How can a company capture attention in this, the age of the distracted customer? What happened to knowledge management? What's next for ERP? Thomas Davenport shares his insights.

Tom Davenport has been around the IT block. One of the pioneers of process reengineering, he has been instrumental in the development of our understanding of how businesses use information to compete. A seminal thinker in the field of knowledge management as well, he has recently focused on the critical field of attention-management. His latest book is The Attention  Economy: Understanding the New Currency of Business.

EL: One of the things you say in your book, The Attention  Economy, is that, "understanding and managing attention is now the single most important determinant of business success." What is the attention economy and what are its implications for companies and then individuals?

TD:The attention economy overall is an economy in which there's way too much information and knowledge floating around for the brain cells that humans have available. So it becomes an economy where attention is really scarce and hence really valuable. And getting attention for your ideas, your products, and your information is a critical prerequisite for any kind of business success. If people don't know that your products exist and spend any time  cogitating about it, you don't stand a chance. A great example is "The Blair  Witch Project" -- $750,000 making the movie, $30 million marketing it.

At an individual level, you say something about "there can't be too many  initiatives at one time."

I see that as more of an organizational thing, but it certainly impinges on  individuals. And ultimately, any organizational initiative that's successful  comes down to individuals changing their behavior. But if they're not paying any attention to what the initiative is about, its objectives and so on, they're not going to change their behavior. Getting real change to happen in  organizations becomes a matter of individual attention. Every individual has to look at him- or herself as a consumer, and you want to be a very intelligent consumer and consume only information that's going to benefit you, your family and your organization. And you've only got so much to give out, so you've always got to be making this calculation: Is this the best use of my attention right now?

That's why so many employee newsletters fail, because there is so much  useless information.

EL: You note that there are different types of attention and certain  teams are dominated by certain types ...

TD: We identified, based mostly on psychological research, three overall dimensions and six types. There's front-of-mind and back-of-mind -- what you try to do there is push as much as possible to back-of-mind through repetition and practice so you can free up your front-of-mind for other things. That's one of the dimensions with the Attentionscape tool that we've developed. There's front-of-mind versus back-of-mind, voluntary versus captive, attractive versus aversive. What we argue is that you really want to try to maximize all of those six types because you're getting a maximum amount of attention if you're hitting on all of them at the same time.

EL: You also discuss the critical success factors there are for  getting the attention of CEOs. Can you talk about that?

TD: I wouldn't say CEOs -- I'd say executives. We looked at what managers, white-collar workers, and professionals pay attention to. We first asked what sort of media they pay attention to -- it turns out email is the  most attention-getting medium in our research.

Then we asked what attributes of the message would make it most likely to receive a lot of attention. We found out that personalization was the single most important factor. Second was keeping it short and concise. Third was emotion, having either positive or negative emotion being evoked by the message. And the fourth one was making it come from a trustworthy source. The first three are relatively easy to manipulate. I say easy, but it's actually a lot of hard work, because personalization takes a lot more effort than sending out a big group distribution email.

EL: What are the lessons we should learn from the online world? How do you capture and sustain attention online -- or even offline?

TD: Actually, the biggest attention industry, if you look at how much attention goes to it, is television. People watch it for three hours and 26 minutes a day on average in the United States. They're not online quite that much. We had a whole chapter on e-commerce and the Web. But for those industries like television, the movies, publishing and advertising -- out of each industry or sub-industry, we tried to abstract some of the lessons. So for television, it's the power of narrative. They always tell stories, make it easy to get in and get out, have a predictable time schedule, and they don't let technology get in the way.

For movies, we talked about age segmentation and the captive setting. We tried to point out some circumstances where people had taken some of these lessons and moved them across industries. For example, we looked at Gamesville, a Lycos entertainment Web site, and how they start new games at the top of the hour, much like a television schedule.

EL: Let's shift to ERP. In terms of strategic use of ERP, you are the expert. Recently, I've heard from some database gurus that ERP systems are what has really allowed companies to take all their various sources of data and normalize them, allowing for one common method of talking to each other.

TD: I'm pleased that you say that, but the world didn't seem to be that interested in a strategic perspective on ERP, at least at the time. I had hoped that after the Y2K thing, people would go back and say, "Gee I spent all this money and I should optimize it and get a lot of business value." But the fact is that they did not do that. They basically moved from Y2K to e-commerce. And now people are just trying to figure out how to cut costs. I'm glad I did that work on ERP -- I think it's very important. But it (Mission  Critical) certainly wasn't the most popular book I ever wrote.

EL: But you still have to fulfill everything, you still have to do  the back-office stuff -- ERP isn't going away.

TD: Exactly. SAP in its advertising now, they call it, "Solutions for the New New Economy, the one where profitability matters." Certainly, you found some pretty small e-commerce companies were putting in ERP because they knew they had to do fulfillment and be able to promise inventory, and so on. People are still doing it -- Oracle, SAP, and PeopleSoft are doing pretty well as companies. For a while they were doing extremely well. I think there's still a valid question: For any given piece of functionality, do you want to do it in an ERP system, which optimizes the integration of it all, or do you want to do it for the "best of breed" thing, which may optimize specific functions? I think it's certainly still a valid question.

EL: What about taking the data captured in your ERP system and extracting it and turning it into knowledge that can be acted on? Are companies finally getting better at this?

TD: I think they're getting a little bit better as the tools from the ERP vendors get better. But it's still not great. Too many people still only do the transaction side and don't manage the business any differently.

EL: Would you say that the road for ERP in the future is going to be  optimizing B2B buying and really looking at that?

TD: Certainly, that's part of it -- hooking up front-office and back-office stuff so you can do e-commerce and actually fulfill your orders, make your customers happy, and so on.

EL: What about the ASP model, in which everybody hooks into a system that's hosted somewhere else so all your suppliers can be on the same ERP system? Or a marketplace, where everybody is trying to collaborate? How do you manage the challenge of ERP talking to ERP?

TD: There's a huge integration challenge. I think it's fair to say that few companies or industries have solved it yet. What you're getting into is inter-organizational reengineering, and it's very time-consuming and very expensive. And I think that's one reason why a lot of these B2B exchanges, and so on, are going out of business.

They don't have enough capital to afford to do that kind of integration across multiple companies. Frankly, I think there will be a fair number of these consortiums, e-marketplaces and the like, that won't be able to avoid it either. It's already clear that it's taking a great deal longer than anybody thought it would to be able to do transactions without a huge amount of human intervention.

EL: What about companies like enterprise application  integrators?

TD: I think there's an appeal to being able to keep a lot of your existing applications and integrate them through some means other than one big system. It's a complex world, and even if you end up only integrating pieces of the business that you've acquired, there would be a perfectly good role for software like that. I think we'll end up using a lot of that stuff for integrating across companies. You're not going to find very many industries where every company has SAP or Oracle.

EL: Knowledge management turned into business intelligence and then it turned into CRM and then supplier relationship management, some even say competitive intelligence. What's going on in knowledge management these days?

TD: Well, the bloom is off the rose on pure best-practices sharing. But I think there is more energy now than there has been in business intelligence and I think it was a good thing to think about business  intelligence from a knowledge-management standpoint as some companies are  starting to do, because that means that you don't just assume that some  technology does it all. You don't assume that because you have some sort of data mining software, that these great insights are just going to jump out of your data.

The smart companies realize it takes a lot of very bright human beings around in addition to the software, and that's sort of a knowledge-management-oriented insight.

CRM is probably going to focus now more on customer knowledge. For some reason, companies were very slow to put customer knowledge into their knowledge-management initiatives. And what could be more important than that?

EL: I think your book, Process Innovation: Reengineering Work  through Information Technology, is once again required reading . Do you see a second wave of re-engineering, brought on as companies try to transform themselves using Web technologies?

TD: The word re-engineering does seem to be coming back into favor a little bit. We're actually doing some work with high-end knowledge workers and how you make their work more effective. High-level scientists and product developers, software architects, investment bankers, and consultants -- their work has not been touched much by reengineering.

EL: What are you seeing there?

TD: We're looking at many factors. One is technology, which is probably the least exploited thus far. Workplace design is a pretty hot issue, and more people are probably doing things with it than with technology. And then organizational design, probably the single most important factor if what you're interested in are things like innovation and creativity, and so on. We were just out at Ideo, probably the most successful product design firm. They hardly use any interesting technology, their workspaces are kind of fun but not particularly unusual, but they have a  really great culture that emphasizes innovation. And I think that's why they  succeed.

EL: So it's really a people thing; almost how you manage people's  spirits.

TD: Exactly. If you want employees to think creatively and share their  ideas and so on, you have to work on that kind of stuff.

EL: What do you think about what's happening with convergence? What are some of the trends you see developing in that marketplace?

TD: The Internet is still there, and companies are still quite interested in how to take advantage of it more effectively. We're just at the beginning of thinking about how we change our processes and our cultures and our governance structures to do anything differently with it. It takes a huge amount of time. We've had ERP for 20 years, and only a small fraction of companies have started to change the way they manage using the systems. I think that will be true of the Internet.

Right now, we're sort of in a period where there's no really big new ideas, and a lot of managers, employees, and organizations just want to take all the ideas that have come along for the past several years and put them together, integrate them, simplify them, and get some value out of them. They're all looking to extract some value from their existing infrastructures and, at  this moment, cut costs from their existing infrastructures.

EL: What about online communities? It's almost as if an online community does three things: it gets attention, it sustains attention with user participation, and it encourages knowledge sharing of the kind where a novice can learn from an expert. Do you see companies embracing the concept of communities -- internally with their own employees, and externally, with customers, suppliers, and other partners?

TD: I think online communities are great and they have a number of positive attributes. But I think a lot of companies try to do them on the cheap, and they don't really take experts and put them in roles to facilitate communities. It's a huge amount of work to facilitate an online community. Ultimately, within companies, we'll see online communities as kind of another  unit of organizational structure. You'll say, "Well, I'm in the accounting department, but here are the online communities that I'm really active in." And that will give you some sense of a person's view of the organizational structure.

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Christian Sarkar is Editor-in-Chief of christiansarkar.com. You can  see more of Christian's work at onewwworld.com.