The true digital transformation: from the 70s to today

digital transformation from 70s to today

How the first generation that can’t do anything without a computer completely changed the way we work. And why this technological revolution was completely different from the previous ones. It is worth studying it since both things contain the keys to the digital transformation in which we are immersed.

If you are between 40 and 50 years old, your first job looked like this:

He entered a working world where it was assumed that a personal computer was going to be his basic work tool. To me 25 years ago, such a thing seemed natural. He had done lots of computer practice in college and had a brand new 386 at home, which I did my Final Year Project. It was my parents who made me see that having a computer was something exceptional. The first generation of “white-collar workers” in my family spent almost their entire professional life with a job like the one we see below.

The PC made a great computing and information processing capacity available to everyone, something that we lacked before. And that computing capacity was also accompanied by the possibility of connecting with countless computers and information sources.

The PC’s CPU, with the help of different types of programs, now allowed Megabytes of information to be assimilated and processed. We could explore files, crosstables, view information, and even build small databases.

On the other hand, email and Internet access exponentially multiplied the amount of information we could obtain and exchange. Information, freed from the physical support of paper, reached us in great quantity. And we could assimilate it because we had computational capacity and tools with which to order and study it.

If we want to talk about digital transformation, we should reflect on what we ourselves have carried out, without realizing it. The PC brought us the “ democratization ” of access to information processing capabilities. But to understand its impact we must go back much earlier, and reflect on the successive changes that information technologies introduced in companies and organizations.

Information technologies in companies and organizations

Every human organization provides services through the transformation of physical or intangible goods. Managing information is essential for any activity, even if it is only for inventory and workflow management. The spectacular development of the 20th-century economy would have been impossible without the technologies that facilitated the processing, storage, and distribution of information on a massive scale.

In a very schematic way, we can distinguish 4 major stages in the evolution of information technology in companies. Each has encompassed an increasing number of machines and processes and has led to the automation of increasingly specialized and diverse activities.

Let’s see a little better what those 4 eras have consisted of:

1st era: the mainframe

Think back to the 1950s and 1960s and those first computers that filled entire rooms, and were barely understood by a handful of people who were experts in their use.

We are talking about a time when computers were almost a craft product, extremely expensive. Only large companies could afford such an investment. In these first computers, the programming was closely linked to the Hardware itself and, practically, they had to be manufactured ad-hoc for each client. These machines incorporated the most basic and essential operations of the company and gave rise to a notable increase in production capacity.

2nd era: Unix machines arrive

It was clear that companies needed ever greater information processing capabilities to coordinate their activity, and that the mainframe model could not grow at that rate.

During the 1960s and 1970s, companies such as IBM, NEC, and General Electric designed computers that were easier to use with more flexible operating systems that could be adapted to different needs. This gave rise to a golden age in the automation of business processes.

Information technology solutions could finally be supported by mass-produced hardware and not by hand. The operating systems and the programs built on them were flexibly adapted to the needs of each client, regardless of the hardware.

At this time (1975-1990), the large automated systems were deployed to coordinate the auxiliary operations of the companies: the first Supply, Contracting, Billing, and Collection systems. But, also, those of Human Resources, Logistics, Economic Control or Relations with Suppliers. The company, seen as a set of task flows with different focuses, began to entrust the coordination of all its activities to information systems.

The large corporate information systems stored the relevant information for each activity and recorded with the greatest fidelity each and every one of the steps to be executed in each operation. The traceability of any operation was essential to ensure that it was carried out and to know its status at all times.

Corporate systems focused on operations, allow the industrialization of business processes, thus executing a large volume of activity with a really low cost per operation. Only in this way is it possible to address the exponential growth in the volume of products and services that we have known in these decades in all sectors.

The most faithful image of this type of system is an assembly line. A flow of tasks where the role of human beings is to be at the service of the chain, entering data at different points in the process and executing what it requires.

Somehow, humans become the flexible end of a chain of execution “engraved in stone.” The price of massive automation of activities is paradigmatic rigidity and great difficulty when it comes to changing any process.

There is another hefty price tag: the systems are optimized to respond quickly to individual trade inquiries. It is really difficult to obtain comprehensive information from them. Just what is needed to make decisions?

3rd era: the x86 revolution

With the advent of the personal computer, a completely new universe was opened up in business. The PC provided three revolutionary ingredients :

  1. It made vast computing power available to everyone for all sorts of applications: analyzing data in spreadsheets, writing image-enriched documents, preparing presentations, and so on. Studying data, extracting information, and sharing it has never been so accessible.
  2. It was the gateway to a huge amount of information. The development of web pages allowed sharing and exposing the information of all kinds in a simple way. Email multiplied the possibilities of communication between people far beyond what could be shared with voice calls or face-to-face meetings. The limitations of time and space for two (or more) people to put something in common disappeared.
  3. It was the key piece for anyone to be able to program and execute information analysis operations on large volumes of data with a machine. Office automation tools, first, and friendly programming environments, second, definitely lowered the entry barriers for it. The analysis of information definitely left the field of “computers” and “computer science”.

The x86 revolution was distinguished from previous ones in that the changes were not driven by the technology or those who implemented it. The formula was completely different: people were given the means to do new things and they were allowed to change the ways of working and reorient their activities.

With this, the “knowledge worker” appeared the one who spends most of his time studying the information available to him and deciding which activities to prioritize or undertake. The knowledge worker is not a person at the service of an automated process, although he may participate in it. He is a person who decides which activities are incorporated into the process, in what order they should be attended to, and which should be taken out of execution. He is a decider.

When we talk about decision support tools, everyone thinks of the impressive dashboards designed to monitor activity by top management. Serious mistake: a company develops its activity thanks to thousands of decisions made daily by people who work with rather ugly data tables. These tables integrate information from different corporate systems, internal sources, and tons of hours of analysis by those who have designed them to be their basic tool.

All this happened little by little, over many years. And with this, it went from some organizations at the service of the operational to organizations where the decision of what to undertake before, or what changes to make to adapt to a changing market, had more and more weight. With an increasingly complex environment, only organizations with great adaptability were able to survive.

The key to this entire process was the redistribution of computing capacity and the information produced. The bulk of the information needed to run the company no longer resided or was generated in corporate systems, but rather on the PCs of the company’s hundreds of employees. Let’s see this in detail.

Where the information and computing capacity resides

Perhaps the best way to appreciate the x86 revolution is to represent the distribution of computing capacity (+storage + communications) within organizations.

Information processing capacity in the first two eras of information technology. Image: Mª Teresa Herrero, with elements from Adobe Stock.

The drawing seeks to give an idea of ​​the first two eras of information technology, focused on the automation of basic and auxiliary operations of the company. Unix servers, by making the technology cheaper and easier to use, provided much greater capacity than the earlier technology. Users accessed information from terminals that were mere input/output devices, without the possibility of processing the information obtained.

The organization is focused on merely operational, that is, it is a factory capable of producing large volumes, but little variety. By automating the processes we have made them much more immovable.

And that’s when our third era arrives.

Providing everyone with a PC completely changes the situation. Although with less powerful machines, the distributed computing capacity is much higher than the centralized one. This ability to process information, supported by tools and fed with access to information of all kinds (internal and external), completely changes the way of working.

But the key to this revolution is that it is the end-user who decides what information they need and how they want to study it. The one who looks for sources with which to enrich the information available to him and make decisions. Let’s not forget that corporate systems are targeted by activity.

To view cross-commercial information about a particular facility, for example, a person must pull data from two different systems and combine it. The PC allows you to do this, and with it, identify situations that were previously impossible to detect.

Within the complexity of each organization, each user becomes a specialist in a certain aspect of an activity. There are no longer generic profiles or training. The employee receives a “mission”, tools and must identify what he needs to carry it out.

Your first concern is finding sources of information that can help you organize your work in the maze of corporate systems. Everyone wants to “download” to their PC the summary lists of the status of the different operations to study, combine and cross data.

The demand for information from corporate systems skyrockets and it is difficult for them to respond. For two reasons: they are designed to execute processes with maximum reliability and traceability so that queries for specific operations are quick. That makes general or bulk queries a huge performance penalty, or simply impossible.

In addition, each system has its peculiarities in the face of these queries. The entry barrier to learning what information each one has, what the encodings used mean, how to obtain a list, etc., is years.

For all these reasons, it is necessary to create specific infrastructures that facilitate standardized access to the information that resides in different systems and, even, to create relevant crossings and combinations of that information. Data warehouses were born as intermediaries between users and corporate systems to overcome barriers to access to final information and carry out the first information processing. It is still the user who carries out the final processing from a wide variety of sources to create the tools of his work on his PC. But the first effort to obtain and process information is done from the data warehouse.

We have gone from an organization focused on operations to an organization focused on the activities of analysis, decision, and adaptation to market conditions. Something key to staying afloat in a highly competitive and constantly changing environment.

We can now welcome the 4th era of information technology.

4th era: Software vs. Service + Cloud. Who will take the lead?

Without the perspective of history, which has helped us understand previous eras, it is difficult to explain the enormous changes we are experiencing. Giving users a versatile tool with which to access and provide information, the PC, completely changed the company.

Cloud computing and software-as-a-service (SaaS) models repeat this process, this time without the need to put those means on our desks. The enormous development and ubiquity of communication networks in the last 20 years have made this possible.

Today, a worker who needs to analyze a lot of information is no longer limited by the capabilities of his PC. He can access powerful computing resources in the cloud and specialized software, which far exceeds the possibilities of office applications. This new revolution is once again in the hands of the applications and uses that users develop, and it will take place at the rate at which they incorporate and propose new ways of working.

Digital transformation is a matter of time. The one that users need to discover is how to take advantage of these new possibilities. With this, they will be able to develop their new tools and ways of exchanging information in the company. It is a change in world view, habits, and skills. That which in no way can be forced “from outside” or “from above”. It is a matter of learning and individual discovery. Let’s not forget that learning is 10% formal, 20% social, and 70% experiential.

The PC revolution gave rise to completely different companies, thanks to all the changes caused by users. If we want to repeat this success story, we have to do the same as then: let’s give users means and let them do what they do best: experiment and create new things. They will do the rest.

And, while we wait, boast to your children that you have led a true digital revolution before them.