Are we over-investing in technology?

I drove by a site a while back that truly made me shake my head. I watched as a rather large and very expensive sculpture was being unloaded and erected on a municipal site that was inhabited by homeless people. Apparently, in the municipality in which I live, this somehow makes sense. It may be that the budgeting process is flawed. Many hierarchical organizations subscribe to the adage of “use it or lose it.” So, when we see the fiscal year drawing to a close, we are educated to quickly scramble to ensure we spend any dollars remaining in the operating budget. The logic behind this process escapes most of us. But hey, it’s the way that it’s always been done! Isn’t that reason enough to continue the insanity? When we do this knee-jerk reactive kind of spending, are we adding any value? Or, as they say, are we just putting lipstick on a pig? When it comes to managing our investment in technology, rather than following a rule that dates back to medieval times, there are a few more current practices that can ensure our investment is justified.

Rule No. 1: Build an intake process

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Members of IT departments are familiar with the large number of requests received from various departments and stakeholders for new tools, improvements to existing tools, and defect fixes. The challenge is that with the number of technology applications and tools engaged in most enterprise environments, there is never the appropriate number of human and fiscal resources to undertake every request. The trick becomes how to decide which requests justify the spend. When faced with these decisions at the last minute, we tend to make decisions based on hierarchy, squeaky wheels, or favored vendors. These may not necessarily be in the best interest of the business.

Establishing an intake process means that all requests travel through a funnel that analyzes criteria that aligns with the strategic plan. Those requests that make it through the funnel are the ones that are then prioritized as tasks or projects and corporate assets are assigned to them. If we find ourselves at the end of the fiscal year and are looking for ways to spend money, it should be the requests at the top of the list that are addressed.

Criteria used for an intake process can include the analysis of a risk and opportunity ranking, return on investment, and even the maturity level of the business process in question. It is far too often the case that we throw technology at a process that is fundamentally flawed and expect technology to fix it. In reality, all that ends up happening is that we automate a flawed process. But again, if that’s the way that it has always been done, isn’t that reason enough to continue the insanity?

Rule No. 2: Leverage the investment

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When we look to undertake large-scale enterprise-wide technology implementations such as enterprise resource planning, human resources information systems, or customer relationship management, there is usually a solid business reason. However, what we tend to underestimate is our propensity toward all things shiny. As we build spreadsheets to compare the functions offered by various vendors and their associated costs, are we truly acquiring the absolute best asset? Or do we become blinded by the larger number of functions with the thought that one day they may be useful? While we may resonate with the latest Gartner-favored vendor in their class, don’t forget the many midrange vendors out there offering solutions. Perhaps the upper quadrant vendors have several layers of functions that the midsize vendor may not offer but beware of the tendency to pay for extras that will never be used. A good rule of thumb is to base decisions only on what you know to be true today. The thought that some of the additional functions may be useful down the road is one that brings no value to the table.

There is actually a lot of psychology behind vendor decisions to offer additional functions. We are sold on the idea that we will acquire additional functionality at no extra cost, and it is easy to get caught up in a binge shopping spree. But hey! It’s the way that it has always been done.

Rule No. 3: Build a vision board

OK, maybe not a vision board per se, but investing time to build an infrastructure diagram will pay off in the longer term. Spoiler alert: The longer it takes to put all the pieces together in the diagram means that the level of understanding of how everything is connected may not be as well understood as originally thought. It is not uncommon to find that much of this information exists only in people’s heads, and that is very risky. Once the corporate infrastructure diagram is complete, that’s where the vision board comes in. One can only determine where they are going if they have a good understanding of where they currently stand. Without a detailed and current infrastructure diagram, the tendency is to throw more technology into the mix. Right-sizing is everything.

Rule No. 4: Beware the sales speak

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Inviting vendors into the boardroom to flaunt their wares is a common practice, and after all, it’s just always been done that way. While it is important to see technology in action and to assess how it will function with organizational requirements, the challenge is to separate nirvana from reality. We’ve all said it. “Buy the dream. Live the nightmare.” While that may be a bit of an exaggeration, there are times when it doesn’t feel like it. Sadly, we often learn this after we sign on the dotted line. A new approach that is starting to sneak in is to send stakeholders to third-party training for the applications that are being considered. Do your homework in order to find a trainer with good reviews who understands not only the software but also the applicable business area. Good trainers know the ins and outs and are usually quite eager to share their knowledge. Unfortunately, some proprietary software does not allow for third-party training, and so we do not always have this luxury.

Not all pigs need lipstick

When we look to improve our business processes and the associated technology that applies, it can be easy to become impressed with all of the bells and whistles that are strategically added to enterprise software options. We compare the vendors, we assess all of the value add, and we imagine how useful it all can be. The important point is that we need to be disciplined and research software that will meet the business need and help to mitigate the business issue at hand. When it comes to investment in technology, keep focused on the facts of what is known today, and steer away from inventing potential uses down the road. But even before we travel this path, take the time to draw an infrastructure diagram to ensure that what is happening today is truly understood.

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