New technology and money.

Paperwork and the Digital Nervous System

Bill Gates states it did not take Microsoft Co. long to get rid of most of the company's paper forms. The move from paper to elec­tronic forms is a vitalstep in the evolution of a modern organiza­tion's nervous system. A corporatesystem defines how an organization deals with planned and unplanned events alike. It in­cludes meetings, paperwork and electronic systems. It governs the way information about customers is stored, the way workers are or­ganized, the way budgets are compiledand activities are coordi­nated, and the way information is exchanged.

In the past, companies were virtually alike in terms of how they managed these activities. Meetings, memosand managers were re­lied upon heavily. The pacewas not usually too fast, and there was lots of paper.

But one of the lessons from Darwin is that the excellence of an organism's nervous system helps determine its ability to sense change and quickly respond,thereby surviving or even thriving.

Today, new «digital nervous systems» are based on electronic communications tools that help corporations maintain themselves, defend from dangers and take advantage of opportunities rapidly. The Internet and intranetsare essential.

You can easily bring the people you need together electroni­cally, even if they are all over the globe. The people in the company can gain a common understanding of what is going on. They can exchange ideas easily.

Perhaps the single most important element of a digital nervous system is a customer database. Having all your information about customers in one place gives you the tools to analyze and make de­cisions. It empowersyou to be highly responsive to customers needs.

Microsoft's system is far from perfect, but it improves as the company takes better advantage of technology. Its annual budget­ing process used to take three months. Microsoft invented a new process around electronic forms on the company's intranet.

The budget cycle is now a very tense three-week period. The company's digital system lets everybody see immediately what the other people in the company are planning. The managers see com­parisons of sales and expense forecasts relative to market size in other divisions and regions. The product groups see the numbers organized by product. The subsidiaries see the numbers geographi­cally. The finance people see them in on a profit-and-loss basis.

In other words, information can automatically be analyzed and compared and summarized and brought to the attention of the peo­ple who need to know about it.

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