I suppose when these guys are done we'll have to recalculate all the productivity figures.

December 30, 2003
By Mary Jo Foley, Microsoft Watch

Microsoft Corp.'s brass has committed to doubling productivity in the coming decade from the levels achieved in the 1990s. But such a promise begs the questions: How (and why) do you measure productivity? And is measuring productivity as subjective as measuring total cost of ownership?

Microsoft and other industry partners, including Cisco Systems Inc., Xerox Corp. and McKinsey & Co., are gearing up to answer these questions—at least in part.

On Feb. 2 in New York, the Information Work Productivity Council (IWPC) will hold an invitation-only, daylong summit on the nature of business productivity. This event will mark the first time that the IWPC showcases some of the areas on which it has been focusing.

The council is sponsoring what it is calling the "Information Work Forum," which is designed to bring together academia, government and industry to discuss maximizing business productivity, profitability and performance through information work strategies, solutions and services, according to the invitation. The IWPC was founded a little over a year ago by Microsoft, Accenture, British Telecom, Cisco, Hewlett-Packard Co., SAP AG, Xerox and others. Microsoft's industry director for the IWPC, Susan Conway, described the council as "an independent group of companies and academics brought together to study the issue of information work based productivity and profitability."Jeff Raikes, Microsoft's group vice president of productivity and business services, has been the chair of the IWPC since its inception. The role is fitting, as Microsoft has developed an open showcase of the office of the future, called the Center for Information Work, which is part of the Redmond, Wash., company's headquarters.

The upper cap for the IWPC has been set at 14 members. All members contribute the same to the group: $150,000 per year plus labor to collect data at client locations, Conway said.

In April 2003, the IWPC parties designated the Massachusetts Institute of Technology's Sloan School of Management as the overseer for the IWPC research. Member participants committed to fund the IWPC Sloan Center to the tune of $4.5 million over a three-year period.

MIT isn't the only university participating in the IWPC. Others include Harvard University, the California Institute of Technology and New York University. But the council has more than 100 business-productivity-focused centers in operation, noted Conway, including a similar model for the study of e-business. (Other aspects of the IWPC research project will be carried out or sponsored by the council at the University of California at Berkeley and NYU.)

"The goal of the IWP Council is to build a model to measure information worker (IW) productivity in the information-centric business environment of the 21st Century," Conway told Microsoft Watch in an e-mail interview.
"Productivity gains in this decade and beyond will come from understanding organization capital (people, processes, infrastructures) and their enablers (technology and services). The IWPC's goal is to develop a set of metrics that will allow companies to map their business functions to technology and service enablers. This mapping should result in a measure of economic utility for technology/service spending."

Before the council can devise these metrics, participants need to agree on how to measure productivity-specifically, IW productivity, Conway explained.

"Productivity is generally considered-when producing products-a measure of the inputs/outputs (cost/revenue)," she said. "There are a number of complications when considering IW productivity that include the fact that both the inputs and the outputs are often intangibles. Secondly, IW productivity is intricately tied to human capital (people) and collaboration, both of which tend to defy discrete measurement."

In its first phase, the IWPC is looking to define information work and workers, Conway said. Then, the project will begin to analyze the enterprise and its functions in order to examine the flow of information through business.

While this data is collected by the members and their respective clients (against a process map designed utilizing the MIT Process Handbook research), the academic team, under the Center at MIT, will research critical topics related to information work, Conway said.

"Bringing these two investigative paths together ... will yield new insight into the nature of IW as well as form a basis for measuring information work at its intersection with standard business process," she added.

The IWPC also plans to investigate factors that have a negative impact on productivity, such as spam, Conway acknowledged.

(This is an updated version of an article that originally appeared in the May 6, 2003, issue of the Microsoft Watch newsletter.)