A final sign of a good digital nervous system is how effective your face-to-face meetings are. Good meetings are the result of good preparation. Meetings shouldn’t be used mainly to present information. It’s more efficient to use email so that people can analyze data before the meeting. Then they will be prepared to make suggestions and debate the issues at the meeting itself.
Companies that are struggling with too many unproductive meetings don’t lack energy and brains. The data they need exists somewhere in the company in some form. Digital tools would enable them to get the data immediately, from many sources, and to analyze it from any angles.
Today we have all the pieces in place to achieve the paperless office. Better computers and software make it easy to combine data of various types. Highly capable, networked PCs are everywhere in the office environment. The Internet is connecting PCs around the world. But paper use has continued to double every four years, and 95 percent of all information in the US remains on paper, compared with just 1 percent stored electronically. Paper is increasing faster than digital technology can reduce it!
Using our computer network to replace paper forms has produced impressive results for us. As I write this book, we have reduced the number of paper forms from more than 1,000 to a company-wide total of 60 forms. Overall, the savings from using electronic forms have amounted to at least $40M in our first 12 months of use in 1997-8. The biggest savings came from the reduction in processing costs. Accounting firms put the cost of each paper order — mostly the time of all the people handling the paper — at about $145. Electronic processing at Microsoft costs less than $5 per order.
By 1998 the average user went on the Web eight or nine separate times a month, spending a total of about three and a half hours a month online.
Bandwidth, the information-carrying capacity of a digital communications system, remains the biggest barrier to the widespread adoption of the Web lifestyle in all countries. Bandwidth is also the biggest cost. In developed nations business can generally afford the bandwidth the need to work digitally because lots of communications companies are wiring business districts. But it will take much longer to get affordable wiring into homes, schools, and libraries, which is crucial to achieving a fully connected society. We will only see the benefits of a Web lifestyle when high-bandwidth systems are in place. The most important step for a country to achieve a high-bandwidth infrastructure is to encourage competition in the communications industry.
In three years every product my company makes will be out of date. The only question is whether we will replace them or someone else will. In the next ten years, if Microsoft remains a leader, we’ll have to cop with at least three major crises. That’s why we’ve always got to do better. I insist that we keep up with events, as well as pursue longer-term projects, and that we use “bad news” to drive us to put new features into our products. One day, somebody will catch us asleep. One day, a new firm will put Microsoft out of business. I just hope it’s fifty years from now, not two or five.
Because of the many hospitals, doctors, care facilities, and public and private agencies involved, the amount of paperwork was enormous. Consider the number of people this paperwork represented. For every doctor and nurse who treated Mrs. Jones, there must have been a dozen billing people in several different organizations. It was like an old-fashioned military operation. For every soldier in the field, you had twenty people behind the lines handling administration.
Most experts estimate that 20 to 30 percent of the annual trillion-dollar cost of the US healthcare system is spent on paperwork. In hospitals tha number could be as high as 40 percent. A single week’s stay can create as many as a hundred pieces of paper. And, making things worse, about 13 percent of the one to two billion claims each year in the US are returned for errors.
Savings from new digital systems would represent a significant portion of every government’s budget. The US military recently found that it was spending more money to process and approve travel permits, $2.3B, than it was spending on travel itself, $2B. The US government budget is $27B for food stamps, $25B for social benefits, and $13B for public housing. These programs all have enormously expensive paper-based administrative systems that eat up 30 percent of the money. Good digital systems could push this below 10 percent.