Let’s have a look at great lessons we can learn concerning the implementation of technologies into contemporary enterprise environments.
This is a quote from a brilliant book by MIT professors McAfee & Brynjolfsson, “The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.” which examines the economics of technology. They base their research on historical data and there are great lessons we can learn concerning the implementation of technologies into contemporary enterprise environments.
Lesson 1 - the introduction of technology is not enough
When the electrical engine started to replace steam engines in textile factories, there was only 1-2% increase in productivity. How comes The steam engine was bulky and there was one big one in the middle of the shop with a huge axle and belt distributing power to the looms. The basic idea was to replace the big engine. The working conditions in the shop got better (better air, less heat), but the malfunctions of the power gears and the efficiency of the looms remained the same. Only when the old shop managers were replaced by the next generation did they come up with the idea that the electric engines can be much smaller and embedded in the actual looms. The mill didn't need not to be organised into floors around a single engine. The factory layout could follow the production process. Guess what, introducing this new idea resulted in the creation of a production line and a bump in productivity of tens of percents. This organisational change took 20 to 30 years We like to think of our age as being much more progressive than the Victorian, however it still takes 5-6 years to see the full productivity benefits of a new technology and every dollar invested into a technology needs up-to 9 dollars invested into organisational change and training.
Lesson 2 - a new division of labour
When Gary Kasparov lost a chess game to a computer called Big blue in 1997, it was a turning point in the history of chess. Thanks to the Moore’s law, any decent chess program installed on your notebook will beat a chess grand master. One would have thought that there couldn't be much going on in the chess world, but the opposite is in fact true. There is a discipline called “freestyle chess”. Any combination of players and computers creates one team in a freestyle chess tournament. The results of these tournaments are quite surprising. State-of-the-art chess super-computers cannot beat human/computer tandems and everybody was stunned when it was revealed that the winning team in one tournament consisted of two amateur players and three home computers.
This is an excellent example of a new symbiosis between humans and computers; routine tasks like the tactical analyses of a mid-game position are done much more efficiently by a number crunching machine leaving the human to focus on strategical decisions and introducing new ideas into the game.
A business example would be the clothing company, Zara - this fashion retailer invested heavily into the computerisation of the supply chain management. The result is a very short time to market for their products. Shop managers keep only a few weeks of stock in stores and order directly from the factory the clothes that should be manufactured and sold over the coming months. The shop managers not the machines make the decisions about what clothes are going to be in the store based on their personal observations or what cool and well-dressed customers are buying.
The authors of the book formulated the following statement:
ideation - e.g. design of new products/services
general pattern recognition - e.g. cool hunting
complex communication - e.g. customer interviews
are the tasks which people excel in and computers can be a great sidekick for, but definitely not initiators.
Looking at the history of different technologies and their introduction into various industries, combined with a rigorous data driven analysis, clearly demonstrates that no technology is a silver bullet solution and it takes significant additional investment and time to fully benefit from a new technology deployment. Try to keep this in mind next time you're planning a project :)