Are You Getting Your Money's Worth from Your Technology Dollars?
New information technology itself is viewed as a "magic bullet," curing every imaginable business ill and operating inefficiency known to humankind. Corporations continue to pour tens of thousands of dollars into new information systems and technology looking for significant gains in worker productivity and reductions in operating costs. But, are companies receiving an acceptable return on their investment from new technologies or information systems? We suggest the answer is a resounding NO!
Although, some benchmarks indicate productivity does increase with the advent of new technology; the results are modest at best. We rarely see technology reducing operating costs to the point where a company realizes a distinct competitive advantage. Let's look at some of the typical reasons why the introduction of information technology does not fulfill the promises of increased efficiencies and cost reductions?
A number of problems can occur during the system design process. And, like most things in business, it begins at the top of the organization. Information system initiatives do not maintain strategic focus on the business goals. Too many times, organizations get lost in the design process. People within the company really think every current business problem can be solved with a new information system. They're like kids in a candy shop. Over time, the system's scope goes well beyond the initial objectives. Business objectives are misdirected. And, there's usually no one in senior management monitoring the situation.
The system users do not have adequate involvement in the system design process. Typically, a member of the IS staff is appointed project leader and goes off to design the system. While interviews are conducted with senior managers and users from the supervisory ranks, employees who work in the system every day are only superficially involved in the process. Even if the project is not sidetracked by management, the users do not have sufficient input in the system design.
The IS people go off to program the system, heeding the wishes of senior management and attempting to meet the perceived needs of the users. The result is a flawed system design: missed target dates, cost overruns and a new system that is analogous to the prize in a Cracker Jack box. There is great anticipation searching through the caramel-coated kernels to find the prize, but little satisfaction once one discovers what's inside. Nonetheless, management must now take aggressive steps to get the project back on track and to insure delivery of the new system.
A lethal spiral ensues. Corners are cut on the remaining phases of the projectÐthe stages most directly impacting the users. System testing, data scrubbing, the system conversion itself, and user training are scaled back. For example, the company many choose to accelerate system testing or provide only cursory user training on the new system. To make matters worse, there is little emphasis placed on evaluating the things that really drive the information systemÐexisting work flows, manual processes, policies and procedures, etc.
As a result, users are unprepared for the new system and unstable manual processes render the new system ineffective. The promised productivity gains are lost in an unending "learning curve." There is widespread user dissatisfaction, while management searches for what went wrong. There are a number of things companies can do to secure their investments in new information systems.
- Appoint a member of senior management to "sponsor" the system initiative. A person accountable to the CEO for maintaining the project's strategic focus and business objectives.
- Name a proven project leader (preferably a user) to head the initiative.
- During implementation, utilize a "user help desk" to handle daily issues.
- Prepare users for the change
- Even if the project is behind schedule, do not skimp on the users: spend adequate time on system testing, data scrubbing and the conversion itself.
- Provide hands-on user training and create user-oriented system documentation.
- Ensure adequate representation from the key functional constituencies on the system design team.
- Simultaneously reengineer the work flow and manual processes and rethink the policies and procedures that drive the information system.
The success of any information system initiative is based on what the company puts into the process: in other words input equals output. Employing these ideas for your next information system initiative will help the company meet its strategic and business objectives and realize a significant return on investment with real productivity gains and cost reductions.