An interesting article by Andy Kessler, author and former hedge fund manager, published October 7th in the Wall Street Journal suggests that we may be in line for a big uptick in business productivity soon. It will be the result of what he terms a Forklift Upgrade in modern business computing.
In his article, Kessler posits that we are now embarking on the fourth major era of computing. He counts mainframes of course as the first, which “automated back offices and transactions, bringing efficiencies and lower costs.”
The second era was marked by the desktop era of the 1980s and, in particular, the 90s. Essentially, a lower cost option to do many of the same tasks mainframes did (with, we might add, the added benefit of vastly enhanced personal productivity gains: think spreadsheets). The third era was the Internet era, with the web allowing us to buy goods and services “through the magical Internet.”
Now we’re moving into the mobile era, or stage four. There are now more mobile users out there than desktop users, including nearly two billion people using the web on their phones. It’s a computer in your pocket, always there when you need it.
In the business world, companies are rethinking their entire infrastructures. We see it all around us. Microsoft recently at its Microsoft Dynamics NAV “Directions” conference touted – heavily – its new catchphrase “Mobile first. Cloud first.” Companies are moving some functions already to the cloud. Mobile is everywhere (including ERP solutions now bringing their supply chain capabilities to pads and phones). Companies running on infrastructure built in the 80s, 90s and 00s, are now “figuring out that they need a mobile and cloud platform to save money and offer a better service.”
This is where the “forklift upgrade” phrase comes into play, according to Kessler: “Companies lift and remove the existing system and drop the new in place.”
As the author points out, this takes much planning. In our own dealings with clients, we’re finding that process analysis, process reengineering, education and workflow improvements – all ultimately aimed at leaning the firm out – are at the foundation of all this change. The challenge then becomes to find appropriate systems, software, technology and new processes to supplant the old, reduce the redundancies and the separate silos of information — in turn making companies more competitive and able to offer goods “better, cheaper, faster.”
Kessler points out that while these well-thought-out changes have resulted in a temporary lull in in capital spending, that’s about to change. These changes are difficult, expensive and “too important to mess up.” The technology must be made to fit the business purpose (always!).
But as it does occur (and it will and, in many cases, already is…), companies will start growing faster “as lower costs work their way through the enterprise.” As profits increase, companies reinvest. They use their cheaper technology to hire and gain market share. And the cycle feeds on itself.
Given the (several trillion dollar) size and scope of the tech changes rising today, in the transition to a mobile and often cloud-based world, the global economy will head right there in stride.