IoT, Cloud, Industry 4.0 – Technology Trap 2.0?

Little more than a decade ago Office Automation, Electronic Document Filing, Email, rise of Cell Phones, Automated Workflow and Integration of Office Systems with Administrative Automation became the hot topics of the day – and the sacred words for a new era of Efficiency.

While in the 1980-90s businesses and administrations had become paper-heavy, emergence of then new Organization Structures such as Matrix and Four-Eye Principle lead to requirements of multiple signatures of approval under such simple transactions as Expenses Reimbursements and Travel Applications, IT promised to do away with paper, and enable staff to focus more on the real work issues.

What is the reality like?

Some studies suggest that businesses nowadays purchase and deploy more printers than ever. When printers were expensive capital investments, there was one on each office floor – if at all. Now every department has one, if not more. Application forms are now electronic, and so can be approval notes and signatures, but there is a tendency to have it printed… after all, it’s better to have it “black-on-white”. Right?

Email, while seemingly more efficient than snail-mail, has become one of the major Productivity Detractors of the 21st century. What a perfect way to focus on the “Not Important/Not Urgent” items on one’s task list and look busy all the way. Problem solving is now only a button-click away.

Multiple Automation systems with “in-principle” data integration through interfaces have let to sky-rocketing data storage (storage is cheap, remember…) and out-of-this-world data fragmentation.

And while meetings are still mostly manual, there is still no robust system to ensure meeting effectiveness, consistent documentation and follow-through of agreed action items.

Recently at a client I have learned what the drive to automation and digitization has led to. The company had not long ago implemented a world-leading ERP system to automate workflow and reporting across departments. The warehouse manager had developed a habit of keeping inventory records in hand-written notes, which were then converted into an Excel form by Finance. With the new ERP system, the process has evolved insofar that the warehouse manager now maintains hand-written reports, which are converted into Excel by Finance, past back to warehouse manager for verification, past back to Finance with changes, which is now posting the final result into the ERP system, as a basis for next month’s Excel-based verification of the warehouse manager’s hand-written notes.

Welcome to Technology Trap 2.0.

Time and time again organizations tend to throw three things at their inefficiencies: People, Technology and Money. While the implementations of automated systems appear to have reached their objective in giving the upper echelons a peace of mind – having done the ‘right thing’ and producing easier to read reports for them – complexity and inefficiency just increases on the shop-floor and in the business administration departments.

Instead of doing the obvious, organizations – before they commit People, Technology and Money to tackle complexities and improve efficiency – should:

Define the problem – what issue are they actually trying to solve, what is the objective;
Develop a strategy – how can this issue be solved in the most effective way, is technology (and money) really needed, or are their better non-obvious improvement opportunities; resist the urge to use technology to solve non-technical problems;

Plan the change with a focus on the people in the process – how are they doing their work now, what will improve for them, what will change for them;
Execute the change based on objectives, not based on previously committed investments – implement with a focus on whether or not the objectives are met, disrupt if not.

IoT, Cloud and Industry 4.0 bear new promises for an even more integrated work-flow allowing team to work anytime, any-where, creating new ways to solve problems, and enabling individual teams and large organizations to share ideas and collaborate seamlessly. Best practice examples have shown that work-flow automation with cloud integration can result in up to 50% overall cycle-time reduction, 25% operations headcount efficiency, 86% business process flow reduction and can lead to 18% net margin increase.

In order to reap these benefits however, organizations must not skip critical steps to effective change, otherwise we may be reading about the Technology Trap 3.0, fairly soon.

We at Articulate are experienced in helping companies in China and across Asia Pacific to navigate through profound business transformations, organization changes, process improvements and system implementations. Please do contact us for any questions in regards to this article, or for any inquiries for support by Email to inquiry@articulate-and-win.com or by telephone on +86 (21) 6339 1312.

Michael Adick
Managing Director | Articulate