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Wednesday, September 17, 2014

Pascal's Triangle & The Digitization of the Office - 1/3/2014


In the Beginning -

The workplace has been evolving since the beginning of time. We've moved from farms to churches to castles, to high-rise office buildings and mega-cities. As communication shifted from handwritten documents to print to electronic, so too, did the office and the way we conduct day-to-day business.

Some consider the process started sometime in the 90s - while others imagine true digitization kicked off with the advent of the IPad. 

My observations and research reveal the shift has been occurring since the late 1600s starting with a device invented and built by an 18-year-old, French kid. The mechanism performed addition, subtraction, and multiplication through the manipulation of gears and dials. The teen was helping his father calculate bigger numbers when performing French tax accounting. 

Although it was not a digital device, indeed, it was analog, and the machine processed mathematical tasks quickly. The young inventor was Blaise Pascal and he is attributed for illuminating the significance of a triangular arrangement of binomial coefficients - commonly known as Pascal's Triangle. (of course, you knew this, #sarcasm)

Neither Pascal's Triangle nor his calculating motor revolutionized the business world - it would take hundreds of years and thousands of inventions to bring us to our current sophistication - but the "Pascaline" as it was called, was a baby step toward digitization.

Definitions, again -

What do we mean by 'digitization of the office' and what is the difference between analog and digital? To understand let's first review some basic definitions.

  • "Analogue" - something that is similar to something else in design, origin, use, etc.: something that is analogous to something else
  • "Analog" - of, relating to, or being a mechanism in which data is represented by continuously variable physical quantities
  • "Digital" - of or relating to information that is stored in the form of the numbers 0 and 1 or using or characterized by computer technology
  • "Digitization" - to convert (as data or an image) to digital form
As humans, we perceive the world in analog. We see and hear a continuous transmission of information to our senses. This continuous wave is what defines analog data. Digital information, on the other hand, interprets analog data using ones and zeros.

For example, in analog recordings, the signal is acquired directly from a microphone and placed onto the medium - typically tape or vinyl. The wave captured is analog so the wave on the tape is analog. That wave can be read, amplified, and sent to a speaker to produce the sound.

"I've visited other peoples' offices since 1988 - and to be frank, I can't tell that much difference, in the macro sense. Sure, I don't see those little pink, "While you were out" slips of paper at the front desk, and to run into a typewriter or multi-part forms is not just a rarity but an outright attraction. Yet, in the end, an office is still an office..."

In digital technology, the analog wave is sampled at some interval and then turned into numbers - 1's and 0's. These numbers are then translated into electrical signals representing the recorded or digitized wave and output over speakers.

Think of the old analog copiers taking a picture and presenting the entire "picture" as a latent image on the drum, then page. Our digital devices encode the image into 1's and 0's, then melt toner at the pixel level after decoding the 1s and 0's - a dot at a time.

"Quick, to the Accounting Department" -

Consider the act of sending out invoices and posting payments.

In the olden days, A/R clerks created hard-copy invoices on multipart forms. The original and remittance copy was sent to the client and an internal copy was filed in a 1-31 tickler file folder. If invoices were due on the 30th, these copies were placed in or near the "30th" folder.

Each day, the A/P clerk would review the invoice copies contained in the appropriate 'tickler' and either post a payment against the invoice or follow up with the client politely explaining they were now past due and determine an expected date of remittance. Notes were jotted down and the invoice copy along with those notes was placed into the appropriately dated tickler file to be reviewed on that day.

Think about the process just outlined and the equipment utilized to complete this function: typewriters, multipart forms, copy machines, White Out, telephones, postal machines, mailboxes, filing cabinets/drawers, pens, paper, internal forms, and sticky notes.

It was a workflow; an analog system.

Fast forward a couple of decades, maybe a few, and what does the typical process look like today?

Invoices are generated periodically throughout a 30-day period - a company's automated system, SAP 1 for example, batches invoices to be generated. The batch is approved, by a human, and processed. Depending on many variables invoices are either printed on paper or presented to customers digitally via email, or other means like Electronic Data Interchange (EDI). Once the invoice has been issued, the system can present an accounts receivable aging report at any given time reflecting accounts paying on time and those that are past due.

As you can imagine, the 'digitization' of this one process represents an incalculable reduction in the number of labor hours and there are many more examples of digitalizing a business process - from the grocery store to the manufacturing floor.

Digitization Promotes Separation -

Another critical observation is recognizing the connection between business process effectiveness and physical proximity. If I can manage most of my tasks on a PC and PCs are giving way to tablets and phones, why would I need to sit in a cubical all day when tapping on glass at home, in a coffee house, or at the beach? If proposals are generated and converted to orders digitally and if the stock can be ordered just in time to be drop-shipped anywhere in the world, again, why do I need to under fluorescent light breathing recirculated, artificially cooled air?   I don't.

But there is value in face-to-face discourse. As a matter of opinion, I believe face-to-face becomes more important the more we digitize. To connect with a person, eye to eye while increasing digitized productivity will be the ultimate balance - most likely a perfect balance is unobtainable.

Déjà Vu All Over Again -

Has the office really changed all that much?

I've visited other peoples' offices since 1988 - and to be frank, I can't tell that much difference, in the macro sense. Sure, I don't see those little pink, "While you were out" slips of paper at the front desk, and running into a typewriter or multi-part forms has moved from a rarity to an outright attraction. Yet, in the end, an office is still an office. The status quo to rules - besides the loss of typing pools, tickler files, and 30-person accounts receivable clients, what has really changed? There are still phones on desks, copiers in the hall, printers next to users, screens, and yes even filing cabinets.

What the heck happened? Sometimes it seems the more we digitize, the more time we have to continue to digitize - we're doing the same things only in greater volume and quicker.

The Future - Your Future

Once again, we're right in the middle of the next transformation in office evolution. The question is, can we create a sustainable existence supporting the office of the future? If no copiers, then what? When the OEMs all provide self-healing, inexpensive output devices where do we fit in? When this digital world shifts from paper to glass, what services do we provide?

Here are some ideas:

Recognize, don't resist -

Plenty of blacksmiths, buggy manufacturers, and saddle makers were quick to retort, "They'll never replace the horse." after watching one of Henry Ford's contraptions amble down the town. There aren't too many blacksmiths in the world today. Back in the '90s more than a few ComputerLand, Inacomp, MicroAge, and BusinessLand owners said, "They'll never sell computers at Wal-Mart, people want to talk to a salesperson who knows how to work a computer."

How many Inacomp Computer Center commercials have you seen lately?

Shift to services -

The mantra for the past seven years, heck the past decade, has been, "move to services" whether that means document management, managed print, managed IT, or water delivery. The phrase has been repeated so often, that it becomes an empty threat. Don't be fooled, paper shipments are down, copier placements are down and office print volume is down.

It's just a matter of time.

Look through the recurring revenue lens -

The biggest difference between digitizing a client through Electronic Document Management (EDM), FaxServer, or archiving system, and a managed service is recurring revenue. The standard, on-premises software installation, configuration, implementation, and training model does NOT fall into the recurring revenue model - even if you include yearly support or upgrade revenue; these solutions represent project-based, one-time revenue.

For true recurring revenue through digitization, look to the cloud and SaaS.

Don't be afraid to change, or upset your existing revenue stream-

You've made money, helped families pay bills, and sent kids to private school by meeting OEM quotas, designing lease/service schemes, and "churning the MIF". The model of selling hardware and billing for service/supplies over time was revolutionary - what if that revolution is over? Could your past success be holding you back? Are you paying homage to a dying model? Even if your business is good, are you closing a 'run-rate' or 'recurring revenue' business?

Do you know the difference?

Is digital better than analog?

There is, of course, one last thing.

The human body, indeed our entire existence is an analog one. As humans, we perceive the world in analog. Everything we see and hear is a continuous transmission of information to our senses. This continuous stream is what defines analog data. We see and experience events as they occur accessing from memory in an analog manner.

Digital information, on the other hand, estimates analog data using only ones and zeros. Digitizing a process results in quicker response times and greater productivity - but can we over-digitize the office? The answer is "yes", we've done it before. We've tried to replace a human with voice mail and substitute an email for greeting cards. We've put our clients into queues and converted their experiences into open tickets and numbers.

Along the line, we lost a smile here, a handshake there.

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