Information Technology and the Firm 559what categories of items sold better than others. After finding an underper-
forming category, she may check how different groups or districts of stores
performed for that category. Knowing how each store performed, she might ex-
plode down, looking at individual items, and compare their performance to
that of a prior week or year. This process is like taking the Rubic’s cube and
continually rotating the levels, looking at each of the cube’s faces. Each face of
each small cube represents data for a piece of merchandise for a store for a pe-
riod of time. That is why this process is referred to as “slice and dice.” You can
slice and turn the data any which way you desire. The data can also be viewed
and sorted in a tabular or graphical mode. The same theory applies whether
the database contains retailing data, stock market data, or accounting data. Ex-
hibits 16.7 and 16.8 show examples of a decision support system’s output. The
output was created by Pilot Software’s executive information system.
ADVANCED TECHNOLOGY
Many new technologies are on the horizon, two of which are database mining
and intelligent agents. Both address the issue of information overload. In the
1970s, the average database was perhaps 100 megabytes (millions of bytes) in
size. In the 1980s, databases were typically 20 gigabytes (billions of bytes).
Now, databases are in the terabytes (trillions of bytes). Wal-Mart has a data
warehouse that exceeds 100 terabytes. With all that data, it is difficult for a
user to know where to look. It is not the question that the user knows to ask
that is necessarily important, but, rather, the question that the user does not
know to ask that will come back to haunt him.
These new technologies examine entire databases, scanning them for any
data that does not fit the business’s model and identifying any data that the
user needs to examine further. These data mining techniques can be used suc-
cessfully in many industries. For example, auditors might use them to scan
client transaction detail to look for transactions that do not conform to com-
pany policies, and stock analysts can use them to scan data on stock prices and
company earnings over a period of time in order to look for opportunities.
CONCLUSION
The world of business has changed dramatically in the past 10 years. What was
unimaginable then is ordinary today. Product life-cycle times have decreased
from years to months. New technology is being introduced every day. An Inter-
net year is equal to three or four calendar months. The manager who is com-
fortable with and understands the practical implications of technology will be
one of the first to succeed. Imagination and creativity are vital. Don’t be afraid
of change. Understand it, and embrace it.