicorp was a classic successful, large, insular com-
pany, which found itself in a time of rapid change when
the ability to ream, adapt, and move quickly was key to
survival. Banking had become highly competitive with
constant pressures to reduce costs and to innovate. Citi-
corp realized that it could not afford to do everything
intemally, that many things had to be outsourced, and
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CORPORA 7Z REINVENTION IN THE INFORMS HONE GE
Citicorp systematically measured the effects of its
business-process reengineering in its Real Estate Group.
As cited in Tapscott and Caston (1993), two years after
the business-process reengineering, the amount of time
to process loans had been reduced by about 50 percent,
profit center earnings had more than doubled, executive
time spent on "administrivia" had been reduced from 70
percent to 25 percent, and the number of customers per
account executive had gone up by 170 percent.
Federal Express
Federal Express is frequently cited as the premier
example of an integrated, enterprise-wide organization,
delivering 1.5 million packages a day with a goal of 100
percent timely and correct delivery. The Federal Express
network has 420 airplanes, 30,000 trucks, and almost
100,000 people working in synchrony. Innovative use of
information technology is the cornerstone of Federal
Express business (NRC, 19881.
By using real-time tracking and tracing systems net-
worked together, Federal Express "knows" where every
71
package is instantaneously. Barcodes on each of the 1.5
million packages are scanned an average of nine times.
Federal Express constantly runs software to determine if
shipments have gone astray and to try to correct the
problem before the customer is affected. The chief infor-
mation officer at Federal Express has stated, "We believe
that information is just as important as the shipment. It
provides a tremendous amount of product differentiation
and value added to our product" (Tapscott and Caston,
1993)
The Federal Express system, COSMOS, was first im-
plemented in 1977 and gained the functionality described
above by approximately 1988 (NRC, 1988~. During that
time Federal Express field-tested numerous custom-built
scanners, working with one vendor for 3 1/2 years to
develop a scanner that met all the business needs. With
the in-house expertise of dealing with a hardware vendor
in place, the next hardware scanner project was accom-
plished in 1 year. The current system COSMOS, II~
had its share of redirects and restarts, testing many
different versions of the scanner as well as different
networks and software, but it is considered to be a veIy
well-managed project. The evolution of the Federal
Express system is an excellent example of successful
spiral development.
Ford
In the early 1980s, Ford was losing market share to
the Europeans and.Tapanese in the automotive business.
In 1980, Ford lost $1.5 billion. It was clear that Ford's
basic survival was at stake, and the corporation under-
took to dramatically change the corporate culture and
business. That turnaround is usually attributed largely to
Total Quality Management rather than to technological
innovation as in the Federal Express story. However, the
problems Ford faced are pervasive in any old, large,
vertically integrated business, including the military.
Ford's biggest problem was that it was not producing
nearly as good a car as its competitors the same car
assembled in the United States was inferior to the one
assembled in Japan. Ford initiated a no-holds-barred
employee involvement program. Decisions on how to
improve production were pushed down to the rank-and-
file workers. Management levels were eliminated, and all
managers were trained in participatory management. By
constantly monitoring the product and the process and
keeping people involved as team members, Ford was
able to regain market share (Petersen and Hillkirk, 19911.
Initially, Ford changed the business by making incre-
mental changes—continuous quality improvements. Af-
ter a few years, the marginal effects of this more gradual
process became negligible. Improvements at the next
72
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stage required radical redesign of the basic business
processes, as illustrated by the overhaul of the procure-
ment process described below (Hammer and Champy,
1993~.
Ford's accounts payable department employed over
500 people in the early 19SOs. By straightforward com-
puter automation of their functions, Ford believed that a
20 percent personnel reduction could be achieved. On a
visit to Mazda, however, Ford executives found five
people doing the accounts payable function. This discov-
e~ prompted Ford to look beyond redesigning what the
accounts payable department did to redesigning the
entire procurement process. To quote Hammer and
Champy, "Define a reengineering effort in terms of an
organizational unit, and the effort is doomed."
In redesigning the process, the traditional three-part
invoice was eliminated. In its place was a much more
streamlined process: (1) Buyers enter a purchase order
electronically, which simultaneously goes to the vendor
and an internal database. (2) When the goods arrive at
the receiving department, receiving takes possession of
an order that is in the database and, upon accepting it,
causes a check to be issued and sent to the vendor. (3)
Orders not in the internal database are shipped back to
the vendor simple, efficient, and cheap. Now, routine
payments are a part of the process of receiving goods,
COMMERCIAL MULTIMEDIA SCHOOL OGRE FOR ~-FIR~ C~Y~YBA~I~S
and an accounts payable group consisting of only a few
people exists to handle exceptions.
THE DARK SIDE OF REINVENTION
There is a significant danger when writing about
corporate reinvention (also referred to in the literature as
reengineering) to highlight the success cases and down-
play the failures. But in fact there have been far more
abortive efforts than successes, with an estimated success
rate of only 25 percent (Landauer, 199~. The literature
quickly becomes redundant; the same examples are used
time and time again. An impression can be created that
reinvention is easy: obliterate and start over; a bit of
creative thinking will solve most business problems.
Instead, a successful reengineering project requires many
rare ingredients, a master chef, and some highly skilled
soul-chefs.
The next wave of popular-press books may proclaim
reengineering as practiced thus far to be the black plague
of corporate America. Corporate America has bought the
reengineering dream wholesale and downsized the work
force, banking on success. However, when reengineer-
ing projects are not successful, the results are: the requi-
site expertise to run the business is gone; the quality of
the product or service is undermined; and the business
begins a downward spiral. The Army cannot afford
similar results.
With this frequent failure in the forefront, the commit-
tee analyzed those factors that are critical to consider
when deciding whether or not to reengineer. These
factors are:
.
Radical reengineering requires careful scrutiny of
existing processes to identify those that must
change and to evaluate critically the probability of
success.
· Most successful efforts start from a small core and
build outward.
· Highly skilled managers and staff are needed to
implement most ambitious plans.
· Finally, the culture and organization must change
to accommodate technological change.
Each of these factors is discussed below.
Not Every Business Process Is a Candidate for
Reengineering
Decisions on whether or not to reengineer a process
or a system should be based on honest answers to some
hard questions: Does a significant cost reduction in this
CORPORA ~ RE:INVENTIONIIV THE INFORMS TIOIVA GE
process need to be achieved for the business's viability?
Does this process constitute a competitive niche or
market differentiator? For example, not all legacy systems
have to be replaced. In fact, analyses of some legacy
systems might reveal that the cost of replacement is more
than the expected gain. Not all business processes are of
equal importance. For most businesses, those processes
that are directly perceivable by the customer are the first
to scrutinize as reengineering candidates. Federal Ex-
press was missing critical deliveries (its core business)
and hence decided to redo its tracking system. Banks
have concentrated on customer services, such as making
automated teller machines available and easy to use (the
core business). Banks have outsourced back-room func-
tions that are not their core business (e.g., Banc One
hired an outside company for data processing and Citi-
corp formed an alliance with another company). The
cutting-edge technology should be applied in areas
where it is a market differentiator.
Start Small and Build from Success
It is tempting to move to a utopian mode when
undertaking reengineering (i.e., every process would be
better off being dismantled). However, to undertake
multiple projects simultaneously that are interdependent
in function and sequence is to court disaster. Most
reengineering depends on software being built, and it is
well known that large software projects are typically in
crisis mode. Undertaking multiple reengineering projects
invites all the unsolved problems of software engineering
in the large; coordination and information-sharing diffi-
culties increase with the square of the number of people
and software interfaces that need to be maintained. Small
is beautiful in software and so too in reengineering. Most
reengineering projects that succeed follow iterative soft-
ware engineering methods. They start with a core func-
tionality, refine it, and build outward in quick design and
implementation intervals. The benefits of iterative design
cannot be overestimated, and it becomes more important
as the complexity of what is to be implemented increases.
Landauer (1995) documents the benefits derived from
iterative methods with actual project data. One such
iterative method, a thorough round of evaluation and
redesign known as User Centered Design, resulted in
improvements per design cycle of as much as 720
percent. As a rule of thumb, each design cycle is likely
to improve performance, as measured for a particular
application, by about 50 percent.
Inexperienced Staff and Managers Need Not Apply
Many reengineering projects fail because they are
staffed with people having inappropriate skills. In the
experience of the committee, one needs extremely tal-
ented software engineers who can design and implement
quickly and effectively. The best programmers are 20
times more productive than average ones (Egan, 1988
and Pressman, 19949. However, these experts need to be
supported by people who understand the systems they
are replacing and who understand the business needs. A
team composed solely of software experts will fail, as
will a team composed only of people who wrote and
maintained the systems that are being replaced. There
needs to be a working partnership with roles and respon-
sibilities strongly defined and enforced. In point of fact,
there are too few software engineers who have com-
pleted successful reengineering projects; there are even
fewer managers who are current with the technology,
understand the business needs, and have actually expe-
rienced reengineering successes. In terms of the rare
ingredients, the most important one is having the critical
skill sets in terms of the people doing the reengineering:
subject matter experts familiar with the domain; software
engineers with domain expertise and a reengineering
success, if possible; and technically skilled managers who
are current with the technology to be used and have
managed a previous reengineering project.
Cultural Changes anti Support for the Change
Davenport (1993) points out that information technol-
ogy can only enable; to be successful it must be accom-
panied by organizational change. To benefit from new
technology, the nature of the work to be done must
change as well.
Dependencies similar to the interrelation between
process innovation and technological innovation exist
with cultural change; social and technical change must
go hand-in-hand. Many a reinvention attempt has failed
because the existing corporate culture was not ready for
the change or because no one understood just how much
the culture would have to be changed to accommodate
reinvention. Davenport (1993) discusses cultural enablers
of radical corporate innovation: (a) empowered employ-
ees, (b) active participation of employees in decision
making, (c) open communication channels, and (d) flatter
hierarchical structure. So, as the list implies, a receptive
culture is one in which communication across functions
and between levels is welcomed and is active, dynamic,
and participatory. Unfortunately, most corporate cultures
are characterized more by their rigidity and inability to
change, and this makes radical innovation nearly impos-
sible. Davenport (1993) has observed that the most
difficult task many corporations face in radical redesign
is getting the senior executives to act as a team. In many
organizations, senior executives control fiefdoms with
74
CO~IMERCIAI~ MULTIMEDIA TECHNOtOGI~ FOR -FIRST CE~YA~YBA BRIMS
little desire or need to communicate, let alone cooperate
across functional lines. However, the result of a success-
ful reinvention is massive organizational rearrangement,
frequently combining once-separate functional entities as
well as overall streamlining. So, when turf retention is an
issue, executives may consciously or subconsciously
undermine a reinvention effort.
To reinvent basic processes using information tech-
nology, the nature of the jobs performed must change.
This change is very threatening to those employees
currently doing the old jobs, and those employees may
be a source of sabotage. Very often the new plan calls
for new employees, since the embedded base of employ-
ees does not have the right skill set. Thus, the new agenda
is in direct conflict with what the employees perceive to
be their best interests, and so a battle of organizational
survival versus employee survival can ensue.
Somewhat related to the above issue is the question
Who is going to implement or build the new design?
Hammer and Champy (1993) as well as Davenport (1993)
stress that bottom-up reengineering does not work. How-
ever, there have been instances in which a top-level
design and initial implementation has been done but then
was severely compromised because the wrong imple-
mentation team was selected. In a particular case, the
reengineered design called for looking at products the
business sold in a fundamentally different way from the
way the business currently operated. However, the im-
plementers were so involved in the old way of thinking
that at every turn in implementation the design was
compromised, thereby systematically reintroducing con-
cepts that had been killed in the radical redesign. Further,
these design compromises were made unwittingly; the
familiar way simply made more sense to these people.
Change requires champions, and not just a single
champion. Given the rate of job changes in the average
business and the duration of most reinventions (2-3
years), it is likely that a single champion will have come
and gone in that time. Also, social acceptance of new
ideas requires multiple committed spokespersons and
corporate "movers and shakers."
IMPLICATIONS FOR THE ARMY
This section contains the committee's views on how
to apply some of the above lessons learned in the
commercial sector to the Army. It has been written from
the perspective of information technology and is not
meant to suggest an overarching roadmap for reform of
the Army as an institution.
The following sections focus on (a) what has been
learned in commercial experiences with reengineering
that is relevant to digitizing the battlefield and (b) an
overview of the effects reengineering is likely to have on
the Army.
Digitizing the Battlefield
The problem of displaying the relevant command and
control information in a way that is highly usable to each
soldier and commander on the battlefield needs to be
solved using iterative methods. The questions What is
information in this context? and How easy is it to make
the correct interpretation? are interface and usability
issues that can only be resolved by putting the technology
in the hands of the users and iteratively refining the
design. This is an opportunity for multimedia to impact
battlefield events favorably, if used effectively, but it is
an invitation for disaster if done poorly.
In terms of overall cost, a rule of thumb is that the
system software costs at least three times as much as the
hardware. Given the inherent complexity in the Army
applications, it is all the more important to use iterative
software design and development methods rather than
counting on one giant leap forward. In addition, the
success rate for large software systems and reengineering
projects (one in four succeeds) is low, implying that the
Army cannot afford to use less than the best practices
and methods in systems development.
Effects of Reinvention on the Army
It is obvious that information technology resides at the
heart of the vision for the Army of the future. What is less
obvious is how information technology will transform
warfare and how the Army must transform itself to best
benefit from technology. This chapter has stressed that it
is wrong to believe that just the technology changes. To
effectively use technology means that the work, the
organization, its doctrine, and the culture all must
change. Moreover, because the Army's vision of the
future relies on the massive infusion of technology for
acquiring, processing, and communicating information
technology that will change the organization and how it
functions—one cannot comprehend as yet what the
future Army will be like organizationally or how its battles
will be fought.
Processes and work flow in unit staffs will change.
Simply automating current procedures will not leverage
the full potential of information technology. If staffs are
not reduced, automation may have a negative impact as
large staffs find more time and automated capabilities to
demand more information from subordinate organiza-
CORPORA 7F REINVENTIONIIV THEINFORMATIONA GE
lions. The Army will have to analyze the role of staffs in
the information age and the functions they perform. That
they can be smaller is certain, but they are also likely to
be restructured.
The committee's review of corporate success stories
also indicates that it will be possible to eliminate one or
more levels of command. As commanders, supported by
smaller staffs, are able to command and control more
subordinate units effectively, organizational structures
can evolve into flatter, more integrated, and less vertical
entities. The Army will have to review the purpose served
by each level of command and the value added to the
overall success of the enterprise. Corporate experience
indicates that failure to eliminate intervening levels is a
mistake. Often, levels between the decision maker and
the executor of a function become redundant and an
impediment to efficient operations.
Operations can take place faster and be synchronized
over a wide area with the application of advanced
information technologies. The implications for Army
doctrine and tactics are likely to be extensive. Units will
be able to move rapidly, operate with greater certainty,
and make more rapid decisions. Exactly how the tactics
will be affected may not yet be evident, but corporate
experience again makes it clear that those who fail to
assess the fundamental ways an enterprise conducts its
business and to adjust to new ways will not leverage the
advantages of information technologies and are likely to
lose their competitive advantage.
Extrapolating from the success stories in the corporate
world leads to the recommendation that iteration and
experimentation be built into the process from the be-
ginning. It is beyond the limits of human intellect to come
up with the grand master plan that will effectively
transform the current Army into the future, information-
based Army. Success is made with plans of limited scope
that are intended to be built, tested, redesigned, and
expanded. At the core of effective use of information
technology are iterative design methods, which were best
exemplified by the Federal Express story. Despite 20
years of crisis and large-scale failures in the software
industry, there is just beginning to be an understanding
that requirements are always incomplete, that the first
implementations are always flawed, and that reducing
development time in software must translate into short-
ening the time through successive cycles of design,
implementation, and evaluation.
Fortunately, the Army has a leg up on many of its
industrial counterparts in experimentation, as it has a rich
tradition of using modeling and simulation to aid decision
making. These same technologies can be used to reduce
the risks of reengineering. For example, the Air Force
plans to use simulation, modeling, and work flow com-
puter tools to enable decision makers to better predict
the impacts of incremental-to-radical changes in business
processes (USAF, 19951.
Given the risks and uncertainty inherent in reengineer-
ing, it is very important to identify processes that are key
to success and to benchmark them formally against
external corporations or institutions. To do this effectively
requires a critical examination of the internal operations
together with an assessment of the outside competition
or industry leaders in a particular area of interest. After
unearthing best practices, the organization must figure
out how to assimilate these into its operation. Formal
benchmarking is a disciplined process of uncovering and
measuring effects of adopting best practices.
Done correctly, digitizing the battlefield is a complex
systems integration job, which will need much experi-
mentation and refinement. Thus, the role of the Battle
Labs will become even more critical and will probably
expand in coming years as a means of quickly evaluating
new technology and introducing it into the evolving
systems. In addition, realistic field testing of the complete
system at frequent intervals, through exercises such as
the Louisiana Maneuvers and warfighting experiments,
will be essential to not only see that the technology works
but to understand how the work must change to use the
technology. Much of the active interplay between tech-
nology and work must be seen and experienced in order
to know how to modify each component. These are
difficult things to visualize.
Another important aspect of active experimentation is
to find out just how usable and useful the information
technology is. The lesson over the past few decades is
that it has been tremendously difficult to invent software
that improved end-user productivity. In a battle situation
in which stress, fatigue, and attention overload operate,
it is more important, yet more difficult, to build usable
systems. Unfortunately, there are few principles to guide
correct design. The state-of-the-art is to do usability
evaluations in multiple phases of development and in
each product or system release.
The recommendation to use open systems and com-
ponents, which plug and play, has been made several
times in this report. There are large gains to be made in
such areas as development time evolving to new systems
and levels of expertise needed to accomplish specific
tasks. Again, the use of open systems and components
are examples of how iterative reengineering can be
accomplished.
Perhaps the biggest unknown is how the Army will
look and feel as an organization in the t~venty-first
century. In the successfully reengineered businesses,
there were fewer people running the business and more
integrated organizations (e.g., fewer vertically integrated
functional entities). More of the workers became gener-
alists, but in many cases the jobs demanded more
76
COMMERCIAL MULTIMEDIA TECHNOLOGIES FOR TWEN7-y-FIRsT cE~7~URyARMyBA=LEFIFrr)s
education and training than previously. The Army may
find that a new kind of warfare demands more techno-
logically sophisticated enlisted and officer personnel and
that the current skill inventories are underrepresented in
disciplines that support computer applications and com-
munications technology.
If the cultural enablers of reinvention are the same as
in corporate America, the committee speculates that the
cultural transformations that need to occur will be the
Army's biggest hurdle. Warfare is not management by
consensus. Hierarchies exist for the efficient flow and
control of information. People need to expedite orders.
Much of the organizational rigidity of the Army is there
for good reasons in times of conflict and confusion,
what to do and to whom to listen need to be reflexive.
How to overlay this on a culture that needs to have more
open involvement, discussion, and evaluation of new
ways of working will require that people understand that
they have contradictory roles depending on the context.
The committee does not expect the Army to abandon
completely its chain of command orientation, but it does
expect that the Army will need to accommodate a more
empowered soldier and subordinate leader if information
technology is to give the Army a competitive edge.
Cultural change also is likely to be resisted by senior
executives, officers, and employees who, like their civil-
ian counterparts, feel threatened by loss of turf or posi-
tion. As has been noted many times in this report, to
achieve the full potential that information technology
offers, there must be fundamental changes in how the
Army is organized and operates. Organizational changes,
functional changes, and changes in work processes
ultimately will affect the Army's basic branches, its senior
commands, and its staff relationships. The natural incli-
nation of those affected will be to resist changes that
diminish the role, importance, or size of these entities. If
the Army's efforts to reinvent itself for twenty-first century
warfare—enbodied in Force XXI are to be successful,
the senior leadership of the Army must overcome the
resistance that is almost certain to arise. Corporate expe-
rience makes it clear that this requires their personal and
continuous involvement, including the "CEO," working
collectively as a team.
SUMMARY
While overall there has been an apparent productivity
paradox associated with the introduction of information
technology, there have been successes as well. For
example, information technology has made possible the
coordination and synchronization of complex events,
such as airline reservation systems.
Successful corporate change seldom results from tech-
nology alone; the business processes and the structure
of the organization usually change as well.
Three successful corporate reinvention cases consid-
ered relevant to the Army were discussed. These cases
involved the use of information technology at Citicorp,
Federal Express, and Ford. Key lessons learned included
the need to outsource noncore business functions, use
spiral development, and flatten management hierarchy
for efficiency. Corresponding Army correlates were: use
commercial off-the-shelf (COTS) technology, except in
carefully targeted areas; experiment (e.g., via simulation);
and reexamine the Army's command and control hierar-
chy, with an eye toward opportunities for substantial
streamlining and changes in functions.
Only about one in four reengineering projects suc-
ceeds. Among the many ways they fail are: (a) reengi-
neering processes or business functions that are better
left alone, (b) not starting small and building from
success, (c) not having the critical skill sets available, and
(d) not being able to change the culture to accommodate
reengineering.
Implications for the Army, based on lessons learned,
were then discussed more generally, beyond the Army
correlates to the lessons learned in the case studies. These
included possible changes in organization, doctrine, and
tactics as well as the need to actively experiment and
iteratively design and develop. No one has the blueprint
for warfare in the twenty-first century it must evolve.
Not only is the technological end state unknowable at
this time, but the cultural changes that will ensue are
equally difficult to predict and will result from the
interplay of the work, the technology, and the social
structure.
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