Blown to Bits.

Blown to Bits

By Philip Evans & Thomas S. Wurster

Harvard Business School Press * US$27.50

IN BLOWN TO BITS, PHILIP EVANS AND Thomas S. Wurster explain how the Internet's growth is creating a new economic model that is actually destroying traditional business strategies. The idea for this book sprang from an award-winning article that appeared in the Harvard Business Review titled Strategy and the New Economics of Information.

Following the original article--that some say is better than the book, its authors, two senior executives at Boston Consulting Group, conduct a thorough autopsy of the defunct traditional business strategies. Before the boom of the World Wide Web, businesses had two options when providing the public information about products and services. Evans and Wurster define those options as "richness" and "reach." The concept of richness refers to the quality and detail of the information, while reach refers to how much of the public receives it. The mathematical equation was simple: more richness meant less reach, and vice-versa.

But the Internet has obliterated that old axiom and made it obsolete. Copious amounts of information as well as high-quality products now reach huge numbers of people. Richness and reach are no longer necessarily in opposition.

As Evans and Wurster explain in their book, the Internet is changing traditional channels of information between companies and their employees, suppliers and their clients, eliminating intermediaries, erasing hierarchies at the very heart of the enterprise and transforming the model of consumer loyalty. These changes lead to what the authors call deconstruction, or "the dismantling and reformulation of traditional business structures." After the "explosion" of the old business structures, the pieces recombine into new structures which are fundamentally based on two separate economics: the economics of things (or traditional economics) and the economics of information. The authors point to the newspaper business as an example. Before the communications revolution, the economics of things (printing presses and distribution) tied together the information content of newspapers. However, since the advent of online delivery of information, readers are able to download news from multiple sources. "This does not mea n the demise of newspapers," write the authors, but a radical change in the way readers receive their daily dose of news that "will reflect the liberated economics of information".

This isn't a pessimistic vision of the future, rather a realistic one. There are new forces at play in the market, most of them precipitated by the information revolution. In this book, the authors explain how to adapt to these changes and profit from them and how to create new competitive advantages.

Blown to Bits is aimed in great part at the traditional large enterprise, in examining how the enterprise can and should change to avoid the fate of the dinosaur. Take, for example, Encyclopedia Britannica. Founded in 1768 by three Scottish entrepreneurs, Encyclopedia Britannica grew to be the most complete volume of knowledge available and the best-selling encyclopedia in the world. That was until a small, simple disk known as the CD-ROM appeared and nearly buried the venerable Britannica forever.

At first, Encyclopedia Britannica executives didn't seem to understand how the CD-ROM's attractive and appealing multimedia presentation would radically change how consumers buy information and knowledge. It was only after sales of Microsoft's Encarta Encyclopedia soared that Britannica executives realized they must innovate or die.

This book offers an entertaining study of the information revolution's impact on banking, automobile sales and the media as well as summaries titled "Sound Bits" at the end of each chapter. It is a solid, unpretentious book that tells us precisely what the beleaguered executives at. Britannica ultimately understood: one era has been destroyed while another has arisen from the new method of sending information. Blown to Bits chronicles the end of that era.