In the rush to automate, the marketing and sales function is the next frontier. As everybody knows, over the past decade information systems have been making great inroads in engineering and manufacturing. Automation has cut direct labor to a small fraction of production costs—an average of 8% to 12% in manufacturing companies. Therefore, wringing yet more cost reductions from production labor is increasingly difficult. In such technically advanced industries as computers, semiconductors, airframes, metalworking, and autos, incremental investments are now garnering diminishing returns.
A version of this article appeared in the January–February 1989 issue of Harvard Business Review.
