In the past decade, productivity of the manufacturing sector in the US has risen at 4% a year; in other words, the value of market goods per worker has increased by 40% over the decade. In manufacturing, the US continues to lead the world in productivity. But over 75% of the jobs are in the service sector of the economy -- retailing, banking, finance, insurance, medicine, education, governments, and the like. Over the same decade, productivity in this sector declined 3%. This decline has happened in spite of a trillion-dollar investment in information technologies for this sector, typically 1-4% of an organization's budget (Drucker 1993).
Some people call this a crisis. Whether it should be called a "crisis" or a "slow learning curve", it is a phenomenon many people would like to reverse. Redenbaugh (1994) says there are two reasons for it: we are not observing and measuring the right things and we are not automating the right things. Our ways of measuring productivity, derived from our manufacturing heritage, are concerned with watching the movements of things that are combined and transformed into products. In most office work, the "things" are data and their conveyors are paper and information systems. The production and movement of paper and data has been automated with such devices as word processors, spreadsheets, databases, laserprinters, copiers, faxes, and email. These devices have significantly extended the reach of transactions and businesses. Yet, paradoxically, in spite of 20 years of improvement of these technologies, the productivity of office work has not been improved.
The real problem is that we have not defined or automated the organizational processes that produce customer satisfaction. By automating business processes not explicitly oriented toward customer satisfaction, organizations have accelerated the production of dissatisfied customers. The solution to the service sector productivity problem lies in discovering the fundamentals of coordination and then building tools and systems that will give organizations the capacity to coordinate effectively and satisfy customers. The right kind of workflow to address such problems are those that show the human processes of coordination.
MRH
9/14/94