The Productivity MacGuffin
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During the last presidential election year, while most Americans focused on
flags and furloughs, I went out on the hustings to speak on the subject of
computers and white-collar productivity. Following this ordeal. I vowed never
to address the issue publicly again. But that's proven to be impossible. The
subject keeps cropping up, and no one in our industry can afford to ignore it.
Alfred Hitchcock invented a term to describe the object in his films around which all the action revolves. He called it the MacGuffin. It could be a missing body, a bottle of wine that is not really a bottle, of wine, or whatever.
Organizational productivity is the MacGuffin of the computer industry. It is the missing return on investment after more than a decade of heayy spending on information technology. During the l98Os, companies spent almost a tillion dollars on new information technology, but productivity in the services sector actually declined.
The situation has grown more serious since my lonely lecture tour. Global com- petition has intensified, and most companies regard increased productivity-- measured in terms of lower cost structures, reduced cycle time, and speed to market--as absolutely essential for survival.
The situation is even more serious for companies in the computer industry. If our customers are focusing with renewed vengeance on productivity, and if we still can't show how our products help deliver it, there is some question about our own survival.
Fortunately, some good news is at hand. Fortune recently carried a story about workgroup applications entitled "Here Comes The Payoff from PCs." It talks about time savings of up to 90 percent from groupware. Of course, one story in Fortune does not constitute a trend-- especially when it's hot on the heels of still another article by Peter Ducker in Harvard Business Review on the new productivity challenge. Some may even take the combination of the two as a negative indicator.
But clearly something is happening on the white-collar productivity front. In fact, two things are happening: networks and mobile computing. With growth rates of almost 40 percent a year, they have become the twin engines for growth in the computer industry. Both trends are rclated directly to the quest for improved productivity.
Over the last 10 years, many companies have fallen into the trap of technology for technology's sake. This has not been entirely their own doing. They have had ample encouragement from members of our industry, who have never hesitated to trumpet their latest product release with no thought to customers business goals. In all the excitement, people lost sight of a few simple economic truths.
The first is that real value in an organization is generated not by machines, but by people. It applies not just to computers, but to the steam engine, the printing press, and the pencil. The second principle is that the greatest value is generated not by individuals, but by teams.
Given these two principles, there was no reason to think that PCs, by them- selves, would increase productivity. The PC revolution may have even made things worse. As Arno Penzias, the Bell Lab's Nobel prize winner, points out, there is a net loss in productivity when individuals must run errands between isolated machines.
It is no coincidence that networks and portable computers are booming at a time when companies are at long last realizing gains from their computing invest- ments. Networks and portables--and the applications that both need--address the basic organizational need for coordination and collaboration. Networked applications enable people to share information and work. Correctly designed applications enable people to work together even though they are not always connected (it is another fundamental truth that people are not always in their offices).
Industry wide numbers on productivity gains are still not in, but there is mounting evidence of tangible gains. One of Lotus's customers, a worldwide consulting firm, has connected its entire organization and uses networked ap- plications to leverage expertise. Knowledge throughout the firm, regardless of location, can be applied to every customer account. As a result, it is winning new accounts. Another customer, a computer company, uses networked applica- tions to capture and preserve the "intellectual capital" in its product development process, enabling people to move from project to project without the costly start-up time. These are the sort of real, tangible gains our customers have been looking for all along. We are clearly getting closer to the elusive MacGuffin.