Slow boot-up

N. Nagaraj

Bharat Kumar

In the April 2001 edition of the Technology Review, Andrew Odlyzko, head of mathematics and cryptography research at AT&T Labs in the US, says, ``Technological changes take years to diffuse through the economy. Contrary to popular wisdom, the Internet is no exception.''

If the Net is no exception when it comes to acceptance amongst users, after all the hullabaloo we have heard the last two years, then where does technology in the software user industry stand? (The user industry includes users of technology in financial services, telecom, manufacturing, the media and the like).

IS there a lesson for software providers here? Just because technology progresses at a blinding pace it does not mean that the user is ready to absorb all or part of it. So, what do software providers need to understand to be able to make a difference to the buyer?

Let us look at four technologies that have scorched the media (both print and HTML) in the recent past, much less than they have scorched a path for users:

1.Traditional ERP

2. E-commerce (where your company sells/buys over the Web

3.Wireless technology (an example: your field staff uses wirelessly connected palmtops to update information in your central server in real-time)

4.Knowledge retrieval (as a first step towards using data to power your decisions.)

These four technologies suffer from a few common hurdles and obstacles.

To varying degrees, they are disruptive technologies, which means that people have to change the way they work -- shift from a ``normal'' way of doing things.

When someone has to change the way he works, he expects a pay-off. What is it in your case? If there is no compelling reason for someone to buy your product, then they will not allow a disruption of their routines.

The third obstacle is that of referencing. Most buyers refer to other people when making a purchase decision for a high-tech product. Because the area is high-tech, anxiety over a purchase is very high and an abnormally high number of decisions are influenced by word-of-mouth and referencing (see STAT-TALK this week).

Finally, all hurdles revolve around the end-user, and while a new system might help an enterprise, a number of end-users need to be convinced that it will make a difference to them, individually as well. While referencing, an individual will tend to talk about his or her experience, not the organisational gain.

ERP

Why do people gulp when they think about ERP? It's not just that the technology is a bit intimidating. ERP is so good that you can bring down your inventory and handling costs, and can keep a keen eye on your work-in-progress, and make out which shifts and which batches are more productive consistently, and all that. But when?

There are a few hurdles here:

a.The quality of the information entering the system should be high. Which means, you cannot type in 2,000 instead of 200: mistake! Of course, data can be validated, and in the worst case there are automatic data acquisition systems, but, how many Indian companies have the equipment to acquire information directly?

b.The quality of the modelling should be high. An ERP implementation is mostly customised. It assumes certain basics about the business and then uses some models to help decision-making. What if the modelling is wrong? What if a percentage that has to be 70 is modelled as 80? What if a certain assumption about an industry is actually the hurdle for better utilisation of resources?

c.The results are all too often not actionable. Like some fancy market research, the report is good for talking about but not something that you can actually do anything with. The difference is that you'd better show some results in your performance rather than show the report from the system.

While all these are not problems with technology, these are the issues that need to be tackled. Some of these can be solved internally by the company to make it work, and some of these have to be clarified by the vendor or the consultant handling the assignment. The latter are mainly to do with unrealistic expectations of the client.

The main thing is this: what does the customer take away from the implementation? And, when we say it, there is no point in just talking about the company gaining this, improving that, and reducing yet another thing, but what difference is it going to make to the different stakeholders, and whether the improvement is worth the price not just in terms of the implementation fees and costs but also in terms of the disruption and new systems in place.

While ERP vendors and consultants were getting this right, companies realised quite a few things. One of these was that it is easier to use a systems integrator than ERP, that ERP was too process-oriented to make a completely reliable MIS, and that the Web was fast overtaking them and they better do something about it and with it rather than be stuck to the good old books.

Knowledge Management (KM) systems

KM has been in every manager's vocabulary from the day Peter Senge's book, The Fifth Discipline, came out. And obviously, quite a few of them want to manage knowledge electronically.

Many KM systems are plain and simple intranet implementations, and some of them are extranets. Some dedicated KM systems are also available, and these too are based on intranet and extranet implementations, The difference between having an intranet site that lists experiences and has case books, and a KM system is not often appreciated.

The main difference, of course, when it comes to KM systems is in the reinforcement and the feedback loop. A dedicated KM system will make sure you take away something by using it -- that is how they are designed -- whereas an intranet is more passive, just offering something, but not following up, either by re-inforcing your learning, or by letting you share your experience.

The problem with KM systems (okay, okay, not with the system, but with its users) is that it needs consensual users. That is, the whole group must decide to get on it at the same time. They may require different time periods to get the hang of it, but they must agree to make a go of it, and that too, all of them. And this is where the problem comes in. Some people are, understandably, quite jealous of their own grasp of a specific area or experience, and this makes them quite reluctant to participate. Again, the problem hinges on pay-off.

KM systems have caught on quite well in high-tech industries not because of a demonstration of direct pay-off but because of the kind of people who work in these industries. You are not a good techie unless you learn, learn everything about a new technology, and are able to show it off. But that is not the case for traditional non-high-tech companies. One needs to be able to make employees ``buy'' into the system, and, in a way, you are asking them for all they have -- their experience.

While most managers agree that history is important, and continuity should be a guiding principle of management, they are almost always the last ones to really give up their hold on their experiences.

While they are perfectly willing to implement the system for others and make the economic decision of implementing it, they are quite wary of participating in the process themselves except as an observer to see what is being discussed, and how things are progressing.

The point: KM systems need a personal investment, and one doesn't make an investment unless one knows what the pay-off is. Making clear the pay-off for each individual, however, requires a great deal of searching and probing which most individuals are insecure to carry out. Disruption is bad enough, but investment of a very high-order?

E-commerce

The hype around e-commerce has died. This may be attributed to the death of the hype around the Internet. But some believe that this will rise as a phoenix from the ashes. Obviously because of its potential to cut costs and expand possibilities. Says Mani B. Mulki, Deputy General Manager, IS, Godrej Industries, ``This is the best time to invest in an e-commerce package when the market is very low and the supply far outweighs demand. Interest in e-commerce is bound to pick up within the next 12-18 months when the connectivity infrastructure in India would improve to a large extent. A good implementation should bring an ROI within one or two years. In another four to five years, Indian companies would have no choice but to port business transactions onto the Net.''

But, what is the pitfall here? The ``What is in it for me?'' syndrome is bound to be a stumbling block. The effects of an e- commerce package are not bound to be seen immediately. Mulki sees the gestation period as between one and two years. Which means, a buy-in from those concerned is a must. If a company's clients are bulk buyers, it is an easier task to deal with. But, if its customer is a retail consumer, then the service infrastructure better be in place. As an e-commerce vendor, you may be forced to explain the need for additional investment into a service infrastructure for an e-commerce package to deliver true value. Buyers -- who have not initiated the buying process -- may be unconvinced if they see added or discover hidden costs.

Further, another question that a buyer would ask is: ``if the returns are not immediate, and if the cost of technology only goes down, then I might as well wait a while before investing.''

Sales-force automation

When introduced to the concept, some CIOs are even believed to have expressed surprise that an ERP -- which is supposed to be enterprise-wide -- does not include this functionality, and that they are in for a separate expenditure. Mulki even believes that employee productivity increases 30-40 per cent.

But, sellers of sales-force automation software will face the same stumbling block as do KM systems: the buyer needs to have a clear knowledge of the pay-off. It's a great thing to see your sales representative get into his car, jab in a few numbers on his palmtop, and have your central database updated even before he can start the car. But is the utility value of such an application high enough for the investment itself?

Please e-mail us at eworld@thehindu.co.in if you have queries on computer usage or if you find an interesting way of using the computer.