Technology, Company, Efficiency and Resources are words that are associated when defining Productivity. In this article, we will try to bring you the basic aspects about the definitions and problems that should be taken into account when measuring the productivity of an organization based on technological changes.
The Growth of Productivity Supported by Technology
From the incorporation of the pen to the use of smartphones, all the varieties of technologies that we know have changed the way of working of human beings.
We could affirm that new technologies used, aligned with knowledge and business strategies, increase efficiency and productivity.
Why do we clarify “aligned with knowledge and business strategies?” Because technology itself will not add value to your company, on the contrary, the implementation of new technologies without a study of quantitative and qualitative benefits can produce a waste of economic and human resources generating results opposite to the expected: Low productivity, operational saturation, bureaucracy, etc.
Statistics Support the Relationship of Technology – Productivity
According to figures from the US National Bureau of Economic Research, during the first half of the 1990s, real technological productivity grew at an annual rate of 1.2%, although, it increased to 3.1% during the period between 1995 and 1999. The percentage of investment Technology (as part of the total investment) increased from 3% in the late 1980s to 6% in 1999.
Similarly in Europe, a study by London Economics shows that investment in Technology represented 25% total growth and 47% of the total increase in labor productivity during the period between 1992 and 2000 in the United Kingdom.
These figures suggest that a transition period is necessary before knowledge workers can fully utilize the tools offered by technology to increase their own real productivity. It also suggests that we are witnessing the benefits of technology in productivity.
Human Capital and its Preparation for New Technological Formats
The preparation of the human resources of the companies for the reception of technology is another one of the most delicate points to be worked on within the organizations. Several aspects must be taken into account within this point, starting from the distribution of salaries and according to the preparation that the worker must have. The growing use of technology has meant that many workers have to develop new knowledge or functions within their organizations.
The distribution of functions and knowledge generate an impact on the organizational structure that requires support from the Management of the Company and the Human Capital sectors to develop strong communication schemes with their employees, leveraging the development of their skills for the new challenges within of the company.
The Basic Steps to Measure Productivity
We can say that we are more efficient, that productivity improved, that the company uses its resources better, etc. but we should not rely solely on perception, but rather on indicators that we can measure and generating reports with results.
The definition of a Performance Indicator (Key Performance Indicator) on a process allows us to obtain performance values of the process and how the process “reacts” to changes that seek to generate benefits for the company. In this way, we can perform a sustained follow-up to determine if the applied adjustments are providing the expected benefits or if further adjustments are needed.
The indicators of “Productivity” are the most used when determining if a process on which a certain reengineering was applied with technological support, has generated economic and qualitative benefits for the company.
A study by Columbia University led by professors of economics Ann Bartel and Casey Ichniowki have shown, based on studies with performance indicators, the relationship of improvement in productivity with the correct implementation of technologies within organizations, highlighting the importance of the correct selection of the data that will be part of the indicators and their valid origin. At this point, it is essential that the veracity and accuracy of the data is met in order not to lose references and credibility on the information generated, a fundamental basis for technological growth and evolution and positive results within the organization.
Applied Technology + Productivity = Flexibility
The studies of the University of Columbia also showed that one of the consequences of the correct application of technology, not only with regards to better productivity because they also determined “Flexibility” in the structure of the Organizations that adopted these changes.
The reduction of the time devoted to certain processes, the training and adaptation of resources to new modalities and technologies have provided a level of flexibility (in times of adaptation) to the changes that companies need to be more competitive.