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As the economy continues to languish and the information technology sector in particular remains in hibernation, many pundits are engaging in revisionism, questioning the productivity boost from late-90s investments in IT. A recent report by McKinsey, “U.S. Productivity Growth—1995-2000,” for example, calls the relationship between IT and productivity gains “murky” because, the report contends, productivity gains were limited to specific economic sectors and often attributable to other factors.
Although we agree that IT is only one of many productivity-enhancing factors, we question the McKinsey reports conclusions. As former Xerox CIO and DOD Director of Defense Information Paul Strassmann has pointed out, the link between IT and productivity is not macroeconomic but arises at the individual enterprise level, dependent on not just spending but also on good management and skillful technology selection. For every FedEx or General Electric reaping maximum benefit from its IT spending, you can find several competitors spending as much but getting far less.
Nowhere is the difference between IT innovators and laggards as clearly drawn as in the 2001 eWeek FastTrack 500 report (see Page 45), our annual listing of the top e-business innovators in North America. The FastTrack 500 winners, led this year by GE and FedEx, weave Internet-based technologies into critical processes and operations—both within their own walls and throughout their interactions with customers, suppliers and partners. Despite the economic slowdown, they are increasing IT spending, with an eye on swift returns.
We congratulate all the FastTrack 500 winners. They are the best proof that the link between IT and productivity gains is clear.
Comdex: Whats New?
As all eyes turn toward Comdex, its tempting to ask whats left for innovators to offer us. Even Windows XP, this weeks headline act, merely delivers what Microsoft claimed to be giving us in 1995: a bottom-up rewrite of the consumer Windows platform.
The good news is theres evidence of powerful tools in the offing. Microsoft Research has made progress in delivering answers instead of just documents from a Web search, a clear productivity gain; IBM researchers can already demonstrate searchable voice archives that make even Bill Gates Tablet PC, with its digital “ink archive,” seem quaint. Heres hoping that this years Comdex includes more than just an icebergs tip of surprising and useful innovation.