Technology s Applied Value

Technology’s Applied Value

A value proposition, not a cost justification, should be developed for each part of the technology spectrum to assess each technology’s overall applicability to the process of the business. Business processes often decompose into a collection of tightly coupled and yet distinct activities without clear lines of demarcation such as brand, staff ability, customer demand, partnerships, rates and customer satisfaction. Each distinct business process step is typically facilitated by some facet of technology, and it needs to be viewed as having a defined contribution to the fulfilment of the process. Technologies that cannot be directly attributed to the performance of the value propositions should be questioned, and companies should seek to understand why the incremental cost is associated with the process. However, sometimes a value proposition is enhanced by the indirect contribution of a technology, such as infrastructure technologies, in which the technology performs a service or function that merely enables other processes to be executed. Infrastructure tchnologies cannot always be justified by quantitative measures such as return on investment, or earned value. Technologies applied for the greater good of the firm must be justified holistically and measured by their impact on productivity and customer service levels. In many cases, the indirect effects are difficult to measure and, if not obvious, must be attributed to intuition. Regardless of which approach is used, technology decisions are no longer the sole responsibility of the firm’s technology group. Technology is integral to the business and must be justified by assessing its potential to the organization’s value proposition. It is important to remember that the acquisition of technology is not just a one-time capital expense, but a continual process in which each successive generation of technology must be assessed on its ability to add to a value proposition. Therefore, it can be said that corporations should minimize the process of justifying the capital expense of technology in order to focus on the timing and application of the technology to the basic value equation (Figure 1.3).

Figure 1.3: : The applied value of technology

In a private interview on project management, Martin Dolan of Misys International observed that:

Often corporate management makes the technology decision and passes the responsibility of implementation to a project team. In many cases, the knowledge gained in the evaluation and selection process is inadvertently lost.

The achilles heel in many technology projects is the lack of continuity in the knowledge and vision of how technology must be applied to a business process. It is typically not a product design flaw, but the failure of an organization to adapt it to the value proposition and adopt it into the mainstream of operations. Projects which are for the most part labelled as ‘technology projects’ should be stopped by management teams. Projects must be focused on business process creation or optimization. Technology is merely a mechanism for realization. Technology projects come complete with a preconceived prejudice as if they were to replace the old technology and labour to meet the users’ demands to emulate the old system. The question that should be raised is if the funcionality of the old system is enough to support the business process, why change it? Reminiscent of Don Quixote chasing windmills, the longing for the old system must be stopped. Technology should change and optimize business processes. Changing the process invariably means changing the way in which the work is done to achieve the goals of the firm. Therefore, a greater return on investment is gained when users develop understandings of the new system and spend energy in its application. Little return is achieved in replicating the old way, which was already deemed inadequate by the decision/selection process.

Lines of business organizations and technology groups should be looking at technology as a mechanism to optimize one or all of three areas: increasing market share by introducing new products; improving customer satisfaction; and reducing the cost of operations by streamlining processes and service offerings. These three areas can be correlated into the value disciplines framework to assess readily the relative value that a technology brings. Technology’s relativity to a firm’s value proposition will be discussed in detail in section 1.5.

That said, corporations today are starting to realize that although technology has been perceived as the mechanism to differentiate oneself in the marketplace, it is in reality only half the value equation. Unfortunately, while technology is rapidly becoming easier to obtain, it is also turning out to be more complex in construction and integration costs, although its acquisition cost is gravitating towards commodity pricing. As a result, one can observe that because any firm can acquire and apply technology equally, technology is no longer a market differentiator. How individuals in a company apply a technology generates the market differentiation. Market differentiation based on technology alone is rare and in many cases does not exist. The next generation of market differentiators will be developed by considering the ways in which an organization applies the technology for product delivery or to achieve higher levels of customer service. In this new business paradigm, technological innovation shifts its focus from the creation of new technologies to the application of technology to a company’s value proposition. How a firm uses existing and new technologies to enhance its product offerings, customer service levels or operating efficiencies is the market differentiator.

This chapter will endeavour to examine the traditional ways in which technology has been applied to business, and how its adoption by society is influencing the formation of new social classes, driving the behaviours of customers and altering the nature of work. Additionally, reviewing the migratory trends of technology’s ever-increasing complexity will illustrate that the original intention of technology is often not its long-term use, but that during the process of continual improvement it transforms society and – perhaps more importantly – customers’ expectations. Finally, we will discuss the use of technology in a broader context in order to provide an overview of how to use technology to compete in a global marketplace.