Cracking the productivity code

Australian businesses need to work smarter, not harder if they are to crack the productivity code and while technology is a major driver in helping them achieve that goal it is no longer seen as the ‘magic bullet.'

That's one of the key messages to come out of the Telstra Productivity Indicator 2012 report, which highlights that building productivity isn't just about pumping money into ICT but requires a thorough  understanding of how to best utilise the pervasiveness of technology in today's enterprise space.

The report, now in its fourth year, surveyed 700 large Australian organisations across the government and private sectors and illustrates why overturning a decade of declining productivity is no simple task despite the best intentions of management and having the best technology at hand.

While ICT spending levels remain consistent across the board, the number of organisations recording productivity gains in 2012 has dropped by a quarter, from 32 per cent to 24 per cent, compared to 2011.

According to Telstra's director of strategy and business, Antony de Jong, the trends of mobility, cloud computing and storage and the proliferation of smart devices in the workplace have forced organisations to pay closer attention to their impact on performance.

“There's a big connection between productivity and a greater engagement with the workforce, it's not just about giving them staff the new tools it's also about staff training and performance.” de Jong says.

One of the features of the report is the distinction it draws between those organisations that have implemented a specific strategy to measure and quantify productivity improvements (leaders) and those that are yet to sign off on a formal process (followers).

According to de Jong, the leaders are starting to put an emphasis on people and collaboration, targeted investment in ICT and a focus on innovation to deliver business outcomes.

When it comes to ICT investment, the principal focus is on mobility as organisations respond to the needs of their staff that is slowly gravitating towards remote working and use of multiple devices. That is closely followed by investment in broadband/ IP network speeds, coverage and performance.

Unsurprisingly, the cloud computing message is finally being heard loudly and clearly across the country, with the technology seeing the greatest uptake from previous and future investment priorities.

While the apprehensions around cloud have not exactly evaporated, de Jong says that the opportunity promised by the technology is starting to be realised.

He adds that the shift in attitude isn't simply driven by cost cutting but companies are actually starting to see tangible productivity benefits.

“It's not just an equation on the cost side, when you ask companies what benefits they have derived from their cloud investment they tell you that it has given them the ability to develop new  IT offerings and products quicker.” 

Another interesting feature of the latest Telstra report is the increasing investment by organisations in managing, distributing and receiving HD desktop and mobile video content, with 64 per cent of businesses saying that they will invest more money into video-conferencing solutions to boost productivity.

Realising video's full potential

Apart from the cost savings on offer, de Jong says it's the functionality of today's video technology that is proving to be an attractive lure for organisations, because it feeds into their need to build a more collaborative workspace and foster faster decision making.

“It has taken a long time but video technology is yet to realise its full promise in both sectors.”

The influx of technology is and will continue to change the management structures and styles within organisations because collaboration and engagement are now the two key paradigms that can deliver a competitive edge.

The role of the CIO and CTO is shifting away from guardianship to one that focuses on integration of technology into decision making and work processes, which in turn lift productivity.

Improving productivity may still be the top priority for organisations but there is plenty of work needed and de Jong says that there is plenty of room for improvement.  

“There are lots of areas where you still can't get 24/7 access to information, you still have to follow manual paper processes, there's data duplication and appointment times are still done over the phone months in advance,” he says.  

According to de Jong, it's these day to day things that highlight the sort of barriers that still need to be surmounted and while organisations have the tools to remedy these situations, there's still not enough investment in some cases, particularly in the public sector.

“There aren't as many smartphones and tablets deployed in the public sector compared to the private sector, in some cases government policies are also a constraint,” he says.

Meanwhile, investment in the private sector has to some extent been stymied by economic jitters, especially in the retail and manufacturing sector.

What's interesting is that a period economic uncertainty more often than not proves to be a catalyst for innovation as it forces companies to become more agile. Technology is a clear driver in leading that transformation but as de Jong points out that the emphasis shouldn't be on cutting costs but on developing a strategy that leverages the benefits of technology across every level of an organisation.

“You can get into a very negative space when it comes to productivity, especially if it is seen as a one-shot slash and burn exercise,” he says.

If Australian businesses are serious about lifting themselves out of the productivity quagmire the gap between the leaders and followers needs to be closed and to do that they need to think through the entire efficiency equation and how technology fits into that picture.