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The IT Productivity Paradox (2015)

cs.stanford.edu

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Re: The IT Productivity Paradox (2015)

#21

Post by trimethylpurine »

I suspect that IT eliminates jobs that didn't exist to begin with, and that's where the paradox is explained. A company that previously wouldn'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.

We can't easily measure productivity gains in companies that didn't otherwise exist (small businesses that can'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.

I'm not an expert though, so maybe I actually just don't understand the issue...

Re: The IT Productivity Paradox (2015)

#22

Post by Rutjjt »

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!

Investments are not about the money! That is so obsolete thinking!

Re: The IT Productivity Paradox (2015)

#23

Post by Jtsummers »

jurschreuder wrote: post #7

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

Ossification. The same thing happens with laws and regulations. It moves the knowledge and activity from one of expertise and judgement to a ruleset. Changing a ruleset is hard because you have to play within the bounds of the other rules (which may include rules for changing rules).

The expertise in the ruleset also falls away over time as people become increasingly reliant on the software system. Eventually the software becomes the definition of the rules, and any changes to the rules have to be changes that someone today can figure out how to implement. If they can't implement it, the rules can't change.

Then you get a big-bang rewrite because everyone is frustrated (or they move to SAP, and are frustrated for other reasons). The rewrite neglects a bunch of edge cases already accounted for in the old system, it takes a decade to finally retire the old system (hopefully), and then in another decade they repeat the process because the expertise is, again, lost.

Re: The IT Productivity Paradox (2015)

#24

Post by xandrius »

intelVISA wrote: post #12

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) 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 i…

The "9 interviews" quote irks me so badly: you're telling me that a modern company can have a "bad hire" actually causing any damage? What are code reviews, retros, and standups for?

I think current tech interviews (with unpaid take home exercises, live coding, tech quizzes, etc.), are just a really inefficient and ironically lazy way to decide who to hire.

A company could temp-hire 3 different people (anyone who applied and could talk about their past projects), pay them for 1 month and you evaluate them then. At the end of the month, you decide who to keep.

You might fail to pick a great candidate or maybe not but at least you give people a fair chance to get assessed in the job and not on a little dance everyone needs to do just to get into the door, which just wastes everyone's time.

That also allows the candidate to show how they truly are, both skills, learning a new workflow and culturally. Right now, it's just a matter of performance and luck.

/rant

Re: The IT Productivity Paradox (2015)

#25

Post by tvanantwerp »

Not sure if its a sufficient explanation, but I like what I'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 you are responsible for doing things via IT systems that were previously outsourced to somebody else. E.g., you're booking your own travel instead of using a travel agent. In some sense, things are more efficient because we don't need 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 "less efficient" human system.

Re: The IT Productivity Paradox (2015)

#26

Post by nine_k »

vouaobrasil wrote: post #5

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]: "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 gour…

I can't agree.

While computers of course have a ton of shortcomings and difficulties, they allowed easy access to and sharing of information. Collaboration has become much, much easier. To say nothing of plain communication, by text, voice, of video calls. If you think computes suck, try going 50 years back and do a long-distance call (and then pay the bill).

The same thing immensely powered commerce, both online stores, and plain brick-and-mortar stores where you pay by your card. I suspect that productivity gains in the commerce / retail sales area should be very noticeable.

The general meager observed productivity gains may be a result of the way they are observed (much like Amazon is a company with near-zero profits, such a terrible malinvestment!) and how they are distributed. The latter may mean not just siphoning monetary gains, but also changing patterns of control within corporations.

Re: The IT Productivity Paradox (2015)

#27

Post by adrianN »

xandrius wrote: post #24
intelVISA wrote: post #12

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) 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 i…

The "9 interviews" quote irks me so badly: you're telling me that a modern company can have a "bad hire" actually causing any damage? What are code reviews, retros, and standups for? I think current tech interviews (with unpaid take home exercises, live coding, tech quizzes, etc.), are just a really inefficient and ironically lazy way to decide who to hire. A company could temp-hire 3 different people (anyone who app…

Process can prevent a small fraction of bad hires from doing much damage. Once a critical mass of bad employees is reached the process stops working.

Re: The IT Productivity Paradox (2015)

#28

Post by marcosdumay »

DenisM wrote: post #15

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?

Some uses of IT clearly bring "competitiveness". But this is a microeconomics concept, and while it happens, the macroeconomic "productivity" does not increase.

And yes, that difference is very hard to explain. One of the main sources of competitiveness (and the only that should be most clearly impacted by IT) is productivity.

Are measuring things wrong? Is there some other effect of IT that reduces the productivity to compensate? Is there something else happening that confusingly takes away all the gains from IT? (Perfectly correlated, for 50 years!?) Does plain logic break down due to some mechanism that nobody has found yet?

Nobody is certain about the answer, but theories abound.

Re: The IT Productivity Paradox (2015)

#29

Post by Scarblac »

xandrius wrote: post #24
intelVISA wrote: post #12

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) 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 i…

The "9 interviews" quote irks me so badly: you're telling me that a modern company can have a "bad hire" actually causing any damage? What are code reviews, retros, and standups for? I think current tech interviews (with unpaid take home exercises, live coding, tech quizzes, etc.), are just a really inefficient and ironically lazy way to decide who to hire. A company could temp-hire 3 different people (anyone who app…

> A company could temp-hire 3 different people (anyone who applied and could talk about their past projects), pay them for 1 month and you evaluate them then. At the end of the month, you decide who to keep

But who would agree to join a company that has a procedure like that?

Most people looking for a job are either already in one, or have several ongoing job applications, or both.

Re: The IT Productivity Paradox (2015)

#30

Post by ajuc »

The point about workers using the new system to simulate the old workflow, even when it's less convenient/efficient is great. It'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.

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.

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