Boss Lady

Why ‘software eating the world’ is good for your business


If you go online and listen to modern software and tech webinars, you can discover all sorts of interesting ways that software is replacing tasks that were once done by people. Software engineers are pushing the narrative that software is “eating the world” as it was so eloquently put by Marc Andreessen back in 2011.

It turns out that Andreessen was right. Back in 2003, MIT economist David Autor investigated which jobs had been gained since the 1960s and which jobs had been lost. What he found was actually quite stunning. All those traditional jobs once considered middle class – clerking, banking and financial services – were leaving the economy. They hadn’t gone abroad to China, like many of the manufacturing jobs. Instead, they had been guzzled up by technology. Software started doing all these jobs faster and cheaper than people, enabling companies to lay off vast swathes of these workers. For instance, we no longer have people at the telephone switchboard, wiring us through to different countries. This is now all done automatically by computers and a satellite infrastructure.

But the pace of software improvements continues unabated. In this decade we’ve seen all sorts of new innovations, from software for better contract management to applications that will automate the vast majority of your accounting process. What’s more, a lot of this technology has actually helped new startups enormously. Big businesses have been slow to update their systems and turn their enterprises around. Often, by the time they get around to doing so, the technology has already moved on again, and they’re still out of date. Startups, on the other hand, aren’t invested in any particular technologies, allowing them to quickly use new software and take advantage of the cloud.

It should be noted that there’s no going back for businesses. Any business that tries to return to paper-based information processing and hire a bunch of clerks will go out of business. Their costs will exceed their revenues, and they will lose out to more automated competitors.

The only way forward is for businesses to continue to adopt software that removes slow and error-prone humans from the loop.

It used to be thought that machines would only be able to do what economists called “routine tasks” – or tasks that could easily be programmed by software experts. But what things like receipt recognition in accounting software and self-driving trucks show is that this is no longer the case. Nobody “programmed” these systems to do what they do. Instead, they just do it, based on the millions of different examples they have been fed through the internet or through their own experience.

Businesses that allow software to eat up their functions, from accounting to marketing, and eventually to driving their fleet, will find that the value-added of their remaining staff will go up and up. The people who invent and maintain these systems will be highly valued since each individual will be able to generate so much value-added on their own.

As Roger Martin, the Director of the Martin Prosperity Institute points out, software allows companies to update incredibly quickly, and without burnout.

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