The short answer is yes. Information Technology can be used to improve productivity. But to realize these gains, we first need to understand the components of productivity.
Now, productivity is a measure of how efficiently inputs are turned into outputs. For example, how efficient is the manufacturer’s production line in transforming raw materials into saleable goods? or, how streamlined is the collation of data that goes into all of those reports we produce?
So, what are the factors that affect productivity:
- leadership and management
- workplace culture
- technology
- skills
- process organisation
- networking and collaboration
- metrics
So, of these seven aspects of productivity upon which ones can information technology have a bearing.
Skills are a good place to start. A low cost and effective way is training to improve the use of the IT already in place. How well are people using spreadsheets, your line-of-business applications and reporting tools?
Process organisation. Quick wins can be had by using IT to improve the flow of information. Remember, IT is technology for handling information. For example, is data entered twice by different teams? Or, why can’t smartphones be used for inventory management?
Technology. Not just IT, but the innovative use of technology. It is a given that the appropriate investment in technology will pay dividends.
Collaboration. The exchange of ideas and information with others in the industry. Whether they be blogs, social media or smartphone apps, there is an abundance of IT to support and improve collaboration and technology.
Metrics. This is the measurement of, and the reporting on, key characteristics of organisational performance. IT, if used appropriately, can definitely assist in the gathering, analysis and dissemination of critical information.
Leadership. Its all about setting the direction and tone of the organisation. Leadership and management that is open to innovation, open to new, open to change and improvement will see IT as an investment. An investment that leads to both reduction in costs and an increase in profit.
Culture. In this age of a rich information technology society (Facebook, smartphones and WiFi to name three), investment in contemporary IT together with user training and an innovation mindset will lead to productivity improvements.
In summary, the answer is yes. Investment in IT does have a positive impact upon all of the factors of productivity.
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IT Considerations 
Hi Paul
a great post again. I think this topic isn’t considered enough. IT can help, but only if you know what you need. IT as an end in itself hasn’t been a great success or value proposition.
I usually look at how effective things are. This goes beyond efficiency and can alter how you measure productivity.
I am often asked about automation. My usual starting point is that it depends. Automating a mess just makes a bigger mess faster. But automating the right things the right way can be enormously helpful to a business.
Efficiency is doing things the right way. Effectiveness is doing the right things the right way. Working out the right things to do is the key.
As an example, a website attracts 1500 visitors a month but only manages to convert 2 visitors per month into prospects and the business fails to close either. This is the normal pattern. And SEO company may offer to increase your traffic by 10x. So now you will have 10 times as many leads to not close. No effective. Fix the sales closure issue first, then there is a point in increasing the traffic. Maybe you aren’t attracting the right people, maybe you lose them at a particular page or point in your process, maybe you have no idea who they are or how they go to you. Maybe you just aren’t being clear about what you want them to do next. Maybe the web developer just put a site together for you and you have no idea what you really need. Whichever it is, fix the core issue, get something working, then amplify it.
This is where IT can really kick some goals. Once you have something worth amplifying, it can provide the leverage to do that and without you (or one of your staff) having to personally do it all.
Ray Keefe
Successful Endeavours
http://www.successful.com.au