posted 1 Jul 1999 in Volume 2 Issue 10
Paradox - Realizing the Business Benefits of Information
Book review by Victor Newman, Director Knowledge Development Centre, Cranfield University.
Author: John Thorp and DMR's Center of Strategic Leadership, McGraw-Hill Ryerson: Canada, 1998. Pp273.
This book promises a unique approach to IT investment in the form of a Benefits Realization Approach. The information paradox of the title is characterised as the difficulty in demonstrating a connection between money spent on IT and business results. The paradox apparently lies in the given idea that although IT is taken to be a good thing, acquisition will not necessarily create more profit. In other words, buying a technology will not necessarily make any positive difference to your business. This book is basically about making sure you ask yourself what you want IT to do for you before you buy it and then about making it happen.
There are some obligatory references to the Knowledge Economy and Knowledge Workers without defining either, and a general assumption that anyone working with IT is a knowledge worker.
What is refreshing is not the style nor the language, but the key messages embedded within a largely repetitive text that this problem is not a technology challenge but a business management problem, one that can only be managed by focusing on outcomes and working backwards to visualise process performance and necessary supporting behaviours. In other words, what do I want? How will I know when I've got it? What have I got to do to make it happen? How can technology help me? Where do I invest at what level to manage risk?
The author's paradox is actually deeper than he realises. Firstly, that IT is in reality not Information Technology at all. The acquisition of what is called IT actually leads to an explosion of structured data that requires translation into a recognisable pattern to create useful meaning or information. It might actually make more sense to call IT something different, like Electronic Media and Transactions. The second paradox lies in the phenomenon of individuals suffering from structured data-overload (not information overload) because they either don't have the time to process the structured data to turn it into something meaningful, or that the structure of the data was determined by someone else who didn't involve the individual or try to understand their work. This is the real problem, or the Business Benefits Catch-22. If a technology is acquired without a Business Benefits plan, no-one is prepared to connect their own performance to the technology, nor do they plan to measure impacts on performance or change their own behaviour to make it work.
The third paradox lies in the reality that IT is merely an enabler, and not of itself a differentiator. IT tends to be sold either as a fashion-item with associations of modernity that can disguise an ageing business asset (if we buy it, we will be perceived as a modern organisation), or as a replacement technology for taking cost out of the business by replacing low-value, paper-based transactions without transforming the transactions themselves or creating new ones.
Whilst the author is aware of the business value issue, this problem of IT being largely a means of taking cost out of the operation through automation and not the source of creating new market and customer value is not fully developed. Value as a concept remains problematical, and ultimately can only be answered by identifying stakeholders and customers, and then defining their perceptions of value which can be both tangible, intangible, direct and indirect.
Consultants trained in lean production, including hoshin kanri (policy deployment), programme project management, and systemic thinking will recognise the tools provided within the Benefits Realisation approach as familiar in structure, attractively packaged, and simply explained. I particularly recommend the 4 "ares" : Are we getting the benefits, doing the right things, in the right way and doing them well?
I think we always knew that IT is not an end in itself, that cumulative purchase will not automatically qualify for IT-heaven. The basic message is a good one, and the child's repetitive question "why?" is a good one to learn and relearn.
Victor Newman can be contacted at:email@example.com