Business practices drive the IT industry

As an industry and a community we have lost our way. Somewhere along the time of the client-server revolution, we lost touch with the simple elegance of creating easy-to-use but powerful applications and products.

As an industry and a community we have lost our way.

In the early days of the PC revolution, the need to keep things simple went hand-in-hand with innovation. If we think back, the PC itself was adopted broadly because of a common standard that allowed a broad number of companies to participate simply by maintaining compatibility with the IBM PC standard. And the applications to drive that adoption were relatively simple-to-use spreadsheets and word processors that most people could master quickly.

But somewhere along the time of the client-server revolution, we lost touch with the simple elegance of creating easy-to-use but powerful applications and products. And we can blame greed for that.

The truth is we allowed software companies to make their software exceedingly complex because to get their software adopted, they had to get consulting firms to push its adoption among business executives. The sad truth is that IT people frequently colluded in that endeavour. But people who bill by the hour lack the proper incentive to keep things simple, so as a result we have lots of overly complex systems that don’t work very well.

Granted, the client-server applications are often less complex than the home-grown systems they replace, but at the end of the day they are only half measures, because maintaining and customising these applications is still far too complex. As a result, a lot of business executives are wondering what happened to the promised productivity benefits that were suppose to be generated by billions of dollars of investment in IT.

A new study from McKinsey & Co examines the driving forces behind US productivity gains and sheds some light on the problem. The report finds that across all the industry segments that experienced gains in productivity, information technology was only one factor, and in most cases not the dominant factor driving the increase. Instead, the study finds that most of the industries that experienced big gains did so because of significant innovation of the business practices within that industry. For example, the retail industry became more productive in response to the innovations created by Wal-Mart.

Now IT supported and helped enable those innovations, but it was not the dominant driving force behind them. And to help drive the point home, the study states that industry segments that invested heavily in IT — such as hotels — but did not innovate their business practices, saw little to no benefit from IT investment.

The obvious conclusion is that IT people working closely with business people can make a big impact on productivity. But this does not happen as often as it should because the technology is still too cumbersome to adapt to fluid business models.

The truth is, the simpler something is, the more successful it will be.

So the next time someone comes to you with that great innovation that’s going to change the world in 12 months or more by creating opportunities for consultants to show off their expertise, do us all a favour: just say no.

Vizard is editor in chief of Infoworld (US). Send email to Michael Vizard. Send letters for publication in Computerworld NZ to Computerworld Letters.

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