Leveraging IT or electronic record keeping

As a part of my day job with KPMG, I work with many financial institutions consulting then on their Technology aspects. Indian Financial institutions – especially private banks and funds – aim to leverage Information technology to improve their operations and financial control alike. The top managements of almost all reputed institutions are quite bullish on using technology in all spheres of their work – however when one comes in close contact with the way technology is leveraged on ground, one starts questioning the efficacy of mere top management commitment.

What I have observed is that for most line managers, Information Technology is simply about mapping the existing processes on the IT systems, resulting into only the record keeping process getting digitized. The process continues to operate with the same mechanics as before and in effect the process re-engineering opportunities, that an IT implementation offers, are lost.

As the Harvard professor on enterprise 2.0, Andrew McAfee points out on his blog (What I Learned About Fidelity) –

… the difference between simply re-engineering a business process on a whiteboard and embedding the new way of working with IT. A process embedded in technology is more standardized, repeatable, and amenable to monitoring than one that’s deployed only with memos, manuals, and training and enforced via audits and checkups. Technology can improve many things. Of these, one of the most important yet least appreciated might be the ability of process innovators to deploy their new designs, and to have great confidence that they’ll be executed as designed.

The entrepreneurial insight behind each of these firms, I found, could be (very) loosely summarized as ‘Wait a minute - here’s a process that isn’t working very well. It takes too long, costs too much, and/or delivers unsatisfactory results. We can make it work a LOT better by applying some technology to it.’

Why line managers resist process re-engineering is a discussion that lies in the domain of change management experts, but I will list out a few obvious reasons here:

1. they tend to loose control over the process, the moment some controls are embedded in the system than left for them to decide.
2. process re-engineering requires training of workforce which will create resource management problems in the short term
3. after training, their will be a learning curve for the resources and during that time, operations will slow down
4. simply don’t want to devote enough time that the re-engineering project will need

All the above reasons can be overcome by an efficient program management initiative managed jointly by the external consultant as well as top management designates. Unfortunately most organizations fail to appreciate the need for such a program management office, and hence most projects fail to achieve the full potential of savings (over a long term) which they are aimed at.

If someone out there is listening – especially either in top managements of organizations or with consulting honchos – would request to provide some more insight to this matter.