We’ve all seen the commercials. A company buys a new technology product, and suddenly the whole organization is streamlined, the employees are ecstatic, and the customers are all happy. Even the soundtrack changes.
It doesn’t work that way. Technology can be an important component in organizational change management, but typically can’t do it all by itself. And change management is hard. Numerous organizations such as McKinsey & Co. have found that as few as a third of organizational change management initiatives succeed.
The biggest problem with using technology to drive organizational change is that the technology can change a lot faster than the people do, writes Scott Brinker in the Chief Marketing Technologist Blog. “Technology advances exponentially,” he writes, giving the example of Moore’s Law. In contrast, organizations absorb change logarithmically—that is, even more slowly than linear, and certainly much more slowly than technology, he writes.
Sometimes the technology itself drives the organizational change, particularly when it’s disrupting an entire industry, according to “Inside and Outside Forces for Organizational Change” in Boundless Management. “Technological changes are a constant threat, and embracing new technologies ahead of the competition requires adaptability,” it writes. “When media went digital, adaptable companies found ways to evolve their operations to stay competitive. Many companies that could not evolve quickly failed.”
This is what Debbie Narver of Narver Management Consulting calls technology as a driver for change. “The evolution of technology requires you to adapt in order to maintain a competitive advantage,” she writes. “For example, you may be required to adopt emission reducing technology in order to comply with changes to environmental regulation. Or, your customers have adopted new technology which can no longer be supported by your existing technology.”
More typically, though, technology is used in a supporting role, or as an enabler of change, Narver continues. “In this case, you have a choice to adopt the technology in order to increase your competitive advantage,” she writes, such as by using business process management or enterprise resource planning software.
Consequently, it’s important to remember that, while technology can help overcome institutional obstacles to organizational change, it can’t do it alone. No tool, no matter how great, can rescue a broken business process; it’s necessary to look at what changes you need to make in the business process along with implementing the software.
For example, enterprise content management (ECM) software has been used to help link other applications that can’t communicate with each other, but ultimately the business process that created that silo needs to be addressed as well.
“Enablers will help you implement other changes in your business,” Narver writes. “They are not the driving force of change itself.” In other words, to effectively implement organizational change, you need to use technology to support the process rather than relying on the technology to make the change.
“In a technology-based transformation project, an organization often focuses solely on acquiring and installing the right hardware and software,” writes MITRE Corp. in its Systems Engineering Guide. “But the people who are going to use the new technologies—and the processes that will guide their use—are even more important. As critical as the new technologies may be, they are only tools for people to use in carrying out the agency’s work.”
Technology can help support organizational change in three areas, writes Cindy Beck in the Houston Chronicle:
- Companies have reduced costs by examining business processes and eliminating actions that customers do not perceive as valuable, Beck writes. But to truly drive organizational change, companies need to shift their focus from cost reductions to developing innovative products and driving revenue, such as online orders, ticketless travel, and just-in-time inventory management, she adds.
- Looking at internal business processes through the entire company helps identify functions shared by multiple departments, Beck writes. With business process automation, companies can eliminate duplication and even outsource administrative functions such as accounting or mortgage processing. On the other hand, organizations should consider whether the cost of a new technology is worthwhile if it only benefits a few staff members, she warns.
- Companies can also use technology to determine the appropriate level of centralization for a specific business process—fully centralized to leverage a general business function such as purchasing or logistics, or decentralized to help provide more nimble customer response, Beck writes.
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