InformationWeek

Yardeni and others say standardization is a key contributor to IT's potential in boosting productivity. That's because technologies that "don't talk to other existing technologies" reduce the likelihood for collaboration. "Plug-and-play technologies are also generally quicker to initiate," he says. "There's no need to reinvent the wheel, which eats into productivity."

Though the Federal Reserve's research doesn't extrapolate whether IT will continue to boost productivity, economists say the potential is favorable, considering the increasing impact of the Internet and E-commerce. The Federal Reserve's study was undertaken from 1995 to 1999, mostly before the Internet boom hit high gear. Conceivably, the impact of the Internet on productivity could be even greater.

"One of the few constraints on business has been time and space," says Deutsche Bank's Yardeni. "The Internet reduces this; it's virtual and real-time," he says. The Internet represents what Yardeni calls "creative destruction"--it tears down boundaries while creating new jobs and new opportunities, he says. "The Internet is a highly democratic structure."

For instance, on the drawing board for Chase is a Web system that will let tellers at bank branches look up procedural information themselves, using a keyword search similar to the one used internally. The Internet is an integral element to providing that widespread access, says Korduba.

Indeed, productivity is a major aspiration managers have for their companies' E-business efforts, according to the InformationWeek Research study. Three of five executives say their companies are counting on E-business to improve worker productivity. This percentage is consistent across companies of all sizes and among business and IT executives in both above-and below-average productivity sites.

At the same time, two-thirds of those surveyed by InformationWeek Research say their companies' management hasn't taken every possible step to improve productivity. So, it's plausible that the next boon in worker productivity will be fueled by Internet initiatives--through their potential for further streamlining processes, breaking down informational barriers, and facilitating even better and easier collaboration.

"Industry by industry, companies are figuring out new ways to use the Internet to better manage long-distance relationships, eliminate travel, and understand customers," says Howard Rubin, chairman of the computer science program at Hunter College and a Meta Group research fellow. For example, "onboard diagnostic systems in cars allow technicians to solve problems from afar. That means the same number of technicians can fix a lot more cars each day," he says. It's those sorts of technology applications--unheard of a decade ago--that will likely stretch productivity gains even further in the future.

"The Internet is creating a standard around which everyone is converging," says Yardeni. The Internet and related information technologies will undoubtedly be the tools of choice to help workers accomplish even more in less time in the new millennium.

--with additional reporting by Clinton Wilder and Jennifer Mateyaschuk