The IT Productivity Paradox (2015)

Not sure if its a sufficient explanation, but I like what I&#x27;ve heard from Cal Newport about this. More and more self-service IT systems were able to replace a lot of jobs. But the result is that now <i>you</i> are responsible for doing things via IT systems that were previously outsourced to somebody else. E.g., you&#x27;re booking your own travel instead of using a travel agent. In some sense, things are more efficient because we don&#x27;t <i>need</i> travel agents. But also, things are less efficient because now you just have to do this task yourself. Do this across dozens or hundreds of discretely tasks and fields, and you end up with a society where everybody is doing everything themselves in a web browser instead of having some expert or professional to do it for them. So less individual time and focus is spent on your own area of expertise, and more is spent trying to figure out any number of confusing IT systems built to replace a &quot;less efficient&quot; human system.

I think a lot of this is down to too much choice. There are many papers on this in psychology, but for example, from [1]:<p>&quot;Findings from 3 experimental studies starkly challenge this implicit assumption that having more choices is necessarily more intrinsically motivating than having fewer. These experiments, which were conducted in both field and laboratory settings, show that people are more likely to purchase gourmet jams or chocolates or to undertake optional class essay assignments when offered a limited array of 6 choices rather than a more extensive array of 24 or 30 choices.&quot;<p>More computing power and tools gives us too much choice in how to use the tools: we&#x27;ve got dozens of software packags to choose from for every tasks, dozens of setups, etc. The users (workers) have to constantly choose how to use their tools and which apps to open for the day, etc.<p>It&#x27;s the same reason why people love minimalist writing apps. Their computer just presents too many options. Some people have even gone back to typewriters or writing by hand.<p>Computers aren&#x27;t really giving us too many benefits. If you closely examine the situations in which computers are purported to improve something, the only thing they ACTUALLY improve in a lot of cases is the advancement of new technology. If you&#x27;re a programmer or a software company, then new IT is good. But for people just using it as a tool? It sucks.<p>[1] <a href="https:&#x2F;&#x2F;psycnet.apa.org&#x2F;record&#x2F;2000-16701-012" rel="nofollow">https:&#x2F;&#x2F;psycnet.apa.org&#x2F;record&#x2F;2000-16701-012</a>

Sometimes in software it&#x27;s a problem that once a solution is encoded in software by an external party, innovation stops.<p>People inside the company with domain knowledge and who work with the tool daily cannot contribute anymore.

Bringing in IT is a form of optimization. Optimization needs to speed up hot spots. If you make something 1000X faster, but it only took 1% of the overall time in the system, then the gain is around 1%.<p>When you bring in IT, there are inefficiencies. Things that were done without IT have to be done with IT, so there are steps to prepare the input for the machines, and manage the information, and keep backups and all the rest. Some of those activities are new, not replacing another process. Or not replacing it with something less time consuming.<p>A clerk armed with a room full of filing cabinets won&#x27;t necessarily be able to handle that many more requests in a day, if that is replaced by a terminal and database. Suppose that during the average request, he has to spend 7 minutes talking with someone on the phone, of which one minute is spent with the filing cabinets. If we replace that minute with 30 seconds of working with the terminal and database, maybe that will go to 6.5 minutes. Or not. If the cabinet or database shuffling is done in parallel with chatting on the phone, it may make hardly any difference at all to the duration of the service episode.<p>You will not get anywhere near the theoretical gains from technology, with its blinding speed, until all the human steps are replaced. If there is a &quot;for each request x do ...&quot; loop in the operation, and each iterations has steps done by a human, you will not speed it up until you get rid of those steps. But at that point, the efficiency gain will no longer be attributed to a working human as productivity increase.<p>For instance, there is no question that the web has greatly increased the productivity of corporations in many customer service areas. The farm of servers works unattended, serving up all sorts of information to the users. Thousands of concurrent users. It does something that was impossible prior to the advent of the internet. Because no humans are actually sitting there serving the web requests, there is no human productivity measure.

I suspect that IT eliminates jobs that didn&#x27;t exist to begin with, and that&#x27;s where the paradox is explained. A company that previously wouldn&#x27;t have been cost effective to operate, now is cost effective because the jobs needed to operate it are eliminated and that makes its operation possible.<p>We can&#x27;t easily measure productivity gains in companies that didn&#x27;t otherwise exist (small businesses that can&#x27;t afford many mathematicians). And for big companies that could afford hundreds of bookkeepers, the gains would drag for years or decades behind since they would transition very slowly.<p>I&#x27;m not an expert though, so maybe I actually just don&#x27;t understand the issue...

The main curse as an IC is that your productivity is heavily dependent on outside forces - more so than many other industries imo (or, at least, would be more easily recognized as a management level problem elsewhere)<p>Like an artist who gets a contract to paint a house for a client but when (s)he arrives half the canvas is already wrecked by an offshore team... this is why teams have to put SWE candidates through 9 interviews as a single bad hire risks tainting the canvas for their colleagues

If IT investment brings low to no returns, what are we to make of the universal embrace of IT by the markets and absolutely humongous valuations and profits of the big tech? Are the markets being irrational for the last 50 years?

The point about workers using the new system to simulate the old workflow, even when it&#x27;s less convenient&#x2F;efficient is great. It&#x27;s very easy for the company deploying the system to do insufficient training and for the workers to just try whatever works to get going quickly in the initial phase. If you never check on them they might keep doing the suboptimal thing forever out of habit.<p>Then 2 years later you find out they have separate warehouse gate for each contractor because they never bothered to learn the functionality that lets them assign priorities to contractors. So half the time the warehouse uses like 20% of the warehouse gates for no reason other than lack of training :) Real story BTW.

Paperwork is probably similar. Generally reduces productivity for the individual contributors. But reduces the principal agent problem.

The Nicholas Carr &quot;IT Doesn&#x27;t Matter&quot; responses link 404s, the correct link is: <a href="https:&#x2F;&#x2F;www.nicholascarr.com&#x2F;?page_id=99" rel="nofollow">https:&#x2F;&#x2F;www.nicholascarr.com&#x2F;?page_id=99</a>. It looks like the original link used to redirect to this, but at some point the redirect was removed.<p>Archive link just in case that one ever goes away: <a href="https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20150213164505&#x2F;http:&#x2F;&#x2F;www.nicholascarr.com&#x2F;?page_id=99" rel="nofollow">https:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20150213164505&#x2F;http:&#x2F;&#x2F;www.nichol...</a>

We now have the equivalent of a TV-set on our desks. What would someone from the 60s think of that?<p>When I try to look up something for work, I am bombarded with distractions.

Yes, IT processes significantly differ from those in other areas and can&#x27;t be evaluated by the same methods - due to the complexities, hidden problems, and overevaluated expectations. For example, the known fact: adding a new member to a team doesn&#x27;t linearly increase productivity.Nowadays probably AI will help here :)

But then didn’t productivity sharply increase beginning in the ‘90s? And wasn’t much of that attributed to information technology? I don’t know what I’m supposed to learn from this website if they aren’t willing to compare - am I missing some part where they do this?

When you replace X people with a computer, you need to somehow create X job positions. As you need to employ all the people, but consumption is unlikely to rise further, you are by necessity stuck at identical productivity.

Why would you expect productivity to improve? It is only secondary goal! We measure metrics like skin color of employees, their gender identity, sexual orientation and political preference!<p>Investments are not about the money! That is so obsolete thinking!