THE GREAT EQUALIZER

When a truck rolls into the maintenance bay at Ryder System Inc.'s New Brunswick (N.J.) facility, all Karen Reinecke has to do is push a button to learn instantly what's ailing the vehicle.

Reinecke, a technician for the $4.2 billion transportation giant, simply touches the probe on the end of her handheld computer to a tiny coin-shaped disk on the truck's cab that has been gathering information on engine performance and fuel consumption from electronic sensors under the hood. Gone is the guesswork--wrong 50% of the time--in finding engine problems. And with the sources of trouble more quickly identified, a truck's downtime can often be cut in half.

Information Age meets Road Warrior. Launched in mid-March, Ryder's Fast Track Maintenance Service will capture every bit--and byte--of information on its trucks electronically. And thanks to all the new data, scheduling the company's 8,500 technicians and 162,000 trucks will be simpler, inventory tracking and parts ordering more efficient, and reports to fleet customers far more detailed. Better yet, Ryder will be able to use information it collects on engine-part wear to negotiate longer warranties from suppliers.

Chief Information Officer Dennis M. Klinger figures the $33 million investment in new computer systems will pay for itself in two years. ``Once we have that database of not only how to fix the truck, but of failures, we can predict which components act best in what applications--whether it's on the road or running around town supplying Burger King,'' he says.

Ryder's transformation is just one small part of a quiet revolution in the way business is viewing and using information. After years of big investments in technology to automate such tasks as order entry or billing, companies around the world are suddenly scrutinizing the information those systems capture to find easier and more efficient ways for their employees, customers, and suppliers to do business. The reason: Competitive pressure is pushing companies to downsize even as they improve both the goods they make and the service they provide.

Forced to do more with less, corporate giants such as IBM and AT&T are scurrying to reengineer their businesses by rethinking work flows and encouraging information sharing among once-autonomous fiefdoms such as purchasing, manufacturing, and marketing. But it's not just the big boys. Smaller companies and the self-employed are discovering that recent price drops and performance advances in PCs, wireless communications, and business software have given them cheap, potent weapons to compete gamely against big, deep-pocketed rivals.

Employees, too, are being buffeted by the Information Revolution. As businesses depend more on collecting, analyzing, and sharing information across their operations, they're demanding new worker skills for the Digital Age (page 112). A recent survey by compensation consultants N.E. Fried & Associates found that at least half the secretaries at most of 478 U.S. companies used basic spreadsheet software. And factory workers at world-class manufacturers such as Motorola Inc. must have the math and basic computer skills to run computer-programmed machinery or use statistical process controls to monitor quality on the production line. ``The companies that do not provide information on an accessible basis to those that need it will be disadvantaged,'' says Robert M. Howe, a former Booz Allen & Hamilton Inc. consultant who since 1991 has run IBM's fledgling consulting business.

Luckily, a new generation of cheap computers and advances in software and networks allow U.S. business to ferret out information it couldn't afford to find in the past. Andersen Corp., for example, can manufacture windows to order because it installed PCs in stores to let customers configure, price, and order their own windows. And emerging technologies such as digital image processing and object-oriented software, which allow programs to be written in easy-to-reuse blocks, will let companies capture information without the cumbersome and costly process of translating it into arcane computer language. ``All of a sudden,'' says AT&T CIO Ron J. Ponder, ``it doesn't cost as much to have this technology.''

That's why many companies are finding it's never too late to automate. With almost daily advances in computers, software, and networks, the cost of computing power is dropping roughly 30% every 12 months. Some companies that are only starting to go digital with networks of PCs or fast workstations find their processing costs actually lower than those of competitors who took the plunge in the early 1980s, when costly mainframes ruled the earth. In fact, USAir says it will get a leg up on competitors--and may spend half the amount rivals American Airlines and United Airlines pumped into their mainframe computer systems. The reason: It's using hundreds of workstations to tear through critical ticketing information overnight--which some competitors take a couple of days to crunch.

Getting information faster and more accurately can dramatically alter the rules. Look at how the relationship between suppliers and customers has changed for retailers. In the 1970s, U.S. merchants started to replace clunky cash registers with electronic point-of-sale terminals that made tabulating receipts easier. But it wasn't until the 1980s, when scanners and bar codes became de rigueur, that retailers fully appreciated the wealth of information they have on their customers--everything from how often they use credit cards to what color socks sell best on Friday night.

Now, instead of taking product deliveries when vendors dictate, merchants such as Wal-Mart Stores Inc. increasingly are telling manufacturers what they want and exactly when and where they need it. Meanwhile, savvy suppliers are tapping this information to fine-tune their own production schedules according to what consumers are buying. ``Point-of-sale [technology] changed the balance of power between retailers and consumer goods manufacturers,'' says Gerald Loev, former CIO of Prudential Insurance Co. and now head of a consulting service for Computer Sciences Corp.'s Index unit. Adds Deloitte & Touche Managing Director William Atkins: ``If you're the vendor, you're at the [wrong] end of the chain.''

Retailing is by no means the only industry in the midst of this info-tech revolution. Whether it's IBM giving salespeople once closely guarded data on product costs so that they can quickly respond to customer bids or Ryder's digitized garage, companies in almost every industry are keen to gain competitive advantage by employing digital technologies to manipulate information. ``The more you know about your consumers, the more you're able to predict what they want, and the more you're able to deliver products that the customers want to buy,'' says John W. Harper, chief financial officer for USAir Inc. ``In some cases, you can even create demand if you have the right information.'' That way, USAir can ``microanalyze'' data on the 160,000 people it carries each day to find the best fare and schedule to fill its Friday afternoon flight from Pittsburgh to Harrisburg.

Above all, the companies most adept at exploiting technology to mine data are seeking something basic: to please customers. In fact, a recent Computer Sciences survey of information system managers at U.S. and European corporations found that customer service is the No.1 focus of their companies' investments in technology. Ryder's Klinger says the new technology his company is using is the only way it can boost its customer satisfaction rating to 95%, from the current 88%, by the end of 1995.

Edward L. Schrenk, senior vice-president at United Services Automobile Assn. (USAA) in San Antonio, goes further. He credits much of the insurance and financial services company's success to its commitment to technology. In just 15 years, USAA has mushroomed to the nation's fifth-largest private auto insurer and fourth-biggest provider of homeowners' coverage, with $18.5 billion in assets.

Since 1969, USAA has spent $130 million on computer and imaging technologies to boost customer service and lower costs. Today, it boasts an information system so advanced that it can track minute details, such as which auto parts are getting fixed most often. Why bother? USAA passes that data to parts suppliers who then make those parts if there is a chance for improvement or if they can make them more cheaply. The Big Three also get data from USAA to improve their parts.

Likewise, USAA had been trying for a long time to get glass shops to repair windows that had punctures outside the driver's field of vision, but no cracks. But shops would rather pocket the $275 to replace an entire windshield than charge $35 to repair it. So even though USAA offered to waive the deductible if customers would fix the glass, body shop owners were convincing drivers to replace the whole thing. Only when USAA started capturing data and publishing the repair record of various shops in its newsletter did this start to abate. The shops realized where they stood relative to the competition and didn't want to lose USAA's referrals. The percentage of repairs zoomed to 28% from 5% in just four years.

To be sure, not all companies have been as successful in making huge investments in technology pay off. The problem, consultants say, has been the traditional view of technology as a tool simply to cut costs and support already- existing operations. In the early 1980s, companies such as General Motors Corp. were convinced that huge investment in robotics to automate manufacturing plants would boost productivity. It didn't. ``In the past, the technology was seen as a peripheral vehicle for implementing the strategy,'' says Joe Carter, managing director of Andersen Consulting's new technology center in Palo Alto, Calif. ``Today, technology is the strategy.'' In fact, much of the action in corporate information systems now involves capturing data on customers. ``We have to have an end-to-end [direct] relationship with our customers,'' says AT&T's Ponder, who was recruited by the telecom giant less than a year ago to help link corporate goals with AT&T's massive technology investments.

For a $67 billion behemoth like AT&T, understanding customer needs is critical. Ponder argues that large companies will find that future opportunities for growth will be in smaller markets or niches, with customers they already have. ``You can't win anymore by selling 10 million of a product,'' he says.

The real breakthroughs will come from the ability to ``mine'' information--the process of quickly gathering and analyzing the millions of bits of data that a business generates each day--and steer various pieces to the right people within the organization. ``Power used to be that you controlled the information,'' says IBM's Howe. ``Now, power comes from providing greater access to the information.''

But first, companies have to know their customers in even more detail. Dell Computer Corp. CIO Thomas L. Thomas says new computer systems he is installing will make Dell the ``Nielsen'' of the computer business. By using new systems to track customers' detailed buying habits, Dell hopes one day to be able to anticipate their needs and call them with just the product they're most likely to buy--say, more memory or new software.

Dell is also investing heavily in a global information system that will, among other things, enable a registered repairperson in any country to pull up data on any Dell PC--in his or her native tongue. That does away with the need to print manuals in many different languages. Over time, Dell even plans to give its more sophisticated customers access to this information system--allowing Dell to reserve more expensive human hand-holding for less savvy customers. Starting this year, some customers will be able to order additional PCs and receive shipment without ever talking to a salesperson. Later, they will be able to pull up technical information to diagnose and fix problems on their own, rather than tapping Dell's service desk.

Indeed, customer service is one of technology investment's hottest areas. Good customer-service systems can cut field-service costs, improve relationships with existing customers, and eventually generate new sales. GTE Corp. customers used to get bounced around until they found the right department or person to send out a repairperson or process an order. That's because operators could do little more than take down basic information and pass the caller along. ``It proved to be not very good customer service, but also very expensive to us,'' says Lanny Russell, a vice-president of GTE's telephone operations.

GTE decided that the best way to service its customers was to offer ``one-touch'' service--from the same operators who used to pass the call. That led the company to start developing a new system in 1992 to give operators access to several corporate databases quickly, allowing it instantly to send out a repair truck or even test the line electronically. In pilot tests, operators now solve problems with one call 35% of the time--compared with one in 200 just over a year ago. ``We'll be able to provide better service in three years than we can today--and we'll be able to do it with much lower employee counts,'' predicts Russell.

Increasingly, companies are leveraging their existing information expertise into new businesses and markets. Dallas-based Amtech Corp. is a $60 million company doing a thriving business supplying railroad companies with computerized systems that track exactly where railcars--and goods--are, anywhere in the nation. The company is using the same radio-frequency technology to branch into automated toll-collection systems to help state and local government reduce delays at toll plazas. With Amtech's system, commuters use a credit-card-sized tag on their car that emits a signal at the tollgate identifying the owner without stopping. Monthly tabs can be settled via credit card.

For some companies, the only way to avoid falling behind competitors is to build organizations and systems that can adapt quickly to marketplace changes. At Texas Instruments Inc., the motto is ``Change faster than change,'' says CIO J.R. ``Bob'' McLendon. TI, which spends more than 4% of revenues on information technology, has long been a leader in the use of technology--it has had a sophisticated e-mail system for 15 years, for example.

Now, McLendon is using that expertise to build what he calls ``the virtual factory,'' a system to let TI build any product any time at any of its factories worldwide--with all the engineering specs and invoices moving electronically. Already, TI's product designers can transmit designs and equipment setup instructions to automated manufacturing sites globally. For example, TI keeps its big million-dollar chip testers in the Philippines, but they're controlled by test engineers in Houston. While TI still has a way to go, McLendon boasts that the semiconductor group reduced cycle time from order to delivery an astounding 39% last year--largely by linking its computers into one global network. Monitored from a space-age control center near Dallas, TI can reengineer processes on the fly--though the chips may be ordered in Japan, developed in Texas, and made in the Philippines.

If concepts such as the virtual factory or the virtual office are going to take off, however, companies will have to change their corporate cultures in addition to adding new digital technology. As companies break down the barriers between departments and their customers, ``sharing information becomes really critical to any organization's success,'' says Thomas H. Davenport Jr., a consultant with Ernst & Young.

The problem, Davenport argues, is that many companies spend big on technology to allow employees to share information, but forget that sharing ideas is an ``unnatural act'' in corporate cultures that reward individual achievement. ``If we really cared about information sharing, we would start to evaluate people by how well they share,'' says Davenport. With the amount of information that flies around organizations growing daily, focusing on information sharing--instead of just information technology--may be the next revolution.