Focus on Business Goals for Real IT Productivity

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In our connected world, people are attached to their work more than ever.

Rarely can people leave work at the office as it follows them home, tracking them down via cell phones, laptops and a plethora of remote connectivity options. Some would say this has increased the productivity of the American worker, but has it really?

Productivity is not the measure of total hours worked divided by total hours possible. That is a different metric known as utilization. Productivity is the movement toward a goal and doesn't have to be directly related to hours worked at all. What matters is doing the right things in the right way in order to move toward the goal.

That isn't a technology issue. That is a fundamental management issue.

For organizations, this means having objectives that support the goal. I'm not talking about pretty mission statements on the wall and floury financial report fluff, but real objectives that have meaning about where the organization is headed and what business units must do to support that goal. For employees, this means understanding the objectives and how their work furthers the attainment of them.

Enhancing productivity doesn't mean creating automation to the extent that there is a 'society of lever pullers' who blindly follow processes and edicts. There are very real dangers in that.

By understanding what the goal of the organization is and how employees contribute to that goal, they can understand what is expected of them. And since they understand that, they can look at new ways to improve their jobs. If they are told what to do without the underlying objective, then any improvement they attempt is simply a stab in the dark, which may hurt, improve, or do nothing for productivity.

How can IT effectively help in this type of situation?

Automating bad or ineffective processes accomplish little or nothing. How can IT help the organization achieve its goals? That is the question to always ask. I'm not advocating chaos -- that everyone does his/her own thing. No. I'm saying policies and procedures coupled with understanding and constructive feedback that creates adaptive systems can move mountains.

Another reason to understand objectives is recognizing that a relative minority of inputs generates the majority of outputs. The popular names for Vilfredo Pareto's Principle of Inequality is the 80/20 rule or the Pareto Principle. Regardless of what you choose to call it, the intention is to recognize the objective of the organization -- what processes truly add value in attaining the goal, and then focus efforts that generate the largest returns.

Imagine a financial organization with a limited IT staff. They can invest a lot of money into reducing hardware costs and maybe improve the bottom line by 1 percent to 2 percent. On the other hand, if they come up with better ways for using the existing systems to generate money or new automated business processes for people to leverage, then they may add a far larger amount of money to the bottom line in a sustainable manner.

The example may sound ridiculously simple but there is a very important point to understand. The goal of any capitalist organization, including banks, is to make money. You can say anything you want about market share or being a thought leader, but at the end of the day, the goal is to make money in a sustainable manner. Bear in mind that while it is important to manage costs, firms do not exist to cut costs.

In our example, if all effort were poured into cutting costs, there would come a point where there would be no more costs to cut and the company would quite likely have dug itself into an unrecoverable hole caused by excessive cost cutting and loss of resilience. By providing processes that move an organization toward its goals, that is true productivity enhancement. Cost management can't be ignored but it must not have precedence over productivity improvement.

In closing, IT and management must both recognize it is not enough to provide unfocused IT services. IT must be utilized in a judicious manner to maximize the firm's movement toward its goal. Not only must the organization have a goal and departments have objectives that support the goal, but people must understand them and IT must be utilized to automate and improve those processes, and that will yield the greatest movement toward the goal relative to cost and benefit.

Investments that do not support the attainment of the organization's goals are a waste. Those non-critical processes may be more efficient in the end, but if the end result doesn't move the enterprise closer to its goal, then productivity isn't improved. With all of the IT investment and people working more hours, productivity may have shifted upwards at a macro level, but not efficiently... and that is another story.

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