Communications revolution: prepare your firm now for the sea of changes under way in the technology for managing information - includes related articles - Cover Story

Nation's Business, May, 1993 by Ripley Hotch

Information channels make up the nerve system of business. The better information flows, the better a business of any size can compete. New technologies and new uses for old ones have transformed the marketplace in the past few years--think of the now-ubiquitous fax machine, the data modem, the networked personal computer, the cellular telephone.

The next generations of technology will make current telecommunications look as awkward as the crank telephone of 1910. They will come by fits and starts, but they will transform the way business is done as surely as the telephone itself has. And, ultimately, they will enable businesses to operate more efficiently and profitably.

Up to now, the kind of information transmitted required particular devices for that kind of information. Voice messages go by analog signal over copper wires to telephones. Television and radio signals are broadcast via air or cable to sets in homes--not to telephones. Radio waves are picked up by radios, television signals by televisions. Computers receive data by disk or by telephone and radio modem--waiting in line like any other traffic on the shared lines.

All of that will change. Digitizing information, which will become the standard way information is converted for the purpose of transmission, means that anything can be delivered to any instrument capable of displaying it.

When information is digitized, any device can become a "receiver" for it, as long as it is capable of the appropriate display: A TV can receive and display computer text, a radio can receive a phone call, and so on. The telephone or cable wire or the wireless radio or microwave frequencies can carry any of it equally. Or it can be sent over any combination of carriers.

Most telecommunications observers envision a worldwide linking of information networks. New devices, called personal communicators or personal digital assistants, will be able to tap into those networks anywhere in the world. They will recognize your handwriting, send and receive faxes, and even include a telephone. The telephone will become smaller and more powerful, and its functions will begin to merge with the computer's.

Television will become interactive, a window into all that has ever been written, painted, or filmed, anytime you want it. Business presentations written on computers, including multimedia presentations, will be sent to television sets by way of phone lines, broadcast spectrum, or cable. Other people will be able to interrupt the presentation and comment on it--even insert alterations if you want them to--by using a telephone and a video camera. Early versions of many of these services already are being marketed.

The big telecornmunications companies have learned--and openly say--that their growth will be in serving small, midsize, and entrepreneurial companies. They are offering services that make the small office as connected with information and customers as any big company.

What might that mean for small business in the future? Suppose you have an appliance-repair company. Instead of having to guess about what parts to carry on your truck, you can have the homeowner plug the telephone line directly into a faulty stove, for example, so your office computer can analyze the appliance's problem, check your inventory or your supplier's for a replacement part, and schedule a service call (see the illustration).

Many new communications technologies use wireless radio frequencies to collect digital information, and these will grow exponentially. For example, to check and verify credit-card transactions, you now have to attach a credit-card terminal to a telephone wire. With a wireless terminal, however, a delivery person can verify a credit-card charge at your customer's house.

"I think wireless communications is probably the last communications breakthrough in our lifetimes," says Kenneth S. Forbes III, who is president and CEO of MobileDigital Corp., in Alameda, Calif. "The ability to reach anyone while I'm mobile in real time without it being intrusive is the closest to thought projection we're going to get."

Simple hand-held electronic note pads can already send messages directly to any employee in the field. More-complex devices include the EO Personal Communicator, a notebook computer with a cellular phone that EO, Inc., plans to market later this year. It will be able to use wireless networks such as Ardis, SkyTel, or RAM Data to tap into company databases and to carry phone calls at the same time.

Through interactive television-- whether accessed by cable or through radio waves-customers will be able to order products or services on demand. After making the order, the customer can, on the screen or using a pen-based note-pad computer, fill out and sign an electronic check. The bank's computer will recognize the signature, approve the transaction, and credit the vendor's account, all in a few moments.

The details of the transaction can be stored in a computer database. Software programs could create profiles of customers' interests and preferences-and probable preferences. Later, businesses could tap into that customer information so precisely that marketing would no longer be niche marketing but individual marketing--anywhere in the world.