Successful companies recognize that information technology can fundamentally alter the very nature of work. Such a transformation, however, often requires that an organization rethink its corporate strategy and remake its basic structure and processes — a task that one Fortune 500 CEO compared to “changing the tires on a moving car.” Looked at in this way, the so-called productivity paradox articulated in 1987 by Robert Solow — “you can see the computer age everywhere but in the productivity statistics”1 — becomes less mysterious. In fact, though, computers do affect productivity — and they do so to the extent that organizations adapt their internal structures, processes and culture to extract the greatest value from the technology. The data show a clear divide between companies that effectively change their organizations and those that do not. Laggard firms can live off their momentum and existing customer base for a while, but eventually a competitor will offer customers a significantly better product or service.
In this sense, IT is like steam power in the 1800s and electricity in the 1900s — a general- purpose technology with long-term impacts on the nature of production and consumption throughout the economy.2 But IT has become affordable, and thus ubiquitous, much more quickly than those earlier advances. Since the late 1950s, the price of computing power... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
