The Productivity Gap | BTalk Australia

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(14min 40) Telstra has just released "The Telstra Productivity Indicator: A report on business attitudes toward improving productivity in Australia", highlighting what is termed the productivity gap. An accompanying economic white paper shows the link between productivity gains and investment in information and communication technology (ICT).

In today's BTalk Australia Phil Dobbie talks to Paul Geason, Executive Director of Convergent Sales at Telstra's Enterprise & Government division, about the findings and the types of technology that deliver productivity benefits.

What are your thoughts on the role of ICT in improving business productivity? Add comments in the Talkback section at the end of this post.

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• Today's Transcript

Phil Dobbie: Hello, I'm Phil Dobbie and welcome to BTalk Australia. Today we talk to Telstra about the productivity gap.
Today on BTalk Australia in the world of business just how productive are the Aussies? Well, Telstra's just released an independent study into business productivity; it was conducted by Sweeney Research who interviewed 300 senior managers across a variety of businesses each with 200 or more employees. Now Paul Geason is the Executive Director of Convergent Sales at Telstra Enterprise & Government. I love the business titles that you guys have Paul. The take-out seems to be that we'd just like to be more productive than we really are, is that right?
Paul Geason: Yes, I think that is right Phil. The data reveals to us that Australian businesses and government organisations are extremely focused in prioritising productivity improvement as one of their major goals.
Dobbie: Right, but they just don't know how to do it.
Geason: This is one of the challenges. It seems that the research is telling us that whilst for nearly 80 percent of the surveyed parties that productivity improvement is a key priority for them. The area that they struggle in is actually identifying very clear and accurate ways for setting targets, for measuring targets and then ultimately realising that the benefits of those investments are for productivity improvement.

Dobbie: Right, so in other words they'd like to be productive but they're not really quite sure what benchmarks or what things to measure to try and find out whether they're becoming more productive or not.
Geason: Correct and I think that there are different definitions of productivity, there is certainly those organisations that believe that productivity is recognised by working smarter, by working more efficiently and getting more from the same assets that one has. If you talk to a government organisation it's very much about achieving improvements in terms of serving customers and increasing the levels of satisfaction of service with those customers. So there are varying definitions that are used. But breaking down the net tangible benefits of productivity investments is where organisations seem most challenged. Certainly they see productivity as the responsibility of all. But our sense is that with a transformation in the form of single points of responsibility for delivering productivity gains in managing very aggressively in terms of target setting and processes to measure against performance of those targets is a really critical first step for organisations to take.

Dobbie: So why has Telstra commissioned this research, what's the link and what are Telstra hoping to get out of this?
Geason: As my title suggests, Phil, I work in the enterprise government division of Telstra and we've certainly taken the lead on having this research conducted. From our perspective we wanted to understand the attitude of business and government to productivity. We serve those customers today and we know that productivity is at the forefront of their minds, so we wanted to go that extra step in identifying what it was that was driving those organisations, where there were the pitfalls and where we could improve because clearly there is a recognition of productivity as critical to the prosperity of the country and the prosperity of those businesses and organisations. There is clearly a direct link between information and communication technology investment and productivity.

Dobbie: So the research was showing that?
Geason: Yes, the research showed just over 80 percent of organisations consider productivity a key priority for their organisations that they had recognised the improvements that they'd been able to achieve through an investment in information and communications technology.

Dobbie: That makes a lot of sense doesn't it, but there might be a bit of a chicken and egg situation here and that the more innovative companies are making use of IT or ICT -- got to keep the communication in there I guess -- but other companies might be using it less just because by their very nature they're less innovative.
Geason: I think that is true too, Phil. I think that there are those organisations that adopt technology early and what we're finding is, and the survey certainly reveals, that early adopters are also extremely good at setting targets and measuring targets for improvement.

Dobbie: For the other companies it's probably something a bit more fundamental isn't it? They need its processors, management training, things that have very little to do with ICT I suspect.
Geason: Yes, I think this is the challenge in this productivity gap is that you see that for organisations that struggle in terms of setting up the targeting and measuring processes typically there can be cultural issues they've got to address, there can be leadership issues but getting to managing productivity improvement processes so ensuring that there's awareness in educating people making necessary organisational change to improve and persistence in terms of the management to the goals of any investment in productivity improvement's critical. But the measurement also, so setting targets and being able to track progress to those targets. And from our perspective, and we've learned this in many ways in our own transformation within Telstra, having a single point of accountability, someone who is assigned the ownership and accountability for implementing the investment and realising that productivity benefits, is also critical.

Dobbie: Those companies will be a lot easier for you to sell to as well, of course. I guess if you've got a company which is less innovative you're going to be going "gee it's going to be a long sales cycle with these guys".
Geason: It's a real challenge and what we do as we deal with organisations that have less infrastructure of that type to support those investment processes, we find ourselves increasingly playing a role of consulting to them in actually identifying ways that they can realise these benefits and working with them in the business coaching process so we will bring calculators and return on investment tools to them. At the outset are very generic but can certainly be tailored and customised to support them in thinking through how the use of implementation of mobile data services or through a hosting and storage model might actually support their businesses, get them back to their core expertise and effectively outsource some of that responsibility to a provider.

Dobbie: Now you started answering my next question as to what are these technologies, what is it right now that's providing productivity gains for the companies that are the most innovative?
Geason: The survey revealed some interesting data here Phil. We did find that of 61 percent of organisations that had deployed broadband or mobile technology they were realising genuine productivity improvement, so I think at a networking level the role that wire-line and wireless networks play in underpinning a great deal of what are ultimately productivity gains for customers is absolutely critical. If I can use an example maybe to bring that to life, with the Royal District Nursing Service in Victoria they have a responsibility with 1300 nurses for serving many patients throughout regional and remote Victoria and they previously, in their work practices, the nurses would come into a headquarter-like environment at the beginning of the day pick up client details, scheduling, and then head out on the job. They would then, in some instances, have to come back two and three times to access client data and update schedules and update information. And with the use of mobile data solutions and giving them wireless data access with PDA devices and wirelessly enabling their laptops, the nursing staff are now able to stay out in the field, they're able to access information remotely, they're able to update that information, access client records and essentially stay out on the job. And the service itself has told us that they now realise something like a one hour gain per nurse per day, which is then reinvested effectively by being able to serve more patients everyday through that type of gain. So that's a real example of how mobile technology is actually changing the way, if you can think about a work process and providing an opportunity for an organisation to do so much more with their current resources.

Dobbie: I imagine that's quite common isn't it, mobile working would be the killer app, at the moment in terms of increasing productivity?
Geason: Mobile working is phenomenal Phil in terms of the potential for change. We see it as a very exciting area in the way that organisations think about remote sales forces or any remote workforce whether it be sales or service, but also how you manage fleets remotely. And we're finding, in fact, even within Telstra we've undertaken a major project in terms of the enablement of a fleet management capability and a workforce management capability into our own field workforce. And we're achieving improvements in the order of greater than 50 percent in productivity from those workers because we get them to the right places at the right times, we're able to reduce the cost of management of that fleet. And it's absolutely game changing types of returns that we're getting on those investments.

Dobbie: So what's around the corner for those companies that have already embraced mobile working, what are they looking at next for the next productivity gain that technology can deliver for them?
Geason: I think that one of the really exciting technologies, which is really coming to the fore or has in the last 12 months and I think will be critical in the next two to three years in supporting companies down this path of productivity, will be video-conferencing. Certainly as we see more and more speed and capacity in the mobile network, mobile video-conferencing, I think, also is becoming much more of a reality. Video-conferencing and high-definition immersive video experiences for enterprises, whether it be on an executive's desktop or whether it be in a boardroom facility, we are seeing a phenomenal impact in the way that businesses think about their people working, how they meet, removing the necessity for travel at all times and thereby reducing costs, and the ability to then reduce carbon footprint through no longer travelling, but also just improving the quality of the communication that people have through a video experience as opposed to a more traditional telephone experience we think is changing the game. And I personally believe video and video-conferencing will be as important to communication processes as we've seen email become important, as we've seen mobiles change the way that people communicate with voice. So it really is changing the way and I think can deliver really net tangible benefits for organisations moving forward.

Dobbie: But we've been talking about this for decades haven't we, you think now it really is just around the corner?
Geason: Yes, I do and I think a couple of really important changes have occurred in the last 12 months to two years. One has been the pervasiveness of bandwidth and the coverage associated with bandwidth and the quality of that infrastructure. So at Telstra we're very proud of our investment in the Next G Wireless Broadband network and in our next IP wire-line network and the capacity that's now available to all of our customers, that's made a real difference in terms of a high-definition experience and the throughput within the network required to deliver quality of experience. So no more stilted pictures and pixellating of screens, we're talking now genuine high-definition quality of experience. The other thing that's been quite important is these facilities are now much simpler to use. It's been a key criteria for us as we talk to our suppliers that our philosophy of one click, one touch, simple to use, easy to get to the application is built-in in terms of the user interface and the usability so we no longer see people frustrated and tearing their hair out at their poor experience at trying to set up a video-conference or trying to deal with a support issue. That also has made a huge change in terms of the way customers can now think. One about a quality experience and two one is just very easy to get started and very easy to close off and just becomes part of their everyday working life.

Dobbie: Now this must be good news for your part of Telstra. I guess the economic downturn, the companies that can do well are the ones that can provide productivity solutions, and teleconferencing is a great example, and no need to travel because you can stay at home and save on the airfare. So Telstra's business, enterprise and government division must be saying, yes the downturn's not going to hit us as much as other companies or even as much as other parts of Telstra.
Geason: Yes, it's a very interesting challenge for us Phil, I think there are always concerns with economic downturn that as many of our customers will become distressed through difficult financial times. Our role at that point is to provide whatever support we can in ensuring that they can continue to operate and can continue to be productive. In many instances that will mean doing more with the resources and assets that they have at their disposal. In some instances it will mean doing more, but with less of the assets and resources that they may currently have at their disposal. So we see an enormous responsibility there in terms of this very survey that we've completed and the evidence we now have in terms of organisations wanting to prioritise productivity, but needing to be very clever and very partner-like in the way that we work with them to ensure that investment in productivity enabling capability delivers results.

Dobbie: OK, well thanks so much for your time today Paul and best wishes for the year ahead.
Geason: Great, thanks Phil.