IT

Where Winners Spend their 2%

I don’t know if you remember but for close to a decade, starting around the mid-2000s, people couldn’t shut up about Steve Jobs. This seemed to coincide with the release of the iPhone, YouTube, and social media, which makes sense.

All of the content seemed to herald Jobs as Tech-Jesus. The iPod was the second coming of the WalkMan, but better, and iTunes seemed to have solved the music industry crisis brought on by Napster and P2P sharing sites. Truly, Steve was a god among men. I was unmoved by all of it.

Maybe it was because of where my head was at the time but it all seemed a little fan-boyish to get so wrapped up in a dude that owned one outfit. And they were making a cell phone? Without a keyboard? Way to waste a billion dollars, my dude.

Except it was everything. But I never appreciated why before I saw this video.

My biggest takeaway was Steve discussing how they looked at Information Technology and how companies were obtaining it. All of them spent around 2% on IT, but they differed in where the bulk of those purchases went. Not-so-successful companies spent it on management productivity. Successful companies spent on operational productivity.

What does that mean?

It means that regular joes were focused largely on incremental improvements to how they already did things. A better email client, server, PCs, etc… Successful companies were focused on applications that could do repeatable and automatable things for them. The second requires more effort than buying something off the shelf. Applications had to be made and coded at a time when that wasn’t an easy thing to do. Steve focused on applications when the vast majority of people had never heard of the term.

The iPhone dominated with the advent of apps. Your phone could do things now. Your phone could execute tasks that tangibly made your life better. For at least three years, you couldn’t go a month without someone telling you about the next killer app you needed to download. What could the Blackberry do? Bang out long-winded emails with ease? That was about it.

This especially resonated with me as that’s where our focus is; automate and create custom functions that add continuous value. In our business, competitive advantage looks like high renewal rates and lower operating costs, and the best way to get there is with great systems.

RIP, Steve. At least one of your movies was really good.