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|In: Industry Commentary|Last Updated:

This New Year’s column marks my second anniversary with InfoWorld. When I started writing the IS Survival Guide in 1996, my biggest worry was running out of topics. My editors worried that I’d run out of ManagementSpeak.

Don’t worry. Every week readers send me more strange things managers say than I have room to print. It’s one of my perks. And because managers are such interesting critters, and management is such an interesting subject, I’m not likely to run out of topics any time soon either.

This week’s topic: A New Year’s retrospective — something of a tradition for columnists. Although the IS Survival Guide isn’t in the predictions business, I did make a few. For example, I predicted the non-success of the NC. Pundits now discuss the NC as a 3278 replacement, not as an enterprise desktop architecture. Next year will nail it. (And no, the NC isn’t a thin anything, since NC code execution is on the desktop.)

In the same articles I predicted that Java wouldn’t maintain its cross-platform portability. Sun is currently trying to keep the … well, the sun from setting, to coin a phrase. Proprietary platform-specific extensions already exist.

And then there’s the risky one: I stuck my neck way out once last year, predicting that because Microsoft has stretched itself so thin, within a couple of years it will experience serious reversals. We’ll make the millennium my deadline. (Of course, it won’t matter because by then the world really will have ended.)

But enough remembering past futures. It’s time for new predictions. So …

Prediction No. 1: The triumph of American culture … in America. Although the Internet is a global network, it has a peculiarly American flavor to it — anarchic, unfettered, and individualistic. This terrifies American authorities, but it’s too late.

Other countries are trapped, as well: Keep the Internet out to preserve your “cultural purity” and you damage your economy. Let it in and voila! Americanization.

Prediction No. 2: The globalization of American culture. Staying down on the farm will be hard when we have the world at our fingertips. An unsettling example: Digital Detective Services estimates that as many as 25% of all American workers store erotica on their computers. I’ll be sexist and assume most are male, which means nearly half of all males not only enjoy erotica but act on the impulse.

American culture keeps this impulse in the closet, as it were. We worry in public about porn on the Internet. We claim it’s to protect our children, who ought to be seeing more wholesome fare like Robocop, since the depiction of harmful, painful, and illegal actions is far healthier and more wholesome than watching two people having fun. Other cultures take a far different view of erotica. At some point, Americans may find those perspectives invading our cultural space.

Prediction #3: The PDA market takes off. I got a bunch of e-mail from my column bemoaning the loss of the personal computer. In it, I described how PDAs could become the next PC, and described the characteristics they’d need to do so. From what InfoWorld‘s readers tell me, the Palm Pilot and current generation of Apple Newtons have all of those features between them, although neither has them all. It looks like we’re one generation away from getting truly personal computers back in our hands. By the way, who decided to call PDA Windows “WinCE”? An apt name.

New ideas for 1998

Enough prognostication. Now I’d like your help with something.

I generally write about topics that make me cranky. It’s cheaper than psychiatry and better than St. John’s wort. I want to help you too, though, so lie down on the couch over there and let me know your biggest issues, concerns, and causes of heartburn.

Think of it as group therapy.

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|In: Industry Commentary|Last Updated:

When I was the PC czar for a previous employer, I’d annually have to explain our spending “all this money” on PCs when we’d just spent “all that money” on PCs the year before. I hauled out all the usual arguments, and some unconventional ones besides … all to no avail.

The CFO had prepared counters to the usual arguments, of course, and became irritated at the unconventional ones. Like most executives, he disliked surprises; like many, he found countervailing facts and logic irritating once he’d made a decision. Finally, he presented his clincher: “If PCs increase productivity so much, why hasn’t our headcount dropped?”

When I expressed doubt as to the validity of headcount reduction as a useful measure of productivity improvement, I was told we lacked a good measure of productivity, so he was using that until we got one.

Recognizing the futility of argument, I changed the subject (until now).

Computer backlash seems to be picking up steam again. You can find good examples of this gleeful technology bashing in the writings of Paul Strassmann, whose new book, The Squandered Computer: Evaluating the Business Alignment of Information Technologies, received a glowing send-up in the September/October issue of Harvard Business Review.

Strassmann’s arguments go something like this: Computers are supposed to make companies more productive. If companies are more productive, their sales, general, and administrative cost (SG&A), indexed by the cost of goods sold (COG) ought to have decreased over time. SG&A per COG dollar hasn’t decreased over time, so the benefits touted by IT advocates are, in the terms of Michael Schrage’s HBR review, “… the big lie of the Information Age.”

Every big lie requires a big liar, and since nobody else seems to be around, I guess I’ll have to assume the mantle of responsibility and do my best to perpetuate this big lie.

Strassmann’s argument contains a fatal flaw: There’s no reason to expect SG&A (accounting lingo for overhead) to decrease when you invest in IT. None. Why would it?

You see, capitalist societies include a complicating business factor called competition. It’s a complicated concept, but I’ll try to simplify it. Competitors, you see, are companies that want the same customers you do, and they’ll work hard to get them (unless the company is Novell or Apple, of course, in which case they’ll work hard to give Microsoft their customers … but that’s a different story).

Competition confounds simpleminded productivity measures. Product quality, for example, doesn’t remain constant over time in a competitive environment — it improves or the product fails. And around these quality improvements companies have wrapped extensive service offerings. Why? To stay in business, because their competitors were busy wrapping extensive service offerings around their higher-quality products.

As documented here earlier this year, service isn’t enough either. (See “What customers buy,” 8/11/1997.) Progressive businesses add entertainment dimensions to their products and services; transform sales and marketing into affinity enhancement programs to move from mass marketing to mass one-on-one marketing; and “molecularize” everything to transform manufacturing from mass production to mass customization.

None of this comes cheap. These programs require significant investments in IT. Companies that don’t invest fall by the wayside; those that do stay in business so they can play the game again next year.

So here’s my challenge to those who claim IT investments are worthless: Find one company — just one company — in a competitive industry that’s succeeding while keeping the books on ledger paper, typing correspondence on IBM Selectric typewriters, and managing inventory on index cards.

It’s the nature of competition that you have to keep running faster just to stay even. The measure of IT value, then, isn’t SG&A over COG. The proper measure of success is simply staying alive.

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