An Approach to Technology in Your Business
The key to being able to make rational judgments about information technology in your business is understanding why it's there in the first place. Simple as this may sound it is surprising how many executives don't start with a grasp of this basic premise of technology's role in business when contemplating I.T. strategy. And this problem is not just limited non-I.T. executives, a good number of I.T. managers and practitioners could use some refocusing on these basics as well.
- Record Retention: Simply put this is the recorded history of the activities of your business. Computers are very good at organizing and retaining a vast amount of information about each process undertaken by your business. Record retention is often the first, and sometimes the only, thing that business managers think about when they consider technology. This is perhaps because it most often has non-technology based analogs: for example an invoice stored inside a system is not that much different than a paper invoice that you can hold in your hand. it's accessible and easy to understand without thinking much beyond the system as a metaphor for a filing cabinet.
- Business Process Optimization: All this means is making the daily activities of your business more efficient, more productive and less prone to mistakes. Technology can achieve this by reducing the time it takes to process a purchase order by your AP staff, reducing the steps it takes for your sales people to complete a customer order at the close of a sale, or allowing engineers to cut the time it takes to produce designs over that which the same work would have taken with pen and paper or less efficient systems. The importance of this benefit of technology is often times missed in evaluating business systems because the investment returns are most often 'soft returns' in the such as higher productivity that are often times not regularly measured. Business Process Optimization success demands a big picture, long term style of thinking in order to achieve a positive outcome.
- Information Retrieval: In its most basic form this is just normal reporting giving an aggregate view of all those records of the business' activities; unfortunately, basic reporting is often times treated as an after-thought in technology projects leaving business managers to scramble after the fact. Also, by only focusing on day-in-day-out operational reporting activities, managers can inhibit a more strategic and more insightful understanding of what drives their business over the longer run and how it might need to evolve for changing circumstances. A more analytical approach to your collected business history can reveal hidden gems about your customers, your vendors, your operations, and a changing marketplace.
- Sales Support: Finally, and definitely not the least of the technology's purposes is technology serving as a sales channel. Technology has been an aid in the sales process for a long time, helping to keep track of leads and customer communications, but since the late '90s technology has become a selling channel in its own right alongside the more traditional sales support roles of the past. Obviously web stores sit in this category, but somewhat unnoticed are point of sale displays such as self-serve kiosks and credit card processing terminals, wireless order taking devices (so called 'line busters') and new marketing related uses for personal mobile devices such as smart phones. Business managers tend to understand the role of these platforms and the customer experience related to these tools, but still missing from the thought process of many executives, are the cost/benefit issues of implementing these technologies.
The Nature of Unproductive Thinking
That's it, that's all there is to technology's role in business; and yet so many businesses don't start with these basics in mind as they manage their information technology assets. Often times executives start by reacting to a situation and focus simply on cost mitigation as they move forward. This has been called 'situational thinking', which is responding to a situation and basing decisions on mitigating that situation rather than focusing first on the desired consequences, the desired end-state, and coming to decisions aimed at achieving these desirable consequences. [1] So for instance, if you find yourself, when thinking about I.T., that you're thinking such thoughts as, "Our systems are terrible, we need to replace them." you are actually in this mode of situational thinking. The problem with this line of thought is that it tells you nothing about where your business should be or where it should be going in regards to information technology: it's not an actionable strategy and, worse still, it prescribes a solution without specific goals. There actually are businesses that have made this kind of thinking their strategy and not surprisingly the consequences of their decisions weren't what they expected nor were the outcomes desirable.
A Better Approach
The following steps will help you and your business formulate information technology strategies that will make technology more of a productive investment rather than simply a necessary evil . A senior management team or individual executives working through these steps as guide, and in constructive partnership with their company's I.T. leadership, will arrive at a solid and unambiguous plan to move their company forward.
- Develop your I.T. strategy based on your business goals. A good executive level approach to guiding I.T. strategy should look first to what the business should be doing, but hasn't achieved yet. These are expressed in business terms, not technical terms. This is where understanding the role of technology in business comes to play. Thinking about where your business can use a productivity boost (Business Process Optimization), where some additional information can lead to better decision making (Record Retention, Information Retrieval) or perhaps seeing opportunities in tapping, say, the Facebook audience with targeted marketing (Sales Support) gets you thinking about your business, not obscure technical issues. focusing on business need based goals also gets you out of the trap of thinking only about what a specific technology may offer. Importantly, establishing these goals on business terms gives your executive management team a concrete and understandable measure of any given technology project's ability to meet the business need.
- Avoid developing your I.T. strategy as a response to your current I.T. situation. While it can be instructive to understand what 'mechanical' management issues have led to a less-than-good I.T. situation, the current situation itself should not predicate your forward looking planning. Even if your information technology problems are enterprise wide, they most likely arose because the original strategy itself wasn't a forward looking, business goal based strategy. Remember: the reason for having a good strategy is to take your business to the next level and into the future, not to get a 'do-over' for past mistakes.
- Establish quantifiable goals for your strategy. You wouldn't invest in a stock or a new business venture without a quantifiable expectation of a return on that investment, would you? So why would you treat your investments into I.T. any differently? Yet many executive management teams do exactly this when establishing their expectations for information technology in their business. This is symptomatic of treating I.T. as simply another cost center to manage rather than an asset from which there should be return. Many executives managing in the cost center mindset invest in new I.T. projects and have the vague notion that, somehow, things will be better or more efficient. Often times what they get doesn't match their expectation and/or the cost and time to implement defeats the goal they strove to obtain in the first place... and without quantifiable goals from the outset they learn about this error long after the point of no return. Couching your corporate I.T. strategy in concrete measures and giving a time frame in which to achieve the goals ensures that 1) your I.T. department understands their mission and the focus of the business; 2) your executive management team has a clear understanding of the performance of technology adopted by the business, and 3) expenditures that are imprudent or impractical are avoided before significant outlays have been made. And there are real measures that can be applied to these things, be it a piece count per employee hour increase, a positive impact to inventory turns, or an increase in sales, etc.
- Focus on 'what' to accomplish, not 'how' to accomplish it. It is a mistake for business managers to prescribe specific technology solutions as a substitute for a well defined strategy of business goals. Often times such mandates are made with no more grounding than, "that's what we did at my last company and it worked." This approach is problematic in that it precludes what may be better solutions without any consideration and it presumes that one size fits all. In reality the cost of implementing an old solution into a new situation, and its fit to your current goals may alter the value proposition significantly. The best way to set I.T. strategy is for executive management to define business goals and to charge the company's I.T. leadership to work together with business unit stakeholders to find the right solution and implement the strategy. If the company's I.T. leadership is incapable of or disinterested in understanding the business of the company, or in being a constructive partner with the business, your company has the wrong I.T. leadership which is a different kind of problem to correct and correct quickly; business leaders unwilling to allow or trust good I.T. leadership to do its job in finding the right technology solutions for the company suffer from what is simply a different aspect of the same problem. Anything less than an appropriate partnership between your key managers, business and I.T., will cause your application of technology to be substandard and diminish your investment and competitiveness.
Nothing that I've outlined above is hard or difficult to grasp. This advice says simply that business managers should focus on what they know best and avoid what they don't, clearly and precisely state their forward looking goals, and then let your information technology managers rise to challenge while monitoring progress against the established measures. There is no more mystery than this and it is easily within the reach of any competent executive.