Technology Plus

After years of investing heavily in information technologies, today's managers have learned that technology alone is not enough to bring greater efficiency to their organizations. For the technology to bring value, it takes people with knowledge and experience to establish the right framework.

There’s no doubt about it: information technology has revolutionized the way we do business. Certainly it’s hard to remember the days before disk drives, laptops, and enterprise networking. Not even the smallest company today is without a desktop computer. But IT alone has not proven to be the ticket to optimum performance, nor have “solution-in-a-box” software applications been able to instantly transform a poorly functioning organization into a streamlined one.

In an article the staff of the Harvard Business Review voted “the best” of all its 2003 features, business writer and technology strategist Nicholas G. Carr declared in a provocative headline, “IT Doesn’t Matter.” What could this mean, when Carr himself acknowledged that American companies had increased their capital expenditures in information technologies from less than 5 percent in the mid 1960s, to nearly 50 percent by the end of the 1990s. “Even with the recent sluggishness in technology spending,” wrote Carr, “businesses around the world continue to spend well over $2 trillion a year on IT.”

Yet Carr compared the evolution of information technology in business with that of such earlier technologies as railroads and electric power, and said that their trajectories were similar. For a brief period they provided opportunities for smart and aggressive companies to leap over competitors. But then, as the technologies became more available, their cost decreased, and they became ubiquitous and “invisible” from a strategic standpoint.

The implication of Carr’s assessment for business managers: There is nothing all that special about information technology. Rather, it is how the enterprise uses technology that is critical. “Indeed…the skill with which [technology] is used on a day-to-day basis may well become even more important to a company’s success,” he wrote in the much-debated article.

Understanding Comes First

PBS&J’s Information Solutions Division Manager Donna Huey has spent more than 10 years working with government agencies and private companies to develop technology applications that automate complex processes once handled by human hands. She has seen technology both succeed and fail, depending upon how the implementation has been handled.

“Technology implementation can often be costly,” she says. “And when the ‘new system’ doesn’t return the expected results and benefits, we see ‘technology disappointment.’ Most often this happens when good technology is implemented on top of legacy or inefficient processes. The importance of defining—and making consistent—processes before technology implementation is often underestimated.”

Yet when people do take the time to think through the process they are trying to automate—that is, analyze step by step the tasks to perform a job function—the benefits can be long-term, stretch across the organization, and more than repay the initial investment.

Huey gives an example. “In the water industry in particular, the amount and types of available data have mushroomed over the years, as have regulatory mandates and reporting requirements. Working with clients, we’ve analyzed the workflow and parameters necessary to support operational and maintenance decisions and enveloped them in a ‘toolbox.’ This toolbox, based on Geospatial Time Series Management (GTSM) technology, can translate temporal and spatial data on the fly into the right units and right format to allow users to understand and optimize system performance. Reams of data are converted into usable information through a simple point-and-click process.”

The time savings, and therefore cost savings, of such an automated system are evident, but what has emerged as a secondary benefit of the GTSM application is the framework it offers agencies for their operation.

“To build an application that would automate the process,” Huey explains, “we first had to document that process and how data flowed through it. This meant interviewing not only managers, but also the day-in, day-out data users, recording how they gathered data, how they used it, and how they transmitted it. This, in effect, resulted in an operating platform for the business.”

Knowledge Collection

This process becomes more meaningful when you consider that the many senior—and knowledgeable—water utility managers are in their 50s and anticipating retirement. With fewer younger managers ready to step into their positions, the “operating knowledge” of the agency could significantly diminish. Then the GTSM Toolbox becomes not merely a technology tool for generating information quickly, but also a knowledge management system that preserves the cumulative experience of the organization’s managers, according to Huey.

Similarly, the firm’s GPMACS (Geographic Permit Management and Compliance System) application captures permit compliance requirements for clients who manage permit requirements ranging from just a few to several thousand. “Whether for a smaller land developer or a large government agency, automated notification of due dates minimizes costs and human error,” Huey says. As an extra benefit, the system also houses compliance history when the land is sold.

Huey adds that any request for application development often brought to light the need for an examination of the business process itself simply because the required system documentation forced it. Though important, the step was usually an afterthought as focus was always predominately on the tangible application itself, and not the underlying documentation.

“We’re seeing a change now,” she says. “Several years ago, people would implement technology because it was becoming the ‘norm’ and gave the perception of quickly improving operations. A lot of money was spent without measurable return on investment. This happened, most often, because problems in the underlying business process itself were overlooked. Today we’re in a phase where people are smarter in their approach. It’s evident in requests for proposals and qualifications, where they’re actually stipulating that process analysis is the first task in the job.”

Interaction, Communications, and Improvements

Lou Amadori is a program manager in PBS&J’s Management Solutions Division who also welcomes this shift in perspective. With 37 years of hindsight, he says that in earlier days, software and hardware solutions were promoted as “the solution to your business problems.” Usually overlooked, he says, was the crucial first question: What is the problem?

Amadori recalls the instance of a manufacturer that had the goal of achieving cost-effective global manufacturing. “The company found a 6- to 8-week period was required for important manufacturing information to be distributed to various global production facilities, resulting in an estimated $100,000-a-day loss in time and revenue. In doing an analysis of each business unit, it emerged that all employees were doing their jobs correctly and the supporting software and technology were sound.”

But further in-depth analysis of the enterprise business process uncovered a critical flaw. “To save on postage,” Amadori explains, “a cost-conscious business unit in shipping held mailing containers for up to six weeks to guarantee they were filled. While one business unit’s goal was to provide manufacturing information globally in a timely manner, the shipping business unit had a goal of saving money on postage.”

According to Amadori, each business unit process was fine, but the interactions and communications within this organization were based on individual business unit goals—not the enterprise business process goal.

“Any enterprise,” he states, “is a constellation of people, processes, and technology. The alignment of all three, in support of enterprise goals and objectives, is essential for success.”

Once an enterprise has accomplished this alignment, managers cannot sit back and relax. Business processes need to evolve to keep pace with market changes, organizational growth, and advances in technology, says Amadori, with continuous process improvements as important as business process analysis in keeping an enterprise operating at peak efficiency and effectiveness.

“Time and again,” he recounts, “I see process analysis taking place within individual business units—‘silos.’” Yet business processes run across an enterprise. Each silo takes information from, and provides information to, other silos. When strung together, this chain of events becomes an enterprise business process. Efficiencies are identified and effectiveness is realized when the interactions that take place are understood, documented, communicated, and matured.”

Amadori states firmly that his clients have all the answers to their problems. “They’re the experts in their disciplines after all,” he says. But like his clients, he knows that sometimes it takes an outside observer to initiate positive change. “By identifying the scope of the need, asking the right types of probing questions, and applying personal experience, the observer can provide an unbiased portal to the problem—and the very hard question, ‘Why?’ that will lead to process awareness, improvement, and maturity.”.

Once the problem is understood and defined, Best Practices can then be articulated. “These arise from the nature of the business,” says Amadori. “In identifying a problem, the manager comes to understand what his company’s practices are, observes what others in his field are doing, makes a comparison, and comes to define what is best for the operation.” A good process management exercise inevitably yields these key performance indicators. For organizations seeking certifications, good process management and documentation serves as demonstrable proof of quality.

At this point, the organization may be well on the way to establishing a knowledge management initiative. “Policies, regulations, procedures, and standards influence your business rules and processes,” says Amadori. “Once you know them, document them. Then, when you are improving, maintaining, and enforcing them, you are effectively managing your knowledge.

“And by the way, enforcing is no more than enabling people with the tools (manuals, training, guidelines that change the way they interact) to follow the processes.”

Getting the Most from Technology

The type of tangible guidance described by Amadori facilitates not only the efficient and consistent execution of processes, with benchmarks for managers, but also the alignment of technology initiatives with business goals.

PBS&J Senior Vice President Bob McQueen explains, “Technology is getting less expensive all the time. Things that agencies and smaller companies once didn’t think they could afford, today they can. In fact, in talking to our clients across the country, it’s not the price of technology that worries them, it’s the cost of doing business—rising energy, benefits, construction costs. So, to compete successfully, or run at peak performance, they need to wring every bit of value out of their existing resources. And one of their prime resources—because it is affordable!—is technology.”

According to McQueen, to be really maximized, the underlying processes that drive technology need to be understood and streamlined. “For every dollar a company spends to undertake this examination beforehand, it saves $10 on fixing a system that’s not doing what it was supposed to after implementation,” he states.

Managers often presuppose that undergoing what some call “process management” or “process improvement” is another way of saying “eliminating positions.” Not true, says McQueen, who points out that the focus should be on ensuring functional fit—that each job title is in its logical place in the process. “Sometimes we suggest clustering people a certain way, to reduce duplication and parallel paths,” he explains. “Cost cutting alone is self-defeating because it cuts to the core ability of the organization to function.”

Government agencies and companies large and small are looking to technology for help, perhaps because regardless of size, organizations in our interconnected global economy are grappling with the same problems. Infrastructure costs are soaring. Labor is expensive—given the high cost of health care. Energy supplies are volatile—boosting oil prices. Money is tight—unfunded federal mandates are forcing states to find ways to meet added regulations without additional revenue streams. And waves of baby boomers are retiring, leaving companies scrambling for workers, paying them more, and all the while wondering how to capture their knowledge before they walk out the door.

In this universal environment, there’s one strategy that works for everyone: “Do more with what you’ve got,” advises McQueen. “This is the way to establish a good growth path. And you do that by digging into your organization, really understanding how it works, then managing to its needs. Most times, that simply means managing smarter.”

Making Sure IT Fits

Still debating his public declaration that IT doesn’t matter, Nicholas Carr acknowledged in a recent interview in Fortune Small Business magazine that companies can gain an advantage by managing information technology better than others. “It’s important to remember, though,” he added, “that that’s a management advantage, not a technology advantage.”

Bob McQueen elaborates: “The focus should not be on applying technology. It should be on developing management solutions. Develop the right operational strategy based on best practices and make sure the technologies fit. That’s just good business.”