A local grocer had to close its store due to a computer system breakdown. It happened two days in a row. The temporary closures cost the store significant revenue loss, not to mention the inconvenience created for its loyal customers.
Businesses have come to rely heavily on technology. Technology drives efficiency, improves product quality, and enhances customer service. Unfortunately, it also poses significant risks to a business. Three of these risks are business interruption, rigidity and obsolescence.
Business Interruption
Technology failure could cause business havoc. There are ample cases of companies suffered revenue loss, tarnished brand, and customer defection as a result of faulty technology.
The grocer mentioned did not have a contingency plan. It figured that it would have taken too long for the cashier to look up the price for each item and tally the bill manually. It did not have a credit card imprinter to process credit card payments. Hence, closing was considered the best option.
A server failure started a Blackberry outage in Europe, Middle East, and Africa in October 2011. Research In Motion does have redundant systems in place. Unfortunately, the failover system did not work as anticipated, causing a ripple effect to North American users.
As no technology is fool-proof, a sound contingency plan must be in place to pull the necessary resources to correct the situation and minimize impacts. Time is of essence in dealing with business interruption.
Rigidity
Technology requires configuration in order to perform a task properly. The configuration is really a set of rules which must be satisfied before triggering an action. This means the more rules there are, the more complex the workflow. Incorporating complex rules in technology could result in rigid workflows and bottlenecks.
For example, the expense approval process is a common functionality in many applications. This seemingly simple process requires careful planning. You need to consider how to alert the approver of the pending requests, what to do when the first contact is not available, what is the alternative if the approver is not able to access the system. These are just a few things that need to be vetted.
A fully integrated accounting and project management application is perfect for professional service businesses. These companies need to manage each stage of the project life cycle well, including accurate tracking of costs. The number of tasks to be mechanized determines the effort necessary to design the solution, the amount of data to be captured, and consistency of their project management practice. These translate into time commitment, effort and cost.
The purpose of business rules is to reinforce compliance. While it is important, it could be a nightmare when the rules create a rigid model which affects productivity. There is a delicate balance between the ideal and practicality.
Obsolescence
The iPad, mobile solutions, and cloud computing have introduced significant changes in the technology and business landscapes. These changes impact a company’s business model, revenue streams, and how a business is managed.
Andaz Wall Hotel in New York city equips their check-in staff with an iPad. They roam around the lobby to help guests with check-in. Instead of standing behind a counter, staff approaches guests as they walk through the door, making a much friendlier and stronger connection with guests. The desktop computers had been displaced for the check-in and check-out activities.
The Opus Hotel in Vancouver recently replaced all the hotel-room phones with Apple’s iPhone. Guests can take the iPhone with them while they tour the city. In addition, each room is equipped with an iPad, with full access to the internet. This investment certainly wows their guests and gives the media something to talk about. This leaves competition which provides internet access on a pay-per-use basis in the dust.
The fast pace of change makes it challenging for businesses to keep up and fund the necessary investments. Technology investment is a long-term proposition. A business can get into trouble if it acts on short-term needs and does not understand the overall needs and trends.
Technology is a core enabler for business and it touches all facets of a business. Business needs to be strategic with how technology is deployed because it is an investment. Beware that technology is not perfect and it does have limitations.
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