Technology advancement and the productivity paradox – 4: the selection, implementation and phase-out cycle 1
This is my fourth installment in a series on the trade-offs of technology advancement and innovation (see Ubiquitous Computing and Communications – everywhere all the time, postings 168-170 for Parts 1-3.) In Part 3: unique value propositions and blue ocean strategies I began outlining a process for evaluating, vetting and integrating in new productivity technology, with the cost and benefits uncertainties that this entails, and certainly where novel innovations are considered. And I noted as fundamental to that discussion how the more novel and disruptive the innovation under consideration, the greater the uncertainty and risk potential, just as the greater the potential benefit and return on investment.
In Part 3, I outlined a preliminary-step review and screening process. And I noted that I would follow that with a series installment in which I assume a productivity innovation is under consideration that “has met first-cut acceptance or rejection criteria and that it has been found by initial evaluation as worthy of at least trial implementation and use.” I continue from there with this posting with consideration and discussion of a stage 2 trial planning and implementation.
• The most important point I would raise here is the need for systematic processes and for both implementation and for evaluation – and particularly where novel innovations are involved with their greater uncertainties and for both costs and returns.
• That is necessary as that is where you will find and develop benchmarked, consistent determination of monetizable valuation. Consistency here forms the basis for costs/benefits comparisons and both with current processes and technologies and with alternative upgrade options.
At the same time you want your standardized vetting and evaluation process to be flexible and adaptable in accommodating technology and usage novelty. So the key here is in knowing what types of details in the implementation and evaluation process should be set and established, and only changed as a result of conscious, planned decision, and which parts of this should be open and flexible.
• I begin with the flexible in that. New technology brings in new value and sources of value when it works as expected and desired. This can mean many things and certainly as technology can be used to address a seemingly open-ended range of applications, contexts and needs.
• But how this is evaluated as to monetizable value – that should be standardized and set. And that means being able to compare outcomes and value from a single set viewpoint.
• Start by determining the cost of business as usual, using older technology or simply leaving an opportunity area unaddressed. This would be based in the core functionality reasons why a given productivity technology innovation is being considered, and at least as a starting point.
• Now take the list you have developed from your initial assessment, as to what you would want this technology to do for you, and determine costs and returns. And your goal in an initial implementation trial is to see how realized numbers mesh with anticipated.
And this determination has to be quantifiable and grounded in financials. So if a primary reason for bringing in a new productivity enhancement is that you expect it to shave five business days off of the time it takes to generate quarterly XYZ reports, what would this time savings translate into monetarily? If this simply means that these reports will have a few extra days to gather dust after printing, and before a set schedule meeting where they would first be needed at, and the current system in place can always be counted upon to get these reports ready in time and without calling for overtime effort on anyone’s part then this productivity enhancement can only offer non-beneficial change. And at least as far as XYZ report generation is concerned it can only be seen as an extra expense. If getting those XYZ reports would mean processes and decisions that would be based on them can be expedited, and with expected positive effect as far as costs, returns and ability to meet market needs are concerned then this would offer real bottom line value.
• As a benchmark evaluation, determine at least for major expected effects and results what the monetizable value of this new technology would yield.
Note that I am writing this primarily in terms of major expense upgrades and not just generational or more minor updates in a standard software package already in use – the version of Microsoft Office software in use in your business, for example. But even there, at least a rough cut analysis of this type should be taken to decide whether it would make sense to hold a major switchover for all Office users or to simply phase in the new version with new computer purchases, and for key personnel who might specifically need this upgrade now. So in practice, this does not just apply to overtly big and novel productivity enhancements.
• And in this stage 2 setting, you begin developing realized cost and returns data on this innovation, and with your list of actual uses and their returns and costs to work with and not just your pre-test predictions and expectations.
This is where you find for example that along with facilitating documentation needed to prepare those XYZ reports this new tool also facilitates a lot of other processes and activities too – and with their financial impact added into the evaluation too. Or you might find it helps with some unexpected applications but not as much as anticipated with the XYZ reports themselves – take a 360 degree viewing approach when evaluating this new test-stage innovation implementation, and for determining both costs and benefits.
• But bottom line, this is all about testing and validating new productivity technology implementations from a standardized financial impact model perspective.
I am going to turn in my next installment to consider two approaches for test implementing a new productivity innovation and as with this posting I will write that with a focus on novel and disruptive innovations and not simply on minor upgrades.
You can find related postings at HR and Personnel and also at Ubiquitous Computing and Communications – everywhere all the time.