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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (66624)8/23/1999 8:59:00 AM
From: Cynic 2005  Read Replies (1) of 132070
 
Contrary to expectations, productivity hasn't improved during the past decade. The amount of SG&A required to manage every dollar's worth of COG hasn't fallen, despite massive IT investments. There was a steady increase in SG&A from 1987 through 1993.

Though I show gains in the productivity ratio since 1993, the cost of information management relative to COG was still higher last year than it was in 1987 and 1988.

I completed a similar analysis for 16 of the largest U.S. banks. The declining trend in the ratio of revenue to payroll costs confirms a drop in productivity.

SIGNIFICANCE FOR CIOS

Information costs have risen, not declined, in relation to other production costs. Neither client/server, the Internet nor computer networks have so far materially improved the productivity of information handling by the premier U.S. industrial corporations. In 1996, $1.1 trillion in cost of goods required $300.5 billion in SG&A expense. That ratio is now lower than it was in the period from 1987 through 1990. I found a similar gap in the productivity for the U.S. banks I surveyed.

I consider this proof that productivity of the information-handling workforce, which now accounts for 59% of U.S. employment, has worsened, not improved.
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computerworld.com
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