Today we are surrounded by technology. Everyone has a computer on their desk. But what are we using them for and are our businesses always better off because of them? Or are we just doing things differently rather than more efficiently?
When I first started my career in IT working for Swiss Bank Corporation in 1992, my team leader commented that our job was to basically make people redundant and how did I feel about that. I must admit that I hadn’t thought about it like that but saw my team leader’s point. IT is all about improving efficiency and productivity which can often lead to doing more work with less people.
One of the first big corporates who used IT to make their business more efficient was J Lyons and Co who started building their own computer in the 50s. Now Lyons wasn’t a computer company but was a leading catering and food manufacturers and was best known for their chain of tea rooms which began in 1894 and finally closed in 1981.
However they saw how a computer could process their payroll and manage their inventory more efficiently and faster than humans. The computer Lyons built was called Lyons Electric Office or LEO. The computer was so successful that Lyons allowed other companies to use it and eventually started LEO Computers Ltd. This company evolved and finally merged with ICT and became ICL in 1968 which was bought out by Fujitsu.
Since the pioneering work of Lyons, business has changed a lot because of technology, but how many of those changes result in making things more efficient or just different?
For example, in pictures of offices in the 50’s and 60’s, you often saw a tea lady. What happened to them? Well vending machines came along and they were cheaper but wasn’t the coffee and tea awful. So the tea ladies lost their jobs and we got crappy brown liquid to drink. But then came Starbucks and Costa coffee so are things more efficient now or simply just different? Another example came with the advent of the Word processor. Offices used to have secretaries who typed letters which was a real skill that required training at college.
However because a Word processor allowed the user to make many mistakes and helped with spelling and layout, the managers were made to type their own letters and the secretaries, like the tea ladies, became extinct in the name of progress. But was this progress? Having highly paid managers doing the job of cheaper employees doesn’t sound like great economics to me?
So you have to be careful about using IT and really ensure it is not just making things different, but actually improving your efficiency as an organisation.
A major IT innovation of the last 10 years is the internet and this is where you can build massive efficiencies. It allows you to find new customers and interact with your existing customers in very efficient new ways.
For example, one of our customers was an industrial bakery supplying catering companies
However we noticed that they had a sales desk which comprised of 3 people who took orders over the phone. We suggested that a more efficient way of taking orders would be to take orders over the internet using a website. We suggested that they probably wouldn’t need 3 people, maybe only one if two thirds of their customers ordered online. They decided to keep the 3 people and continue to take orders by phone.
Within a year the company had gone into administration, apparently they couldn’t compete on price, their costs were too high. I’m not saying making the 3 people redundant would have saved them but I wonder where else they could have made savings and whether their competitors were doing this too.
So should IT all be about making redundancies? I think so. Actually you don’t make people redundant, you make jobs redundant and if a computer can do it better than a human then the job is probably repetitive and boring.
In this highly competitive world, then surely it is better to lose a few boring jobs than to have the entire company go under. I also like to think that by using IT efficiently, a company can grow without having to take on as many staff as they would if they weren’t using IT efficiently. To maintain the UKs economic position in the world, it is vital our companies are operating at the highest level of efficiency and productivity to fight off the competition from companies with much cheaper labour costs.
Thanks for reading.
Dr James Leo