I already wrote a book review for Niall Fergusons’ The Great Degeneration. There is a quote of interest I wanted to explore. The context relates to the rate of innovation in the recent 25 years, compared to the previous 25 years, and the same period before that. In essence, Ferguson says that during times of war and unrest, as opposed to peace time, innovation seems to be more fundamental and the results more far reaching. I have to agree with this premise - though we would all argue that some innovations in the recent 25 years are important nonetheless. But there was a comment he made in relation to “IT”. It was this:
“The IT revolution that began in the 1980s was important in terms of its productivity impact inside the US…but we are surely now in the realm of diminishing returns (the symptoms of which are deflation plus underemployment due partly to automation of unskilled work).”
Before I comment on this point, there is another element that Ferguson looked at – regarding the growth of megacities (those with more than 10m people). He argued in his book that the network effect from such growing urbanization created more than exponential growth in opportunities for savings (efficiency), work (more complex interconnected businesses and specialization) and so on. I see our work on the Information Capabilities Framework akin to this concept. The ICF is a way to look at, govern and organize technology resources as a set of investments to manage its information through technology re-use. This is in contrast to what happens in most firms today, which is a manic focus on tools and vendors – even if they overlap in terms of information management capabilities. If you adopt the ICF approach, from a small beginning, it will, over time, provide a way to exploit network efficiency from increasingly rationalized technology in support of a standard set of capabilities.
Now back to the original quote. I don’t think the IT revolution that Ferguson referred to is over. In fact, his point is reminiscent of “Does IT Matter” that I had fun reading and marking heavily due to its over simplified arguments, intended to grab headlines and sell books. I think Ferguson’s point makes sense at the level of some forms of “computer processing” – that did have a big impact on productivity (his point re automation makes sense when you think of the typewriter banks that are now long gone). But just take a look at your own company. Do you have consistent information in all your business systems? Are you collaborating effectively with trading partners? Are IT investments driven from clear line of sight to business outcome of value? Is IT, yours or someone else s, able to answer business questions you have at the speed you need? Can IT even answer the questions you can’t even figure out what to ask, yet?
The reality is that IT has helped in all these areas, but we are not, on the whole, even half way through the IT revolution. Many businesses are cash rich, profitable. But if the competition is not that aggressive with its own strategies (as supported and instantiated by its own IT ‘DNA’), the dynamism in the market means that so many firms continue to plod along with “good enough IT”. If a firm did shake up its own IT DNA and figure out a new blue print for success, monopolistic opportunities abound.
So I think Ferguson’s argument makes sense, up to a point. Since I spend quite a bit of time inside “IT”, I can vouch that we have a lot more we could do. And I see a lot of challenges with “IT”. I truly believe IT can help with our country’s need to grow its way of its economic issues. And that means I have to end on another quote from the book:
“The lesson of history is that a country that achieves technology innovation and profitable geopolitical expansion can grow its way out from under a mountain of debt”.