In this stage, the organization first introduces new data processing (DP) technology into its low-level, operational business processes--generally administrative systems such as payroll or accounts receivable.

Stage I is brought about by the introduction of the computer in the organization.

In this stage, the learning curve begins to move upward sharply as the organization experiments with new uses for the technology. While the organization concentrates on introducing the new IT at all available opportunities in the lower, operational level, it devotes less and less attention to the efficient use of its existing IT resources. Management creates and permits ol'ganizational slack in IT activities by continuing to commit more resources to IT development than are strictly necessary to get the job done. This extra spending nurtures innovation, which is conducive to expanding the use of IT into new areas of the business. With high slack and low control, the use of IT grows rapidly, but in an unguided and inefficient manner.

Stage II is characterized by a managerial climate of concern für strategies to encourage alienated users to investigate the potential for computing. Generally impressive cost savings in clerical areas, as weIl as a few of the inevitable "spectacular successes" reported in the trade journals, give a "time is of the essence" element to the movement.

By the end of Stage II, the computer budget generally exceeds revenue growth and becomes a control concern for senior management. Senior management then intercedes to curtail the rapid growth. In Stage III, slack is "squeezed out" by enforcing a higher level of control through tighter budgeting, full chargeout systems, and disciplined project management. In the "Control" Stage, the rapid growth of the "Contagion" Stage slows somewhat as tighter control measures are imposed on IT usa ge and spending. High control and low slack promote high levels of efficiency, but stave off innovation necessary to allow and to encourage IT to permeate all organizational functions. Striking the proper balance between control and organizational slack is the critical management decision which promotes effective organizationallearning through the stages.

Stage III is entered into as a result of the crisis. Management mobilizes a set of tasks to control expenditures for computing. Inefficiencies in computer applications are the most obvious and are usually the first target. Planning tasks are initiated in all aspects of the computing organization.

In Stage IV, management strives for the proper balance between slack and control as the new DP technology is firmly integrated into the company's operational business processes.

The most dominant characteristic of Stage IV. is a rethinking of the role of the computer resource in or- ganizational goal achievement. The rethinking process is manifested by an upsurge of user empathy and by the need to create an organizational design which effec- tively "taps" user needs and brings about reconciliation of user needs to the unique comparative advantages of computer processing over other alternatives. The alter- natives are evaluated in a manner which incorporates the economic concepts of out-of-pocket costs, oppor- tunity costs, and cost/benefits.