If youre wondering where the next IT growth spurt will come from, I suggest you take a look around at the number of corporate systems that remain untouched by the computing infrastructure. The basic engines of a company—including heat, cooling, physical access, water and electricity—generally remain unconnected islands apart from the IT infrastructure.
When systems become part of the corporate network, you get a spurt in productivity as previously unexamined processes go under the management microscope. For example, telephone systems were once analog boxes tucked into a closet, separate from the computing infrastructure; now, those telephone systems are morphing into VOIP networks that are less costly to install and maintain but offer all the digital capabilities inherent in a computing platform.
Recently I spoke with Robert Conant, vice president of marketing for Dust Networks. Dust Networks builds low-power networks de-signed to monitor industrial usage of power, heating, cooling or any other system that can accommodate one of the companys sensors. Conant related the scenario of a grocery store chain, which, as is typical for the retail industry, operated on very low profit margins—in the single digits. An increase in electrical costs had shrunk those margins first to zero and then to a loss. When the grocery operation created a sensor network to monitor electricity use, it found methods to conserve usage that were enough to bring its financials back into the black. Before the sensor network was developed, the grocery chain—like most companies and consumers—would get one big bill each month without detailed usage statistics. After having the network installed, the company gets as much detail as it wants for analysis.
A company looking for its next major productivity improvement would do well to look at such processes as much more fertile ground than the latest quick round of poor choices such as benefits cuts; mass layoffs; or the surefire company killer, quality reductions.
A good framework for companies thinking about their next step in productivity improvement is provided by Erik Brynjolfsson, director of the Center for eBusiness at the Mas-sachusetts Institute of Technology.
Brynjolfsson has provided a seven-step outline, the first step of which is to move from analog to digital processes. The next steps call for open information access, employee empowerment, merit-based incentives, investing in the corporate culture, recruiting the right people and investing in human capital. While those steps might seem very different from cutting power usage, on close examination I dont think they are that far off.
If a company is going to try in earnest to become more efficient in the processes upon which its infrastructure runs, it also needs to take an in-depth look at how it is organized and the messages it sends to employees. In addition, it needs to understand how it best uses its IT resources. One of the underpinnings of technology investment has been to support a business strategies and tactics. But defining those business goals and then making technology choices to support them are often awkward and difficult tasks. Business goals are frequently stated in terms of new revenue opportunities or tighter financial controls, which dont provide a direct path to easily determine technology choices to support those goals.
But the business goal of increased efficiency in electrical, heating and cooling systems provides a tangible target for future technology dollars. This business goal is also easy to establish by asking which of the many systems upon which your company runs are part of the computing infrastructure and therefore open to the same scrutiny you apply to accounts receivables in your financial system or new accounts in your CRM system. Youll probably find many that operate independently of the computing network and whose costs appear as a monthly lump-sum bill. Bringing those systems under the corporate computing umbrella should be your next major productivity improvement.
Editor in Chief Eric Lundquist can be reached at [email protected].