Sunday, October 24, 2021

Focus on Business Goals for Real IT Productivity

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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