Future IT in
business
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In spite of grand
claims for efficiency gains from using IT, these gains often canÕt be seen on
the bottom line of the company accounts. Something is going wrong. Money is
certainly being saved in one place so it must be being wasted elsewhere. Up until
the mid 1990s, IT was basically email, the internet, backups and so on. The
first uses of intranets were very beneficial. For example, BT claims a saving
of hundreds of millions of pounds just by replacing paper directories with
on-line versions. Integrating suppliers and customer IT systems to streamline
business processes on both sides is also very beneficial. Gains from these smart
uses of IT are very demonstrable. But since these quick wins, corporate IT use
has often been less smart. It took administrators a while to catch on to the
concept of using IT to micromanage and centralise, but now they have fully realised
its potential to roll out administrative processes throughout the company on the
slightest whim, and that is why we are now in the IT dark age. IT is often used
to gather information on every tiny detail of what is happening to improve
control, but no-one properly checks the full costs of doing so. In parallel, IT
is increasingly being used to centralise systems.
I strongly believe
that micromanagement and centralisation are usually misuses of IT. Head Office can
now easily make everyone in the company follow yet another new procedure to
generate valuable new data, but unless the cost of gathering that data is
properly estimated, the net result can be a loss. Putting something on-line
doesnÕt mean that it is free! Every time a worker has to interrupt their mental
flow, log-on, fill in a form, log off, and get back in the right frame of mind for
their other activity, there is a significant productivity. The first time
around, it is only a few minutes, and no-one works all the time anyway. But a lot of Ôfew minutesÕ
have now been eaten from a workerÕs day by countless small administrative
procedures, and each one now represents a bigger productivity drop. But since
the workerÕs time completing such procedures often isnÕt measured, no-one knows
just how much is being squandered. My own estimates are of the order of 20%,
roughly enough to justify why there is little net gain from IT use in
companies.
Also,
centralisation removes local people from the loop, destroying the social
collateral that otherwise grows over time as people get to know who does what.
Something that used to be a simple matter of asking the techie down the
corridor for an instant fix, or asking the nearest secretary for a form, can now
be a tedious online battle to find the right department, the right form,
submitting an online request for assistance, and then waiting while an
understaffed department finally gets round to dealing with it. What used to
take a few minutes can now take hours thanks to centralisation and putting
stuff online inappropriately. Worse still, staff feel frustrated and
demoralised.
But the market
will win. Companies that misuse IT will be filtered out of the market by
ruthless competition. Survivors will be those that use IT properly. We will
soon be in the age of enlightenment. We will see the promised efficiency and
cost gains, simply because they wonÕt be squandered.
In the early days
of computing, people looked in awe at computer print-outs, assuming that anything
from a computer must be right. After a while people realised that if you put
rubbish in, you get rubbish out. IT systems are no different. If an idea is
bad, laundering it through an IT system doesnÕt make it good!
There will be lots
of new IT coming down the road. What it does isnÕt important. Business will
still be business, and technology wonÕt be magic. Managers must always undertake
a ruthless analysis of end-to-end company-wide savings and costs before they
throw IT processes at staff. One of the commonest pitfalls is taking a
perfectly good system, such as submitting expense claims as simple spreadsheets,
taking 15 minutes perhaps, and forcing staff to do them online on very slow, poorly
designed systems, now taking an hour. Every company has several examples of IT
misuse like that. A much higher degree of scepticism is needed. Claims of
potential savings should always be challenged by demands for full system-wide
costs. And as a useful check, staff must be permitted to report on timesheets how
much time they lose on administrative processes.
And the good news.
It is never too late to look at what has already been changed and see if just
perhaps it might not have been such a great idea. You might already be able to
recover that 30% efficiency gain that your IT is giving you, by trashing a lot
of administrative IT use.
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