OpX Insights

Use Technology Wisely

written By Mike Leigh

During the recent vote by the International Olympic Committee (IOC) to select the location for the 2022 Winter Games, a “re-vote” had to be conducted using paper ballots when problems occurred with the new, electronic voting system.  This technology challenge was quite comical when you realize there were only 84 total votes to tally, and everyone was located in the same place.  Why try to apply technology to such a simple, infrequent process?

As a kid in the 1970s, much of the technology I now take for granted (computers, internet, cell phones, etc.) was not available.  Televisions had knob controls, telephones had dials, cars had no airbags, and letters were hand-written and mailed.  Technology has in many ways improved our quality of life, and has saved countless lives.  In business, technology has greatly improved information flow, manufacturing quality and efficiency, and employee productivity.   Our love of technology, however, often leads to poor investment decisions.

I recently toured a local manufacturing plant that was having significant challenges fulfilling their production schedule.  Several months prior to my visit, this facility had installed two very large, complex, and highly-automated machines.  After several months, these machines were still not working correctly, and the workforce did not have the expertise to fix the problems.  When I asked why they were purchased, I learned that it was the “latest technology” that could “solve” all their biggest production challenges.

All too often, organizations make poor decisions when they invest in technology.  In the book The Toyota Way, one of the 14 management principles listed by the author is to “Use only reliable, thoroughly tested technology that serves your people and processes.”  To help avoid making a mistake in your technology investments, follow these guidelines:

  • Conduct actual tests.  Do not adopt any new technology without verifying its reliability and performance expectations.  In the factory I visited, no testing was done prior to installation.
  • Calculate the Return on Investment (ROI).  How exactly will this technology result in greater profitability for the organization?  The factory above invested about $2M in the two new machines.  I’m fairly certain that investment will not be recovered.
  • Evaluate the risk.  Installing new technology is almost always more difficult and time-consuming than expected.  What will the impact be to your operations if there are installation delays?
  • Use technology to support processes, not to fix or replace them.  Technology works best when it supports an already effective and proven process.  In the factory example, one of the existing issues was the inability to consistently make the right part at the right time.  Even if these two machines begin to work well, they will probably still be making the wrong part at the wrong time, but only faster.  Simply “digitizing” an ineffective operation might make it more efficient, but it will still be ineffective.
  • Keep it simple and get only what you need.  Too often I see organizations buy more capacity or features than necessary.  This often results in less ROI, or less productivity because features are used that do not really help the business.  The IOC did not need electronic balloting for such a simple voting process.
  • Beware of information overload.  New technology often provides access to incredible amounts of information that was not previously available.  But all of this information can distract you from what is truly important in your organization.  Collect and use only the information you need.  

In our personal lives, we can enjoy flat screen televisions, iPhones, and satellite radio, even if we don’t need them.  But organizations must be practical and smart with their investments.  Use technology wisely.