Although tempered by the DotCom bust, information technology is still very real and continues to shake up industry after industry, and an untold number of companies are being swept-away by the resulting riptides. Clearly written and tough-minded, Blown to Bits is required reading for entrepreneurs, and others wanting to transform their companies before it's too late.

Chapter 1: A Cautionary Tale
Chapter 2: Information and Things
Chapter 3: Richness and Reach
Chapter 4: Deconstruction
Chapter 5: Disintermediation
Chapter 6: Competing on Reach
Chapter 7: Competing on Affiliation
Chapter 8: Competing on Richness
Chapter 9: Deconstructing Supply Chains
Chapter 10: Deconstructing the Organization
Chapter 11: Monday Morning

Opportunities are everywhere. The problem is transforming ideas into reality. Blown to Bits is a hard-hitting book that will definitely open your eyes. The New Economy is literally pushing aside old line companies in favor of dynamic, new enterprises. Everyone aspiring to be an entrepreneur should read this book or risk climbing the wrong mountain.

Michael Davis, Editor - Byvation

This book is an important e-business classic. But despite the authors' clever recommendations, an epilogue is missing, as the Internet revolution they announced did not materialise. The Internet EVOLUTION, however, lives on.

Blown to Bits is about the consequences of the Internet for businesses.

The most important conclusion in the book is that the combination of increased bandwidth, global interconnected electronic network, faster computers and open standards are abolishing the requirements up to now of balancing information reach with information richness.

One example is the alternative media that a company can select when potential customers are targeted. Newspaper ads can reach a broad audience with a limited and static message. At the other end of the scale, a personal meeting with the customer gives the opportunity for deep, detailed and interactive information.

Businesses' supply chains include the same balancing act. When firms do business, the number of partners is inversely correlated to the richness in the information of the interchange.

The Internet removes this balancing act because you suddenly can reach many partners without compromising on the level of detail and complexity of the information (vast reach AND vast richness).

According to the authors, the consequence is that the value chain is blown to bits. They call it deconstruction, which happens when the things economy increasingly is separated from the information economy. "Information is the kit that binds the value chains and supply chains". But the kit is eroding. Information is no longer embedded in the physical units. The economy for physical things and the economy for information are fundamentally different. Unlike physical assets, information (an idea, illustration, checklist, article, etc.) can be reproduced costless infinitely. And where things are worn out, information remains their original form.

Blown to bits contains a wealth of well-described cases like newspapers, banks, car dealers, stock brokers, computer hardware and last not least Encyclopaedia Britannica. In addition, the book includes many interesting text boxes with questions the reader can use for further consideration.

In the bright light of hindsight!
Blown to bits was published in the roaring heydays of the dot-com wave ... and it shows. In 2001, two years after Blown to bits was published, the authors admitted their mistakes in an article for their employer, Boston Consulting Group. They summarised the evolution:
1) It is increasingly clear that the new economy is not displacing the old one. Instead the old is in the process of transforming itself from within.
2) The Internet is NOT proving to be a disruptive technology (i.e. characterised by eliminating the advantages for existing market players). Instead, incumbents are using it to challenge their own business models.
3) Information does not, in general, "want to be free"; instead, intellectual property rights are being extended.

This does not imply that the Internet won't change a lot. Nor can we all can return safely to the good old ways of doing business. Rather, it means that all incumbents have got a second chance to get e-business right.

This conclusion concurs with the view of strategy professor Michael Porter (quoted August 2001 in Business Week)
"We need to see the Internet as complementary to other things the company does rather than contradictory or cannibalistic. That was a really fundamental mistake that many people made. They assumed that this was a disruptive technology that existing companies could not embrace as efficiently as a new company coming in with a clean sheet of paper.

And Porter concludes: "The Internet as a family of technologies will have a very powerful effect on operational effectiveness. We'll see deeper integration among service, sales, logistics, manufacturing, and suppliers."

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

The authors must be embarrassed. But they are probably too busy on their next bogus book full of more mananagement consulting buzzspeak and claptrap.
"Blown to Bits"?--perhaps they were referring to the bursting of the Internet bubble??

BLOWN TO BITS
How the new Economics of Information transforms Strategy
Authored by Philip Evans & Thomas S. Wurster

By Mike Jones
Management Information Systems
05/27/03

This book is about how the new age of technology dealing with the way information has changed the business environment forever. It starts out with the example of Encyclopedia Britanica and how they were leaders in their field in the late eighties and early nineties. Though they were very pricey the sales force targeted families with young children and the parents had to have this source of valuable information for their children. Sales were very high and there was no competition for the Encyclopedia icon. Everything was great until the computer age took hold and all of a sudden you could get that same information on a little round disk known as a CD-ROM for a fraction of the cost. That disk was even being given away with the purchase of a microcomputer that people could use for other things as well. This goes to show us that even the strongest business can be blind sided when they least expect it. Moral to be learned here is that "even the most venerable can be the most vulnerable".
All businesses are information businesses and the information is the main glue that holds any business together. The business of information is different than the business of things. When something is sold, the seller no longer owns it but when a piece of information is sold, the seller still has access to that information and can sell it again. Although the two are different they are still very much linked together as all things consist of some kind of information.
One of the most fundamental issues of the information business in the beginning was the dilemma of Richness and Reach. It was nearly impossible to have both Richness and Reach in information but the rise of the computer industry and the Internet has changed that forever. There are six aspects that come into play when talking about Richness of information and they are Bandwidth, interactivity, reliability, security, currency and the degree to which the information can be customized. This has all changed with the computer. This change is melting the informational glue, as we know it. It "deconstructs" value chains, supply chains, franchises and organizations. The definition of deconstruction is the reformulation of traditional business structures. The newspaper industry and retail banking is just a couple of businesses that have been deconstructed. You used to have to go to the bank to do your banking and newspapers were either delivered or you had to go get them. Now both can be done via the personal computer at nearly no cost and in a fraction of the time. Deconstruction does a lot of damage at first and hits where a company can least afford it and if a company is willing to accept the change it can make it through tough times.
Intermediaries exist because of the trade off between richness and reach. The deconstruction of the old intermediaries is known as disinter mediation and the creation of the new intermediaries is known as navigation. Disinter mediation used to be about substituting reach for richness but now it is about transforming them both. This will happen where a company can least afford it. The new navigators compete against each other on richness, reach and affiliation. The key is reach but reach is clutter without navigation. We need navigation to find what we want. Navigators are not consumer oriented even though consumers use them. They are supplier oriented because the supplier needs to get their product to the consumer. Reach has developed faster than navigation but we are slowly catching up.
Navigators affiliate mostly with suppliers but are starting to lean toward affiliating themselves with the consumer. This is surprising that this is only happening now and hasn't happened in the past. Navigation is worth more than the supplier business due to the need for navigation because without navigation the products and services would not get to the consumer.
Adding richness is the most powerful way to put off deconstruction due to the fact that if your giving people what they want you will stay in business. You need to be giving them something they don't already have which makes the consumer your biggest competitor. Richness goes up as reach increases. As richness and reach escalate so does the competitive advantage and intensity at all levels of the supply chain.
In closing I would like to say one thing and that is business has changed forever with the desktop workstations and microcomputers and the Internet. People are touching out to one another unlike they have ever done before. Networks are connected to networks all over the world. A message can get across the globe with the touch of a keyboard. Business is ever changing and will continue to change for a long time to come. We will either keep up and make the changes necessary or we will be left behind and fail. As it said in the book "The winner is not the player who understands the endgame. There is no endgame. The winner is the player who sees just one or two moves further ahead than the competitors".

It is common sense to say that industrial age businesses will have to change to enter in the new Information economy, but the reasons to change are not often clearly explained. Philip Evans and Thomas S. Wurster are giving some sound answers in their book: "Blown to Bits".

In fact industrial age businesses are historically built on two compromises: Information bound with things and a trade-off between richness and reach. Information is embedded in things to reach through physical channels the final consumer, who have some difficulties to get complete unbiased information on things he buys. On the other hand, physical constraints and costs are creating a need to find balance between richness (depth and detail of information) and reach (access and connection). A salesman is able to bring richness to chosen customers when advertising is reaching more people with less richness in information. The management of Information non-transparency and asymmetry is often the base for a competitive advantage.

What is happening if Information can travel separately from things and if it is possible to offer richness and reach at a same time? In that case the industrial age compromises are blowing up and competitive advantages based on asymmetric Information are disappearing putting many businesses in danger. This is what is happening with the development of computers networks using common standards to communicate in the Internet world where geography and time constraints are disappearing. Information can be unbundled from things and richness, at zero marginal cost, can be supplied with extended reach. The competition battlefield is moving from profitable cross-linked activities constituting a typical industrial age organization to individual profitable activities: "blown to bits." To compete there is no need to attack on all fronts for destabilizing a traditional company. Just concentrate on the more profitable activities-classified ads for newspapers, best customers for banks-makes it possible to "deconstruct" a business. Offering richness and reach together-deeper information on a larger range of products than retailers-makes it is possible to "desintermediate".

It's real hard time for traditional organizations, which have no other alternative than to "deconstruct" and "desintermediate" themselves their own business, before somebody else is doing it. But this task is not easy against the "navigators" as Yahoo!, Intuit, but also Amazon. These one are helping consumers to find their way in the Internet marketspace. They supply reach, richness and create a link with consumers by affiliation. They concentrate more on consumers' needs than on suppliers' one and have the objective to gain a critical mass giving them an added value. Traditional companies, often too closed to their physical offer, have lower reach than "navigators" and have difficulties to gain affiliation from customers who are suspecting them to promote their own products before liberating an impartial Information. However, they can build on a slight advantage in product richness, when products are changing rapidly.

To really compete, traditional companies need to go out from their own boundaries, and collaborate with their suppliers, but also with their competitors when needed. Supply chains and organizations are "deconstructed" as value chains are. Hierarchically leadership becomes obsolete to give place to a new leadership creating a culture and shaping a strategy, which will be the "glue" for a new corporation, a purposeful community.

"Blown to Bits" gives many other keys as enhancing "brands as experience", creating "new intermediaries" towards a fascinating "New Economy" and I can only recommend to every executive to read this book to make sure to be aboard the train going to our common digital future.