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Most technology projects fail.
Why? Because organizations think technology can solve their problems. It cannot.
Software is only a tool. Just as a hammer can't bang a nail by itself, software depends on people to make it work effectively. Ironically, the more advanced technology becomes, the more dependent organizations become on people. Unless people are properly trained and understand how to use technology to the organization's best advantage, the organization will never achieve the return on investment (ROI) it is capable of achieving.
End users must not only understand how they can use the technology's capabilities, they must understand its overall purpose and what it can accomplish for the organization. They must also learn that the alignment of technology with the strategic goals of the company only begins with the implementation. The project may be completed, but process improvement is continuous.
But training, like the technology your company purchases, is also only a means to an end. The foundation on which any technology project is built should be Business Process Improvement (BPI).
BPI can reduce costs, expedite time to market, increase customer satisfaction, allow your company to take advantage of new and growing markets, and improve the overall efficiency of your operations. The result is increased profitability. Any company can buy new technology. It's how the new technology is used that creates a competitive advantage.
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Capability vs. Results
For decades, technology has improved at a rapid rate. Computer speed has consistently doubled every couple of years and is expected to continue to do so for the foreseeable future. New technologies, such as three-dimensional circuits and nanotechnology, hold the promise of ever-greater advances.
And yet most organizations still are unable to use existing technology effectively. The Standish Group reported in 2001 - its most recent report - that only 28% of IT projects are completed successfully. And that's an improvement over previous reports.
Processes and People
For technology projects to produce a positive ROI, experts agree, organizations must consider processes and people (See Chart 1.). Don't take our word for it. Consider what some of the industry's thought leaders are saying: |
- In his new book, Best Practices in Planning and Management Reporting, David A.J. Axson concludes that, "... many technology investments have failed to deliver the expected returns, not because of technology failures but because of poor process design or inadequate training and education. Too many investments have simply automated inefficient processes or have delivered incredible functionality that no one fully understands how to leverage. It is only the combination of the judicious use of technology, optimized business processes, and suitably trained and motivated people that can realize the true value of a technology investment."
- A recently published study by Meta Group found that the majority of ERP implementations are not driven by ROI, but by strategic considerations, such as a need to replace obsolete platforms. Meta found that ERP projects were not having the desired improvements to supply chain management, adding that, "It has been Meta Group's position that this was more of a problem with people, processes, and data than with technology."
- "Most organizations deploy ERP, and sit back to wait for returns," Brian Pereira wrote in the October 2003 issue of Network Magazine. "And when returns fail to come in, the ERP is regarded as a failure. It is important to understand that ROI comes from the process improvements supported by ERP not from ERP software alone."
- According to Business Week, an estimated 80% of productivity gains result not from technological innovation, but from "changes in management, organization, and human resources;" that is, from BPI.
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Omnion Consulting agrees with these findings. Our methodology is based on them.
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