The Changing Face of the Internet

The Changing Face of the Internet

By John Makulowich

As the Internet transitions from technological toy to productivity tool, key issues come into focus that affect end users ranging from students and teachers in their dorms and classrooms to executives and staff in corporate suites and at their desktops. Among them are knowledge management, the communications infrastructure and long-standing concerns about personal privacy.

For Ellen M. Knapp, among the first individuals in the world to hold the executive title of chief knowledge officer (April 1996), now vice chairman and CKO at Coopers & Lybrand LLP, New York, one of the major challenges of the Internet is plain and simple - information overload.

"But information overload is not just an Internet challenge. The Internet has exacerbated it. I mean information overload in a very broad sense, that is, the ability for members of organizations to get access to what they need when they need it," explains Knapp.

Focusing on the general area of knowledge management and productivity, she uses the example of electronic mail to highlight the tradeoffs involved in a resource like e-mail that demands a significant amount of time versus the value it yields for the effort expended by staff using it.

"It is not a question of disconnecting from e-mail. That would blunt your competitive edge. The point is to look carefully at the opportunity cost of using the tools of the Internet and to search for ways to work with other entrepreneurial firms that are beginning to come up with technical solutions," says Knapp.

She emphasizes that for professional service firms like Coopers & Lybrand, the value of assets is focused on client service. And those assets increase to the degree that staff become smarter and more knowledgeable about the activities going on in their client space. To do that requires tools that make researching and monitoring the competitive environment easier and more focused.

"There is a tremendous opportunity for businesses to interact with one another, to offer products and services, to exploit what I call the connected model of enterprise. Using the Internet, the most basic leverage point of this model is simple connectedness or communities of interest. From there you move to higher ground with electronic commerce. A third, more sophisticated level of connectedness is data mining and data warehousing," says Knapp.

She contends there is radically growing use of the connected model, with evidence in such practices as World Wide Web-based approaches to surveys of consumer wants. In fact, one of the key trends is the use of the network of networks to gather items of information that give companies like Coopers & Lybrand early awareness of patterns in consumer behavior, customer satisfaction or market demands.

One area that does need more attention, Knapp says, is accurate measurement in a variety of management policies and practices.

"What's not getting enough attention is the measurement of intellectual assets in organizations or benchmarking the pace of development, vis-a-vis the competition. We need more effective measures of the [return on investment] of the connected model, of the technology investments and the time that people spend using them. Now, the cost side is buried in the general category of business operations. It boils down to measuring the investments in knowledge management, of knowing whether the investments made are contributing to revenue, market share or reduced costs," says Knapp.

On another front, minding the technology store at the Federal Communications Commission as director for technology policy, is Michael R. Nelson. On the job just under a year, having joined the FCC's Office of Plans and Policy in January, he monitors issues affecting the development of the information highway, specifically network infrastructure, technology standards and the reliability and security of networks.

Commenting on the outlook for the Internet, Nelson notes, "The one thing we know for sure is that the growth and demand for Internet services will continue to grow. That includes not only getting online but doing more things once you're connected, like sending images, videoconferencing, buying and selling, getting training. For example, people now are spending hours online in fantasy games and this is demanding more bits than e-mail ever did. On the other hand, the average size of the typical e-mail message has quadrupled in the last year."

The point Nelson makes is that the number of people, the number of bits and the amount of time they spend is increasing dramatically, all driving demand for new Internet services. And this is where a disconnect enters the picture.

The people who work on the Internet are used to seeing the doubling effect over short periods of time, whether of traffic or users; the established telecommunications industry that has provided voice telephone for 60 years is used to markets that grow at only 5 to 10 percent per year. They simply are not used to the speed of change.

"As this Internet phenomena continues to develop, a paradigm shift is occurring. And telecommunications companies will have to shorten their planning horizons, move more quickly and be ready for big surprises," says Nelson.

He admits that among the most exciting developments is to see more than a dozen new technologies on the horizon, with the promise of more bandwidth to more people. Included in the array of novelty are ADSL (asymmetrical digital subscriber line), cable modems, wireless local loop and satellite systems. All of these technologies, he says, will be available in at most five years, so long as "regulations don't get in the way and we have real competition in the market."

Nelson's job is to help the FCC understand the technology and make sure there is no slowdown. The goal is to have as much competition in telecommunications as there has been in the computer industry over the last 30 years. With the new Telecommunications Act, there are not that many barriers to competition, says Nelson.

Among the challenges ahead as the different technologies converge - voice, video, data, cable TV and imagery - the biggest, according to Nelson, is to avoid attempts to impose a number of regulatory paradigms on this service.

"The Internet can look like broadcast TV and so people want to impose those requirements. It can also look like telephone service or cable TV. With the pressure to impose regulatory paradigms on the new media, this could effectively put the Internet under two or three paradigms and have it answer to two or three different sets of regulations," notes Nelson.

With the abundance of personal data accessible alongside the technology to bring it easily to the desktop, the potential impact of adverse regulation is not lost on the major trade associations, among them the Washington-based Information Industry Association. For IIA, the current hot button is individually identifiable information.

According to the IIA, the term covers "any information which can be used to identify a specific individual in particular by reference to an identification number or to one or more factors specific to his or her physical, physiological, mental, economic, cultural status or social affiliations."

The issue is so important that the IIA board will vote on it Dec. 16 as part of formally adopting a new Fair Information Practices Principles for its 550 members. The document, which revises a policy statement on privacy first issued in 1990 and approved in 1994, offers guidance to IIA's members on "the collection, use and dissemination of individually identifiable information."

The motivation for advancing the principles now, according to IIA President Ronald G. Dunn, is concern over "restrictive government regulations ... that IIA fears will severely limit ... their members' ability to collect and use individually identifiable information and thus adversely affect their businesses."

According to Dunn, these principles consider the new networked operating environment and recognize the breadth of issues and range of companies involved. "In 1994, when we approved the first principles, privacy issues affected very few companies. Now virtually all companies are affected," notes Dunn.

Dunn points to bills already introduced that would outlaw all use of Social Security numbers, for example, or ban any use of individually identifiable information without the individual's written permission. Such initiatives, he feels, fail to account for the social benefits of this information.

"Open access to data is an important factor in having made the United States a leader in information. It's critical for locating missing children and deadbeat parents, identifying criminals and verifying credit, tracking uninsured motorists and conducting employment background checks," says Dunn.

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