Technology Doesn’t Automatically Make a Business Better

In 1987 the economist Robert Solow remarked that the computer age could be seen everywhere except in the productivity statistics.¹ The line became known as the productivity paradox, and economists spent years debating its causes.

You do not need to settle that debate to take its practical lesson: adopting a technology and benefiting from it are two different events, and the second does not follow automatically from the first.

Where the value actually comes from

A new system does three things at once. It makes some tasks faster, it makes some tasks unnecessary, and it makes new kinds of work possible. Most organizations capture only the first. They automate the existing process, keep the old approvals, the old reports and the old structure, and are surprised when the results are modest.

The larger gains usually require changing the work itself: who decides, what gets measured, which steps disappear.

Questions worth asking before you buy

1. What decision or outcome will be different six months after this is in place?
2. Which existing task, report or meeting should stop because of it?
3. Who owns the change in how work is done — not the installation, the change?
4. How will we know if it isn’t working?

Why it matters

For small and growing businesses especially, every tool carries a cost beyond its price: training, integration, maintenance and attention. The best technology decision is sometimes a better process using the tools you already have.