In the realm of information technology there is nothing quite like an information system startup. The new system is installed; we hit the “on” switch; and voilà… “Here it is,” we say out loud, pounding our chests with a high degree of enthusiastic pride. “We’ve just changed our world.”
However, maybe we should have been a little more low key. Things are not quite right are they? We have found problems. We ultimately spend more time debugging, redesigning, and rewriting the code for the system. Unfortunately, it is usually a frustrating first year. But fortunately for us, over time the new system’s performance does improve incrementally.
Let’s jump forward a year from when we hit the “on” switch. The system is in and works relatively well. Reports are generated. Costs are…”what, costs are higher?” “We just spent a large sum of money last year that is supposed to give us reduced costs. Where are the savings? What do you mean there is no payback?” Oops, you have now discovered one of life’s many truths.
Whether verbal, paper based, electronic, real time or not – information in and by itself does not improve process let alone organizational performance. There is no payback from information technology. In fact, information technology has traditionally been shown to increase costs due to depreciation and due to increases in data entry and system trouble shooting labor hours.
So why invest in information technology? What is in it for me? The answer is simple; the information that comes from our information technologies enables us to see and evaluate our “current as is”. But the payback comes when management creates a good improvement plan and acts to implement the plan. The two are inseparable if good results are required.
I Can See
Think of it like this. You’re on a bus traveling from New York to LA. You awaken from you nap you note that you cannot see what is happening outside the bus because your window blind is closed. But when you open your shade, you can now see what is happening through the window and you see that your bus is about to be hit by a car running a “Stop” sign. But, you are not in a position to create a plan or act to prevent the accident. You can see it happening but you can’t do anything to change the outcome.
Information technology allows us to see opportunities or problems that we could not see before or could not find the time or energy to seek. Without the technology we must dig for, search out, and spend inordinate amounts of time trying to see what’s happening within our processes and our organizations. A good information system “raises the shades” that have prevented us from seeing what’s on the other side of the window. But, “seeing” improves nothing.
Wow, That’s Messed Up
What “seeing” does is that it allows us to evaluate our current situation. Using information technology, we can determine what is working consistently from one time period to another. We can discover what parts of our system are highly volatile. We can benchmark performance of key performance indicators and use that to “flag” large deviations from the norm. We can have the system show how historically one metric may impact a second metric. And as we evaluate our situation, management can more rationally identify what opportunities exist, how big the opportunities are, and how they rank against each other.
So Many Opportunities – What’s the Plan?
Again, we still have no payback from the information system investment. We can see our situation, we can evaluate our situation, but we have not experienced a benefit yet from that system. The benefit of the system comes from management’s decision making, planning, and plan implementation that focus on capturing the opportunities made visible by the information system. The technology increases the quality of our decision making as we create our improvement plan. The quality of our decisions wrought by the new information system improve the accuracy of what we target for improvement, improve how we allocate resources to the target opportunities, and improve our predictions on how fast we can expect a payback. The improvement plan, whether strategic, tactical, or operational, positions us to act effectively and efficiently on organizational matters that count.
Using a football analogy, the team has seen what the defense is doing, it has evaluated the situation and found some opportunities for scoring, it has planned its next move, and now the team is lined up on the scrimmage line waiting for the play to start. But no change in score will occur until the team acts.
Let’s Get Busy
Like all aspects of life, seeing opportunities and having a plan does not turn opportunities into reality. The real payback for the information system comes from implementing the plan; it comes from acting. The highest priority items must have the organization’s attention, action steps have to be occurring, enabling resources need to be in place and used, and accountability for results established. And just like in football, we score when the right play is called given the situation and everyone executes their role in the plan effectively once the ball is “hiked”.
Good use of basic project management techniques by the management team improves our ability to execute. It can ensure that good results occur in a timely fashion as the plan is implemented. And management can use the information system to now see how effective and efficient our efforts are as we act to take advantage of our opportunities. The system can tell us whether we are making progress, having no impact, or creating more problems than we had before. Management then can evaluate their actions and adjust them appropriately to hopefully begin achieving the results they desire. As in football, if we are not scoring, we need to do something different.
As you can see, information technology is like a pair of glasses. They allow one to see. But seeing doesn’t create results. When management creates and implements a plan that allows discovered opportunities to become bankable results, payback of the system will occur – not before. The results come from developing a plan that engages your organization and its people in actions that turn opportunity into “points”.
Misty River Consulting will assist you leverage your information system for improved performance. Call or email us: