Best practice

MICROSOFT:The new national productivity centre shows the importance of increasing output in order to maintain Ireland's economic success

The recent opening of the National Productivity Centre (NPC) at the Irish Management Institute campus in Dublin, following a €2 million investment by Microsoft and the IMI, underlines the importance that both organisations are placing on increasing the Republic's productivity in order to ensure we remain competitive on the international stage.

Microsoft may have initially been attracted to set up in Ireland in the late 1980s by the low cost of doing business, but any advantages in this regard have long been eroded.

But Joe Macri, managing director of Microsoft Ireland, does not necessarily agree with the doomsayers who automatically equate rising business costs with an automatic loss of competitiveness.

"Those people are right if we continue to do the same thing and costs rise," says Macri. He points to the Nordic countries, especially Denmark, are the best example of how Ireland needs to proceed, as they have extremely high costs but continually rank in the top 10 of global competitive nations.

"You have to look at the other side of the equation and see how productivity can be enhanced," explains Macri.

Danny McCoy, director of policy at employers group IBEC, agrees that competitiveness is not just about cost and says that it is a "two stroke engine".

"It's about productivity enhancement and cost containment," says McCoy.

"As a society we should be looking to be a high wage economy, but the only way we can justify that is through increased productivity."

Productivity is normally measured by the value of production output per unit of work and, as such, it would seem a relatively straightforward equation to increase national productivity.

Dr Dan Thornhill, chairman of the National Competitiveness Council, says that while the equation may look simple on paper, the reality is far more complex.

"When you drill down, Irish firms are playing in hugely competitive markets," says Dr Thornhill.

"The NPC provides an opportunity to think about new processes and new products."

The NPC been developed to allow private sector chief executives, public sector secretary generals and their senior management teams to understand how they can address their own unique competitiveness challenges by improving overall levels of productivity in their sectors.

The NPC, which is also supported by Dell, Eircom, Fujitsu Siemens and HP draws on the knowledge, insight and experience of experts from across the private and public sectors.

Housed in a refurbished building on the Irish Management Institute (IMI) campus in south Dublin, it uses a variety of audio-visual content in a boardroom setting to deliver a high impact 90-minute session on how the combination of productivity improvements, innovation and the application of technology have helped businesses and governments around the globe to improve their competitiveness.

It includes international best practice and draws on the expertise of a number of leading economic commentators and management practitioners based in Ireland and internationally.

IMI chief executive Tom McCarthy says the format of the NPC was informed by modern management thinking on productivity.

"Productivity is not just a factor of machines and labour as was the case in the 1950s," explains McCarthy.

"Now it's about how you organise the business, how you manage people and how you combine that with technology."

The session provides real-world sector-specific case studies on how companies around the world are addressing the issue of productivity.

At the launch, 30 different best practice case studies were available, covering the manufacturing, financial services, public sector, retail/hospitality and commercial sectors.

"It was a huge task, looking across the world to see who has cracked this at the firm level," says Macri. "Banks want to hear about other banks' experiences, and not necessarily other Irish banks, but from the best in the world."

"This is not just a case of sitting back to watch a video, it's an executive education experience," continues McCarthy.

"Some of what we are saying won't be news to people, what's news is how this can contribute to your bottom line."

As well as the audio-visual elements, local experts also contribute to the sessions with Macri and McCarthy both making a personal commitment to contribute to the training during the start-up phase.

The facilities at the NPC are made available to executives for as long as required and management teams are encouraged to use the off-site session for other company business.

With the initial focus on large firms and government departments, each session will be tailored for the individual organisation.

However, as the NPC starts to target the mid-market, joint sessions may be offered to ensure as many Irish firms as possible can avail of the opportunity.

Speaking at the launch of the NPC last month, Macri said: "According to research from McKinsey and the London School of Economics the combination of improving technology, management capability and innovation can yield productivity improvements of up to 20 per cent.

"That's why bringing together the expertise of both organisations [the IMI and Microsoft] delivers real insight on how to address productivity and gives executives from the private and public sector the opportunity to explore how these kinds of solutions can be applied to their own organisations."

Thornhill believes the NPC is important because facilitates managers to do two key things.

"It gives them a chance to review the processes and other key components of their business," he says.

"But it also enables them to get up to speed to see what information technology can do to improve their business.

"Microsoft have shown very positive commitment and imagination on this project."

"It is really important that management teams are bought into these simple ideas," says McCoy.

"Common knowledge is not common unless it is expressed commonly. The NPC sounds like an interactive and impressive way to go off-site and keep everyone on the knitting.

"Productivity should be everyone's knitting right now," he says.