An IT expert talks to Inc. Technology about some issues important to growing businesses.
As a management consultant, writer, and former professor at Harvard, MIT, and Stanford, Peter G. W. Keen has long been providing insight into the impact of computerization on business. His latest book, Every Manager's Guide to Information Technology (Harvard Business School Press, 1995), lays out in a straightforward, high-level business context must-know computer and communications issues. Keen told Inc. Technology about some of the issues of particular importance to growing businesses.
On the most important technology investment:
Executives fret over the productivity of salespeople and administrative managers, but they don't think about the productivity of the people who matter most to the company -- themselves. The goal should be to gain one hour of effective work per day, and you should be willing to invest 40% of your salary toward that goal. I'm willing to throw away a laptop after three months. I've spent $50,000 on my PCs in recent years.
I learned my lessons from mismanaging my own consulting company. At one point I had 50 people working for me. I had 5 people doing nothing but graphic arts for my presentations. Eventually, I realized that I could replace 30 of those people with a single laptop computer. I can now do 300 slides in four days; it used to take my 5 people three weeks. For $1,200 worth of on-line time on Dow Jones and America Online, I can collect more information on international companies in a day than my staff could have in a week.
On the challenge facing smaller businesses:
One of the strengths of small businesses is that they don't have to have a chief information officer. Large businesses have complex internal operations and big information-processing systems, and a CIO has to stand between the systems and customers to make sure the systems are coordinated. A small business can start building technology from the customer on back.
The lesson for small companies is that someone must think about enterprisewide computing, not just individual applications. The only person who can do that is the guy at the top.
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On the hidden costs of computers:
You have to build a sort of information utility that keeps things running behind the scenes. The utility includes the ability to integrate different types of hardware and software, central repositories of data, education, support, maintenance, and more. Although the desktop part of computing is very visible, the utility part represents at least 80% of the cost of computing. Growing companies typically have no clue that they have to budget this way.