Rethink Productivity Measurement to Reflect the Computer Age
| Category: Surveys and Statistics | Date: 2003-10-23 |
Despite the advertising hype, computers can impede productivity as often as they increase it. Nearly every business can cite statistics showing how computers have improved their effectiveness, but nearly every worker can recite horror stories about wasted hours spent trying to make their computers do something as simple as print a mailing label. I dont know about you, but there have been plenty of times when I have sat down to write an article or draft a client proposal, gone on without saving the document, and "wham," the flaming thing freezes and I’ve lost three hours of work! In the pen-and-paper era, the worst that ever happened was that the dog might eat it.
There is no doubt that computers are a marvel. The greatest benefits derived from computers are the huge storage capacity and productivity tools associated with various working programs.
THE CONFLICT IN MEASUREMENT
The advent of computers and how they have changed the way we do business, has caused a conflict in measuring productivity. This stems from the original analyzedof "productivity," which was conceived around the turn of the 20th century. At that time, productivity was measured for the most part in terms of units of "things" produced and was computed and analyzed according to how many workers it took to produce those units.
Today, with so much of the economy driven by service firms, productivity has been modified to include out-puts from service firms.
As an example, I’m CEO of a knowledge worker company, part of the larger database marketing industry. This is a different type of work, normally not regarded as "productive" by the original definition. We generate information.
We have processes to help people learn, and knowledge about knowledge. Yet none of that shows up on my balance sheet. My machines show up. My debt shows up. But my knowledge is nowhere to be seen.
According to the Meta Group, the worth of the database marketing industry is estimated at $10 billion. This breaks down to:
- Data Content: $5.3 billion
- Data Integration: $1.5 billion
- Data Mining: $3.2 billion
Yet, this is not computed in any country’s measurement of productivity. It is supposed to contribute to higher productivity somewhere in the future of these investments.
Technology --especially information technology (IT) -- has experienced phenomenal growth over the last few decades, while the growth of business-sector productivity in the United States has been relatively modest. If computer usage has exploded so dramatically, and if computers contribute to increased efficiency, then where is the associated productivity growth?
Not surprisingly, software companies admit that people rarely use 90 percent of a programs features. Yet, each new update introduces additional features, is more complicated and requires more resources (hard disk space and memory) to use. Given this endless treadmill of complexity in pursuit of simplicity, it’s refreshing to know that not all software publishers rely on marketing hype (rather than logic) to sell their products to a gullible public.
A new analysis shows that about half of the growth in productivity in nonfarm businesses can be attributed to the benefits of computer-related advances and investments. The study found that recent productivity has been more than double the average since 1973 and is expected to remain above 2 percent for the next decade if current technology-investment trends continue.
INVESTMENT AND
PRODUCTIVITY TRENDS
The overwhelming number of new communications devices has produced an enormous amount of intercommunications. Email alone is responsible for more than one billion, 200 million messages a year. Business communications in non-electronic modes has consistently increased every year, according to the DMA. The cellular phone, broadcast fax, etc., have contributed to more communications requiring faster reactions and responses.
The proliferation of cell phones, pagers and desktop and laptop computers during the last few years provides obvious examples of the last two decades’ rapid advances in information technology. As portable computers grow more powerful, theyre becoming a more integral part of the business enterprise.
Sixty percent of users who travel regularly in the course of their jobs rely on notebook computers as their primary computing platform. This figure is expected to grow to more than 80 percent within a few years.
Meanwhile, some companies are also looking at deploying notebooks to users who spend little or no time traveling. This is good news, because the benefits that come from widespread usage of portable systems typically outweigh the fact that it costs more to own and maintain notebooks than desktops.
The proliferation of cell phones, pagers and desktop and laptop computers during the last few years provides obvious examples of the last two decades’ rapid advances in information technology. As portable computers grow more powerful, theyre becoming a more integral part of the business enterprise.
Sixty percent of users who travel regularly in the course of their jobs rely on notebook computers as their primary computing platform. This figure is expected to grow to more than 80 percent within a few years.
Meanwhile, some companies are also looking at deploying notebooks to users who spend little or no time traveling. This is good news, because the benefits that come from widespread usage of portable systems typically outweigh the fact that it costs more to own and maintain notebooks than desktops.
Task complexity bears critically on yet another dimension of the so-called productivity paradox: the time consumed in knowledge-based work. In my view, mounting complexity demands longer work schedules and encourages the use of portable technologies (laptops and cell phones) that make remote problem -solving feasible.
Soon enough, we’ll never be off-line, and remote-problem solving will be mandatory. Just look around. Frequent connectivity has undeniably become an important attribute of the information age, and is requiring a significant time commitment from workers. This is true whether the time is spent surfing the Net, performing after-hours banking or hooking up to that ever-present office network from the home, hotel or airport lounge. So the question is:
where does this time come from? The answer increasingly is: from leisure time. Productivity enhancement is not about working longer - its about, or should be about, generating more value-added per unit of work time. Yet, thats precisely whats lacking in the information age measurement of productivity. Few companies bother to evaluate the productivity return on investment.
Productivity has become one of the great quandaries that has stumped economists throughout the 1990s. Despite the billions of dollars invested in new technologies, traditional government economic statistics reflect little impact on productivity or growth. This is not an academic point - it drives to the heart of the new economy. Businesses invest in new technology to boost the productivity of their workers. Workers increased productivity is what adds value to the economy - this is the key to sustained economic growth.
Research by a few economists like Stanford Universitys Paul Romer, suggests that new technologies generally dont become productive until a generation after their introduction. This is the time it takes for people to really learn how to use them in new ways. Sure enough, about a generation after the introduction of personal computers in the workplace, work processes are beginning to mutate enough to take full advantage of the tool.
But despite the proliferation of computers and other information technology hardware, there are reasons to believe that the capabilities of these machines are being underutilized. As the labor market increases human capital, greater capacity utilization should occur. This process should, over time, boost productivity growth.
Studies have identified productivity gains at the company level in industries like the electric utilities that demonstrate measurable increases in productivity, and observable but hard-to-measure increases in the quality of services. However, increases in productivity in various industry segments may not translate into aggregate productivity gains if the displaced workers are not re-employed in an enterprise that is equally productive. Accurately measuring this phenomenon is difficult at best, but continuing efforts to improve statistical data will help
The time we invest in learning new technologies, and the countless hours we spend looking for knowledge and experience is investment in the future. For now, this takes away from the time involved in producing widgets, and with more people in the labor force not involved in making widgets, is a reason for low productivity statistics.
To resolve this dilemma, new terms of productivity need to be employed to accurately measure the allied resources of those industries that are the barometer for measuring business health.
About the Author.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
There is no doubt that computers are a marvel. The greatest benefits derived from computers are the huge storage capacity and productivity tools associated with various working programs.
THE CONFLICT IN MEASUREMENT
The advent of computers and how they have changed the way we do business, has caused a conflict in measuring productivity. This stems from the original analyzedof "productivity," which was conceived around the turn of the 20th century. At that time, productivity was measured for the most part in terms of units of "things" produced and was computed and analyzed according to how many workers it took to produce those units.
Today, with so much of the economy driven by service firms, productivity has been modified to include out-puts from service firms.
As an example, I’m CEO of a knowledge worker company, part of the larger database marketing industry. This is a different type of work, normally not regarded as "productive" by the original definition. We generate information.
We have processes to help people learn, and knowledge about knowledge. Yet none of that shows up on my balance sheet. My machines show up. My debt shows up. But my knowledge is nowhere to be seen.
According to the Meta Group, the worth of the database marketing industry is estimated at $10 billion. This breaks down to:
- Data Content: $5.3 billion
- Data Integration: $1.5 billion
- Data Mining: $3.2 billion
Yet, this is not computed in any country’s measurement of productivity. It is supposed to contribute to higher productivity somewhere in the future of these investments.
Technology --especially information technology (IT) -- has experienced phenomenal growth over the last few decades, while the growth of business-sector productivity in the United States has been relatively modest. If computer usage has exploded so dramatically, and if computers contribute to increased efficiency, then where is the associated productivity growth?
Not surprisingly, software companies admit that people rarely use 90 percent of a programs features. Yet, each new update introduces additional features, is more complicated and requires more resources (hard disk space and memory) to use. Given this endless treadmill of complexity in pursuit of simplicity, it’s refreshing to know that not all software publishers rely on marketing hype (rather than logic) to sell their products to a gullible public.
A new analysis shows that about half of the growth in productivity in nonfarm businesses can be attributed to the benefits of computer-related advances and investments. The study found that recent productivity has been more than double the average since 1973 and is expected to remain above 2 percent for the next decade if current technology-investment trends continue.
INVESTMENT AND
PRODUCTIVITY TRENDS
The overwhelming number of new communications devices has produced an enormous amount of intercommunications. Email alone is responsible for more than one billion, 200 million messages a year. Business communications in non-electronic modes has consistently increased every year, according to the DMA. The cellular phone, broadcast fax, etc., have contributed to more communications requiring faster reactions and responses.
The proliferation of cell phones, pagers and desktop and laptop computers during the last few years provides obvious examples of the last two decades’ rapid advances in information technology. As portable computers grow more powerful, theyre becoming a more integral part of the business enterprise.
Sixty percent of users who travel regularly in the course of their jobs rely on notebook computers as their primary computing platform. This figure is expected to grow to more than 80 percent within a few years.
Meanwhile, some companies are also looking at deploying notebooks to users who spend little or no time traveling. This is good news, because the benefits that come from widespread usage of portable systems typically outweigh the fact that it costs more to own and maintain notebooks than desktops.
The proliferation of cell phones, pagers and desktop and laptop computers during the last few years provides obvious examples of the last two decades’ rapid advances in information technology. As portable computers grow more powerful, theyre becoming a more integral part of the business enterprise.
Sixty percent of users who travel regularly in the course of their jobs rely on notebook computers as their primary computing platform. This figure is expected to grow to more than 80 percent within a few years.
Meanwhile, some companies are also looking at deploying notebooks to users who spend little or no time traveling. This is good news, because the benefits that come from widespread usage of portable systems typically outweigh the fact that it costs more to own and maintain notebooks than desktops.
Task complexity bears critically on yet another dimension of the so-called productivity paradox: the time consumed in knowledge-based work. In my view, mounting complexity demands longer work schedules and encourages the use of portable technologies (laptops and cell phones) that make remote problem -solving feasible.
Soon enough, we’ll never be off-line, and remote-problem solving will be mandatory. Just look around. Frequent connectivity has undeniably become an important attribute of the information age, and is requiring a significant time commitment from workers. This is true whether the time is spent surfing the Net, performing after-hours banking or hooking up to that ever-present office network from the home, hotel or airport lounge. So the question is:
where does this time come from? The answer increasingly is: from leisure time. Productivity enhancement is not about working longer - its about, or should be about, generating more value-added per unit of work time. Yet, thats precisely whats lacking in the information age measurement of productivity. Few companies bother to evaluate the productivity return on investment.
Productivity has become one of the great quandaries that has stumped economists throughout the 1990s. Despite the billions of dollars invested in new technologies, traditional government economic statistics reflect little impact on productivity or growth. This is not an academic point - it drives to the heart of the new economy. Businesses invest in new technology to boost the productivity of their workers. Workers increased productivity is what adds value to the economy - this is the key to sustained economic growth.
Research by a few economists like Stanford Universitys Paul Romer, suggests that new technologies generally dont become productive until a generation after their introduction. This is the time it takes for people to really learn how to use them in new ways. Sure enough, about a generation after the introduction of personal computers in the workplace, work processes are beginning to mutate enough to take full advantage of the tool.
But despite the proliferation of computers and other information technology hardware, there are reasons to believe that the capabilities of these machines are being underutilized. As the labor market increases human capital, greater capacity utilization should occur. This process should, over time, boost productivity growth.
Studies have identified productivity gains at the company level in industries like the electric utilities that demonstrate measurable increases in productivity, and observable but hard-to-measure increases in the quality of services. However, increases in productivity in various industry segments may not translate into aggregate productivity gains if the displaced workers are not re-employed in an enterprise that is equally productive. Accurately measuring this phenomenon is difficult at best, but continuing efforts to improve statistical data will help
The time we invest in learning new technologies, and the countless hours we spend looking for knowledge and experience is investment in the future. For now, this takes away from the time involved in producing widgets, and with more people in the labor force not involved in making widgets, is a reason for low productivity statistics.
To resolve this dilemma, new terms of productivity need to be employed to accurately measure the allied resources of those industries that are the barometer for measuring business health.
About the Author.
:To contact see details below.
DBMarkets@aol.com
http://www.msdbm.com
Copyright © 2005-2006 Powered by Custom PHP Programming