The 3 Ways A Business Uses Technology

Too many times technology is treated as an answer trying to find a problem.

All too often new technology waves, especially in the realm of "AI", come along that have potential but few clear use cases. The major AI waves (and winters) have shown that every time an "AI winter" hits, only the real applications hang around.

There is no magic dust to give you answers.

What is real is that a business involves information transformation to realize a goal. Technology can make information transformation more efficient, raising productivity, making the company more competitive.

To better frame the true nature of the value of mechanized cognitive labor we need to examine the core ways we can improve information processing in a business with technology.

In this article I'll make the argument for the 3 ways you increase information transformation efficiency in a business with technology:

1. process information faster
2. process information cheaper
3. enrich an information transformation with new or more information

To better understand why this is, I want to reframe a business as a graph of divisions all doing specific information transformation and passing information to each other to realize a goal (e.g., "revenue").

Reframing a Business as an Information Processing Graph

We can model a business as a graph of nodes representing the departments exchanging inforation in joint effort of achieving a mutual organizational goal (e.g., "generate revenue").

In this graph, every business unit is a node, and every connection is a transfer of information.

Knowledge work is information processing in non-labor-output roles. As information flows into the company's business units, it is processed and enriched through knowledge work until it acts on its intended goal (e.g., "capturing revenue"). In the graph below we can see an example of a property insurance company generating revenue through information flow across its business units arranged as a graph.

Knowledge work technology supports information processing in a company's graph of information flow and serves as a critical catalyst for converting incoming data into actionable insights, ultimately facilitating a faster and more efficient flow of sales into cash. Improving your information processing capabilities directly correlates to improving how well you produce business results.

Modern service businesses focus on knowledge work, which can be understood as efficient information processing. Tools like spreadsheets, analytics platforms, and integrated language models don’t eliminate work—they reduce friction in the flow of information, speeding up the transformation of data into actionable insights.

Technology either enhances or hinders this process, with each tool or method designed to accelerate the transformation of information. Once you accept this framing of a business, it then makes sense that there are only 3 ways we can change the efficiency of information flow through a business.

The 3 Ways a Business Uses Technology

There are only 3 ways a business can apply technology to improve the efficiency of information transformation in a business:

1. process information faster
2. process information cheaper
3. enrich an information transformation with new or more information

Once we frame improvements to our technology platform in these 3 areas, we can then evaluate any technology investment as how it would change productivity in these 3 areas. This makes any proposed technology change, AI or otherwise, grounded in specific functional improvement.

Once you set finite ways to evaluate technology, the vapor of potential either condenses into reality or evaporates into the ether.

AI methods either become a lever for improving the rate, cost, and quality of that transformation --- or they quickly disapate into the thermal noise of the latest marketing cycle.

Towards a Technology Value Model

Now that we have our organizational knowledge work modeled as an information processing graph and we have 3 areas that we can improve information flow through this graph, we can build a discrete set of steps to evaluate any specific "AI" technology.

In the next article I expand on the information processing graph concept to create a matrix worksheet that allows you to quickly triage any proposed "AI" method for your business or division.