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Description
CIOs have long used improvements in productivity and efficiency as the primary justification for technology investments. However, data on overall US productivity as well as industry-level productivity shows little improvement in real output per worker since 2012, despite increasing tech investment. This trend is likely to continue due to the challenges of improving productivity in small and midsize companies and in personal services industries as well as the rising share of tech spending going to areas that have little or negative impact on productivity. CIOs should instead look to technology to improve effectiveness of outcomes.
Key takeaways:
- CIOs still have many opportunities to use technology to improve productivity.
- Trends in overall productivity suggest that those opportunities are shrinking and being confined to a small proportion of large companies that are very effective in implementing new technologies.
- Improving productivity in the personal services sector, which is a growing share of the US economy, is particularly difficult.
- While some Forrester analysts believe AI and robotic process automation will change this outlook and lead to faster and more widespread gains in productivity, the recent record does not yet show evidence of this happening.
- CIOs should emphasize the effectiveness gains from tech investment over the productivity gains.
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