“For every dollar of investment in computer hardware, companies need to invest up to another nine dollars in software, training, and business process redesign” – according to a study by Erik Brynjolfsson and Andrew McAfee quoted in ‘The Second Machine Age‘.
This looks first as a warning to budget adequately when buying computer hardware! In reality, it is a measure of the leverage into business improvement that is provided by computer capabilities.
And it is true that investment in new hardware or software always leads to business and process investment, and eventually to business improvement (which is required to justify the investment in the first place). Even if process improvements are not immediate due to change management considerations, it will happen eventually when the organization’s contributors will realize the capabilities that are now available to them. I believe it is typical in professional business software implementation to see professional fees to be up to 3 or 4 times the license investment; and obviously the leverage ratio is even higher on hardware investment.
Investment in computing capabilities always leads, sooner or later, to business improvement. It is one of the main driving forces of today’s productivity improvements that will make the Collaborative Age much more efficient.
