Chris Barton: Productivity - the hard sell

COMMENT

Microsoft faces a difficult sell with Office 2003. Not that the latest version of its ubiquitous software suite doesn't have some fine features.

It does, particularly in the way Outlook organises email, and the research pane in Word is quite cool.

But such skin-deep improvements miss the point of the new "Office System" which, to unleash its potential, needs "back end" server products like Exchange, Internet Information Server and Share Point. That's why it's called a "system" - because you can drill into internal and external information from "front end" products like Word, Excel and Outlook.

So why should such a sensible concept - linking to, and sharing, information held on servers - be such a hard sell?

Cost is the first hurdle because companies have to buy the whole kit and caboodle - the server software and the Office suite.

Retail pricing for Office Small Business Edition, for example, is $999, or $599 if you're upgrading. Then you've got to add server products such as SharePoint Portal Server ($13,903), Project Server ($3691) and Exchange Server ($3205).

Such buying entanglements are a common Microsoft ploy. But increasingly businesses are wary of the lock-in they create.

Witness the outcry at Microsoft's "Software Assurance" plan, unveiled in May 2001, which essentially took away cheap software upgrades and replaced them with a three-year subscription-like service that requires businesses to update their software more rapidly.

Despite the bitter pill, most businesses took the medicine. Why? Because Microsoft offered an early bird special and upgrading at a later date was even more expensive.

But, faced with the prospect of a hefty bill for Office System, companies are naturally going to ask what the benefit is. To which Microsoft will reply increased business productivity - with the emphasis on "business" rather than individual productivity.

It's a new twist on an old concept: that using computer technology gives productivity gains - more output per hour of labour - allowing production to rise while payrolls contract.

Proficient computer users know this to be true. With the computer, the daily grind can be done more quickly, leaving time to do more. Or, to put it another way, computers make it easier for us to work ourselves to death.

But for a long time the so-called productivity gains didn't show up in the statistics - an oddity that had economists musing about the "productivity paradox".

In fact, despite the massive investment in IT, productivity growth in most countries actually slowed in the 1980s and early 1990s.

But in the second half of the 1990s in America at least, it started to increase and has continued to do so despite the economic downturn - growing by an average of 3.3 per cent over the past five years.

How can there still be productivity growth even when investment in information technology has fallen from its late-1990s peak?

The question is difficult to answer because there is considerable debate about how much information and communication technologies have contributed to productivity and how much has come from other areas such as new management and business processes.

Historians will tell you new technologies do not automatically lift productivity - you have to learn how to use them before you can reap the rewards. That, apparently, is what we're doing now. All that money forked out in the last decade on Microsoft upgrades is actually beginning to pay off.

So if that's true, why pay out for yet another upgrade? We know Office helps us automate manual processes and squeeze time and cost out of the equation - it's a message we've been hearing since 1989 when the first Office suite was released.

Microsoft is not alone in promoting the new mantra - that productivity gains come with technology that harnesses worker collaboration and collective access to internal and external information.

For Microsoft that means smarter use of email, business use of online chat and employing extensible markup language (XML) to format files and documents to ensure a common standard for access.

Entrenched rivals such as IBM, Sun Microsystems and Novell, and newer competitors like PeopleSoft and RedHat, are saying much the same - but pitching networks that blend a variety of non-Microsoft server systems on the back end, with free open-source code Linux and OpenOffice on the desktop - replacing Windows and Office for significantly less cost.

The common thread for both Microsoft and its competitors is XML - the technology that translates different computing languages to make it easier for machines to share information over the internet.

While there's a lot to be said for such an approach, increasingly sceptical businesses are going to be difficult to convince. Especially companies that don't need much more than basic word processing, spreadsheet and email functions for most workers.

You can see the possibilities of XML in Microsoft's research task pane, a window to retrieve and navigate relevant internal or external web-based information from within Word, Excel, PowerPoint and other Office programs.

The task pane lets users with an internet connection look up words in a dictionary or encyclopaedia, or search a library of news articles through a subscription with the Factiva news library. Sounds useful.

Less convincing is Microsoft's deal with Amazon.com to sell products directly from Office programs without opening up a web site. Someone reading a Word document about skiing, for example, could click on the word and see a list of Amazon's books on the subject, ready for purchase. Or a user reading a bibliography in a Word document could click on a book title and purchase the book.

You have to wonder how such a tool - shop while you work - will impact on worker productivity.

Which highlights just how difficult it is to make the productivity-through-technology equation add up.

Workers with new-age tools get plenty of benefits. But there are also quite a few unproductive side effects such as frittering away time cruising the web or on irrelevant email and online chat - not to mention spam, and downtime due to software glitches and viruses infections.

Then, just when you think you've got your productivity honed and humming, another survey comes out that says something different. Like the NEC one last week that says multi-screen computing not only increases productivity but also makes employees happier. Apparently accessing more information and images simultaneously allows for more efficient multi-tasking between applications. Time to fork out on a couple of flat panels. Productivity gains always come at a cost.

* Email Chris Barton