Probing productivity

What difference does IT really make to organisations?

In the current edition of its Refractions newsletter, consultancy Accenture argues that the famous 1997 statement of economist Robert Solow – that “you can see the computer age everywhere but in the productivity statistics” – no longer holds. Productivity, it says, is bounding ahead in the US.

Why? First, Accenture argues that IT systems worldwide have gained interoperability. The work on Y2K helped this to happen, and so did the subsequent economic downturn, because it meant more attention was paid to gaining efficiencies through IT.

Second, Accenture holds that new technologies such as high-speed WLANs, RFID wireless tags, web-based CRM services and concurrent engineering are now able to “leverage the existing IT base to deliver on their original promises”.

Last, the integration of business processes has proceeded apace, particularly in what Accenture calls “extramural” cases involving partners and suppliers.

Accenture’s defence of IT is refreshing. In the past three years of dot-com blues and flat IT budgets, almost everyone has come to agree that people and working practices are more vital to success than IT.

Among the recent developments Accenture highlights, internet protocols seem to me the most significant. When, with such protocols, any PC can allow users to multitask voice, instant messaging, video conferencing and collaboration over documents, there could be a major leap in productivity – particularly if global calls to business partners are covered by cheap monthly subscriptions, can go to teleworkers and mobile workers, and require no special booking routines.

Video conferencing will be productivity’s secret weapon. The human face is enormously expressive. It could well speed the pace of business – as long as people stay off “personal” video conferencing.

In a research note published in May, Accenture’s Jeanne Harris pointed out that conventional measures of productivity – “physical counts off production lines” – ignore factors such as making better decisions, faster response times and accelerated innovation.

Fair enough. But unlike other areas of activity, production lines insist that workers stick to the task in hand, and do not digress, as is so easy when you’re able to make “personal” use of IT in an office.

IT’s main impact in US business, we should recall, has been on brokers of financial services, supply-chain-conscious retailers, and, above all, on manufacturers – especially manufacturers of IT.

We should also recall that US productivity only looks good against Germany’s or France’s when it is measured over a year rather than over an hour. US workers take fewer holidays. Measured by the hour, by contrast, they seem to take quite a lot of time off – despite, and perhaps because of the unrivalled amounts of IT they have at their elbow.