Tech Daily


Words of wisdom from a bygone age

IT software and service suppliers would do well to heed some early 20th century business principles, says Philip Virgo.

Philip Virgo, VNU Business Publications, 24 Oct 2000

When industry figures talk of a shortfall of hundreds of thousands of IT experts and call for action, it is like Henry Ford talking in 1909 about a shortage of chauffeurs. But did he call for a government training programme? No.

Instead, he produced the Model T - designed so anyone could drive it and repair it. Even 18 years after its launch, all parts for the much upgraded Model T were still interchangeable with the first models.

If software and IT service suppliers had paid similar attention to users' needs for ease of use and product compatibility, would we now be spending so much time talking about skills shortages?

IT appears to be unique among professions in moving from adolescence to senility without passing through maturity.

Some 30 years after the birth of the internet, and 20 years after the launch of the mass market PC, we still hear calls for millions of people to be trained to handle this 'new' technology.

It is interesting to compare the policies of today's technology suppliers with those of Henry Ford. People who believe that IT and the internet will change the world could learn a lot from him.

One key Ford saying was: "A commodity must first of all be designed to fit the needs of the largest possible number of consumers, both in quality and price." He was also one of the first to realise that "the number of consumers will be continuously increased by constantly lowering the price of the article".

Ford's approach can be summarised in four principles that apply equally well to the computing and communications industries of today: an absence of fear for the future or veneration for the past; a disregard of competition; the putting of service before profit; and a focus on process efficiency.

Given the current battle between proprietary software and the open source movement, another Ford principle is most appropriate. "A disregard of competition [means that] whoever does a thing best ought to be the one to do it. It is criminal to try to get business away from another man - criminal because one is then trying to lower, for personal gain, the condition of one's fellow men - to rule by force instead of by intelligence."

Service before profit
The current backlash against poor service and poor reliability over the internet gives similar credence to the third Ford principle: putting service before profit.

"Without a profit, business cannot extend. There is nothing inherently wrong about making a profit. Well-conducted business enterprise cannot fail to return a profit, but profit must, and inevitably will, come as a reward for good service. It cannot be the basis - it must be the result of service."

Those enamoured of the New Economy might care to remember that the Ford Motor Company was launched with $28,000 and grew on positive cash flow for more than 40 years - with no bond issues or borrowing.

The New Economy is not new. A 1000 year-old Gaelic proverb loosely translates as: "Wealth is created when one man produces what another wants, whether it be a sword or a song."

Recovery from the tech stock market crash and the current poor revenue returns of many software and IT services companies depends on packaging technology to meet customer needs, not asking customers to adapt to technology.

Philip Virgo is strategic adviser to the Institute for the Management of Information Systems. He can be contacted at central@imis.org.uk.

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