The Economics of Technology and Labor: Time to Rethink Your IT Program

I was sitting with a consulting client evaluating their readiness for the economic recovery, using my basic economic consulting process.  The client mentioned that he had considered a project to automate one of their manual processes, but it didn't seem to pencil out.  It turns out that was three years ago.

Today I was in a conversation with my favorite information technology consultant, Caleb Jones, and he talked about the value of a periodic IT audit within a company.  Putting the two conversations together, I just had to grab these charts to compare labor costs with the cost of technology.

The CPI chart is not perfect; it reflects hardware but not the consulting services often needed to implement IT solutions.  But the gist of the message is very strong:  Labor costs are rising, while computer costs are falling.  If you made the perfect decision three years ago, that decision is now out of date.

Gee, you thought running a company would be easy?