Is the Sweet Spot Attainable?

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A college implemented an event registration application to handle its student registrations and related administrative activities. Apart from extensive customization, numerous Access databases and tools were bandaged together in order to fulfill all its needs. As a result, convoluted work processes duplicated work, reduced productivity, and increased cost.

Technology should enable a business be more efficient in their work. Unfortunately, negative impacts of a problem often set off alarms and trigger a search for a quick solution. Rash technology investment decisions could be costly.

The figure below shows the relationship between technology cost and complexity of business need.

nl-graph-aug2011

The solid line reflects that complex business needs generally require a comprehensive solution which is costly to build if it was to meet all the requirements. The horizontal dash line shows the cost for a specific solution. If this solution had more bells and whistles than what the business needed, the company paid a premium. On the contrary, if the solution did not have all the functionalities required, the company would end up creating ad hoc workarounds to bridge the gaps. This results in overhead attributable to additional resources necessary to perform the workarounds and higher support cost. The sweet spot is where all the business needs are met. It is the ideal situation.

The college cited above chose an economic solution that didn’t meet all its needs. It landed on point A on the curve. The overhead it incurred included the development and support of the Access databases, additional resources to enter data in multiple tools and effort required to export data to Excel for analytical work, and purchase of a reporting tool. The college did have to bite the bullet eventually and invest in a brand new application.

To avoid investing in inappropriate technologies, do the following:

  1. Determine the real need — take the time to uncover the root cause of the problem. Determine whether it is the process, people, or existing technology that causes the problem.
  2. Identify options — focus on the root cause, not symptoms. Brainstorm options that deal with the business need. Look for simple solutions and avoid making things more complicated than necessary. Do not assume technology is the panacea.
  3. Perform due diligence — explore the viability of leveraging technology that is in place. If indeed a new technology is necessary, conduct a thorough assessment, speak to other users, and keep a long-term perspective so as to align the solution with the company’s strategy.
  4. Resist the temptation to go with the most economic solution — there is no “economic” technology per se. There is always a tradeoff. As indicated in the above figure and example, an economic solution will likely cost more down the road.
  5. Invest in analytics — the solution should provide business insight for making sound business decisions. A common mistake made by many organizations is that funding runs out for reports or a tool to pull intelligent information. The business resorts to the manual process of exporting data to Excel and massaging the data for whatever they need. This is cumbersome and error-prone.

Finding a solution that fits the sweet spot could be challenging. My view is that it is a balance between cost and benefit. Paying a premium could be justified when the business will evolve to utilize the bells and whistles. On the other hand, the overhead that a business might need to bear could be acceptable. It is important that a company takes a prudent and objective approach to select technologies. Proper deployment of technologies provides the benefits of improved quality of work, productivity enhancement, and ultimately better customer service.

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