We all know about getting a credit rating. Whether it’s for a personal credit card, a supply chain vendor authorization, or the much maligned oligarchy who rate public companies and entire nations. Based on al ion, a score is developed that (attempts) to capture the inherent risk of a credit failure.
How much could firms benefit from getting a Technology Productivity Rating?
What is the risk of a technology failure?
If an objective ratings agency existed that scored a company’s use of technology, how well would other people score your company? Who is the ‘Greece’ of technology?
To rate technology productivity, the rating has to encompass the entire organization and the way in which technology extends to external stakeholders (customers, suppliers, staff, etc). Optimal productivity from technology doesn’t simply mean newest technology. It’s not just about what technology a company uses that matters. It’s about how the technology is used. I met with a colleague in the technology industry recently who went so far as to say there’s still times when a FAX is the optimal technology for a task. It depends on the potential outcomes and workflows.
To date, I think the focus of technology productivity has been too inwardly focused in companies. Companies say, ‘How can this technology benefit us?’ instead of looking at the workflow effects for external stakeholders too. Granted, most organizations are completely overwhelmed simply by this one-sided approach. But if you look closely at some productivity software, part of the “technology” benefit is actually a workflow transfer to external parties. If I had to rate the technology, the score would decline in the event of workflow transfer being masqueraded as technology.
For example, look at productivity tools around supply chain management and recruitment:
Supply Chain Management
As a means to increase productivity, big companies implement supply chain management systems that effectively transfer the burden for account administration to the vendor companies (sometimes they even charge a fee!). For the implementing company, it is great. All the vendor information is keypunched and filed away into the database for free.
The system integrates with the ERP for invoice approvals all the way to point of payment. The internal technology productivity score is high. For the vendor, every new customer could conceivably mean a similar routine resulting is a productivity loss and therefore would rate the technology lower. A vendor with a lot of customers practically needs a Mechanical Turk just for the data entry!
Seeing these scores could be really beneficial when vendors are choosing what customers to prioritize.
Recruitment technology can be burdensome to external stakeholders while being helpful to internal stakeholders in a similar way. The key to recruitment technology is capturing candidate data to enable filtering and search. Some technology in this field is simply transferring the data entry task to the candidate. Each candidate types out their life story field by field, row by row. From the company standpoint, they see the output of the technology. It is good. From the candidate standpoint, they see a time sink.
Taken in isolation, this candidate time commitment is not a big deal. One candidate typing their qualifications one time in response to one job posting is fine. But what happens when the candidate is applying at a dozen jobs? Two dozen? At what point does the opportunity cost of doing a whole bunch of data entry deter the brightest candidates from these particular employers?
The brightest candidates will apply to the companies that DON’T require a massive typing drill first, selecting away from this less productive technology until it’s unavoidable. The overall technology productivity score would take this into account.
For a company purchasing new technology, understanding the opportunity costs both from your perspective and that of external stakeholders and developing a Technology Productivity Rating may not become a formal process. There is no Technology Productivity Bureau, or least, there isn’t anymore. There was… for a short time… an idea before its time… may it rest in peace.
Perhaps it’s enough to look at it from a more macro-level. Ask yourself, is my business technology liberating for stakeholders or, or are they being repressed? Then, act accordingly.
Geoff Devereux as been active in Vancouver’s technology start-up community for the past 5 years. Prior to getting lured into tech start-ups, Geoff worked in various fields including a 5 year stint in a tax accounting firm. You can see more of his posts for GC here.