Episode 68

An organization’s capacity to change is the bottleneck on progress, not technology. There is no greater burden than great potential. Did a new technology implementation come with high hopes to solve numerous problems? Often hope is postponed disappointment. While I had no intention of writing such a downer introduction, this blog will explore the various reasons why technology does not solve organization problems. Before tackling this subject, it is important to define the components of an organization and their purpose. An organization is a mix of people, processes, and technology.

Without people there is no organization. People will vary in quantity, skills, experience, responsibilities, and motivation. Additionally, individuals will often be grouped into teams where structure, cohesion, and coordination have a massive influence over the effectiveness of the organization. Processes are the tasks and routines that people, with the aid of technology, perform. There are documented and undocumented processes. Processes can span individuals, teams, and departments. There are also processes whose purpose is to change processes, otherwise known as change management. Processes can operate with both parallel and sequential task structures. Lastly, technology: the resource that is responsible for enablement and amplification of people and processes. This foundational explanation is important as you can see if technology enables bad processes or unprepared people to do a task, or worse amplify their efforts, no amount of new technology will solve the problem the organization was originally trying to address.

To tackle organization problems, the most important question to ask is, what problem are you trying to solve? While an obvious question, it is very difficult to properly answer. One way to know if your planning is on the right path is the depth of understanding in the nuances surrounding the problem. A balance needs to be struck between analysis and action, but use caution when a new technology proposal is over-weight on technology considerations. Why is this a problem? Designing a technology solution to solve a people or process problem will likely lead to over-engineering. Over-engineering will create technical debt and unnecessary organizational friction which will hamper the organization’s ability to remain agile. Technology should not be deployed for technology’s sake. We can see this with attempts using blockchain and even more recently with organizations scrambling to get into the Metaverse. Both blockchain and the Metaverse could have huge potential, but both have major challenges with defining what changes are needed regarding people and processes to where an early adopter can generate market value with a clear competitive advantage.

With every introduction of technology there will be some adoption friction. It is important to understand that organizations contain inertia and change will almost always be resisted, because “it has always been done this way”. Therefore, to improve success, the complexity of the technology implemented must be minimized. Let’s use an example to highlight my argument.

A hypothetical organization that manufactures components for assembly downstream. Through its long history, it has numerous divisions for each market it operates in. Each division has its own finance, marketing, and operations departments. A centralized IT department provides support to the organization, and strategic decisions are the responsibility of an executive team. Now under this structure, consider a task like provisioning IT resources. Every department will need to make a request to the IT department and to manage the requests a ticketing system is used. There are complaints that tickets are open for too long. The high-pressure environment has resulted in high staff turn over in the IT department for years. I hope I do not need to go any further, but it should be crystal clear that no ticket management technology will completely solve the challenges with making IT resource requests.

I will close off the blog with some questions and measures to help mitigate organizational problems. How many work handovers, approvals, and stakeholders are involved in your organization’s processes? Do individuals, teams, departments, etc have clear lines of responsibility and ownership? Does the organizational culture support the creation of organizational heroes? How common are single individual dependencies? How many resources are spent on rework and technical debt servicing? How long does it take to go from idea to completion? How visible is work in your organization? How much work is in process?

Do not put what you want (New Tech Solution) ahead of what you need to accomplish what you want. Regarding technology implementations, quality wins over features; work in small steps, create wins, and build momentum.

Episode 66

Whether it is finding and retaining IT resources, paying for cloud services, or purchasing and maintaining on premises infrastructure, let’s not kid ourselves, technology is expensive. Software critical to the good functioning of organizations are largely SaaS products licensed per user/month; $3 here and $12 there, an administrator has nothing to worry about until every employee in your organization has 10+ licenses of various SaaS products. With technology costs eating up more of the budget, eventually the leadership team will decide that it is time to find ways to cut costs. I want to use this blog to discuss the nuances around ensuring your organization gets the most value from its IT spending, and avoiding the cost cut spiral.

The worldview is dramatically different when organizational spending is classified as a cost versus an investment. Classic school of thought would be to minimize costs through negotiating better terms with suppliers, substitution, or the pursuit of more efficient uses of input resources. Input resources are acquired, then value is added to them through your organization’s core competencies, however the mindset with costs is that exchange is zero-sum. The cheaper we can source inputs, the greater the return for us.

But ask yourself, is IT spending at your organization a cost or an investment? When we invest, we are performing the same action, but our expectations can be dramatically different. There is a generative mindset, where investment represents enablement, fostering growth beyond a simple value exchange. Applying a cost cutting mindset to an investment would likely lead to a result where there is a lack of resources preventing the initiative from generating a return. There is a complicated system at play here; if an investment lacks the required resources, proceeds to fail or struggle and there is now an even greater incentive to cut the losers and redirect resources. But if technology forms a critical backbone to your organization’s function, one must be very careful of the second order impacts when “investment” is cut. Has anyone experienced IT staff cuts or limited training? What follows is usually a major transformation push, only then to see the initiative get abandoned. Managing technology assets is not easy, but hopefully I can provide some warning signs to be aware of and a better guiding worldview.

Individuals, or a collection of individuals within an organization, cannot be experts in everything. Adoption of any new platform takes time and resources, scaling exponentially with complexity and business importance. Organizations are a mix of people, processes, and technology. Now applying the cost cutting mentality to any of these pillars, (insufficient staff training, little change management or process redesign) it should be obvious that the investment in technology is not going to return value.

Focus on return on investment over total cost. Treat IT spending like one would with an investment in a company, a critical piece of equipment, or real estate. Investments are viewed as generative. The last six months I have been neck deep in Power BI, a business intelligence platform. It is free to use, but Pro Licenses are required by users to view reports shared on the Power BI service. At $12 per user/month for every user in the organization can be a tough sell initially. I look at that $12 not as a cost but as a way to generate time savings. If an application like Power BI cannot save all employees 15-30 min of time per month or create a better decision that returns equivalent value, then it is not being used to its full potential. Repeat the same thought experiment with every other system in your organization.

It is counter intuitive, but the better your organization can use its technology assets the less it will spend on them in the long term. Fewer big bang replacements, fewer critical failures, less downtime, and fewer engagements with outside consultants. Growth and improvement come from an investment mindset, not cost cutting.