The People Cost of Technology

For decades the focus of business and technology solutions has been on the acquisition and implementation of the tool. In the dawn of computing, hardware was the scarcest portion of early information technology solutions and IBM mainframes, which cost $1MM, were a large competitive advantage. In the 80s, we saw the rise of ‘micro-computers’ and the emergence of the ‘personal PC’ that led to the giants of technology that ruled the 90s: Microsoft, IBM, Sun, and Apple. The post-2000 era that followed saw the scarcity of yet another layer of the value proposition melt away as hardware costs dropped quickly. The new century brought in an age of abundant hardware and a rise in the value and importance of software. Before software, most of the inner workings of a technology solution were hidden behind inflexible, complex hardware and early software. Developing solutions that were easy to use was prohibitively expensive so few companies did so. The creation of the spreadsheet, for example, was an innovation for PCs because for the first time a single person could summarize and calculate data in ways that previously took teams of people. But most people still find spreadsheets difficult to use and 95% of all spreadsheets created are static simple summaries of data. Few people can really make a spreadsheet dance with complex calculations and most of them work for your bank or investment firm and get paid well for that skill. The more recent revolution of mobile apps and ‘The Cloud’ have raised the bar on usability and significantly lowered the hardware costs involved in delivering value to a businessperson. In some cases like Google Apps, the hardware is actually subsidized by advertising allowing solutions to be delivered to businesspeople at no cost. This lowering of development and distribution costs of technology solutions finally brings focus on a cost area that I think has been a hidden cost of business solutions: the people cost of technology – the training and support of a solution. For decades a company assumed that when they bought a new technology solution, the company would have to invest in training the people who used it and that their IT department would need to add additional resources to properly support the new solution in order for the company to achieve the productivity gains intended. Today, companies can assume similar hardware and software costs around different solutions but the value comparison now includes two questions that might not have received as much attention in the past: How much of a pleasure is the solution for my team to use? How smoothly can we deploy and support the solution over the long term? Cloud-based solutions definitely have an advantage in these two areas because they are usually easy to deploy, needing only a browser or mobile app in most cases. This advantage will be noticed by all software companies, and I expect overall software usability to significantly increase in the coming years. The companies who do not pick up their game in these areas will begin losing in the marketplace and eventually be disrupted. Not all business solutions will provide their value over ‘The Cloud,’ but I think the most successful companies will look at problems from ‘The Cloud’ inward and work towards minimizing the costs and risks that are sitting inside their customers’ locations. The right balance between security, privacy, cost and cloud will be achieved over time, but like any revolution, many paths will be explored and forward progress will happen at staggering – sometimes blazingly fast – speeds, while at other times seeming to stand still. One thing is certain to me, ‘The Cloud’ is an important ingredient in any successful technology solution in the coming decade. So how can your business spot these future winners when looking at the many technology solutions for the different aspects of your business? Here is what we look for here at Sinu and maybe these attributes show up in some of the solutions you are exploring: ● Is the solution to a problem clear and does it make sense to your team right away? Some solutions that have not invested heavily in usability overcome this with an educational sales process. Some tools need a lot of clarification about how they work and how they help your business, but the amount of time spent learning how the solution will help should be proportional to the financial gains the solution will have for your business or how much risk and cost it prevents. A solution that can be understood quickly by your team will have an easier time gaining fans and internal champions. Having these promoters of the solution will not only help with implementation, but also bring more people with great ideas into the efforts. Solutions that are not a pleasure to use will be resisted and significantly increase your training costs. ● How mobile is the solution? I would say, if at all possible, find solutions that have mobile apps for Android and Apple iOS today. These are companies that are investing into the future and might bring value and improvements to your business more quickly. Make sure their mobile app is as good as the games you see the younger people playing – there is no excuse for poor usability in a mobile app, so look for the solution that can keep up with the world. ● More for less. Unless you have been under-budgeting in an area and starving it for funding, you should be able to do more for less in every area that technology touches. For instance, hat the ten-year-old phone system is ever going to be able to compete with a modern communication system that not only emails you the voicemail, but also transcribes it for you. Budgets need not be starving in an area if cost savings are to be found. The same reasonable budget will get you more value today than ever before from a technology solution so consider that in your budgeting process. ● Pay attention to the hidden cost of how pleasant a solution is to use and don’t forget about the deployment and support costs long term. Your IT support team can help you understand the second support costs but generally more software and less hardware are good starting points. Look for beauty in the solutions you review. At Sinu, we often find that pleasant usability is an indication of deeper respect for simplicity and efficiency in all parts of the solution.

Understanding the rhythm of your technology

An interesting article on Smithsonian.com has pointers to a lot of compelling information about why people like music and what benefits humans have from feeling better when they hear music they recognize.

One of the theories highlighted in this article is that the repeating patterns in music create a mental game in the brain where it tries to predict what will come next and the brain rewards itself for being right. A well-known or catchy tune is easy to predict, especially if it sounds just like all the other tunes like it.

From my music theory studies in college, I can confirm that music is highly repetitive and when masterfully composed is beautiful in your brain. Beethoven’s Fifth can be arguably reduced to being the repetition of just two notes. That is mastery at the highest level and a pleasure to listen to.  

Apparently the human brain has developed this reward system over hundreds of thousands of years to survive. I guess seeing a tiger and being able to successfully predict that it might kill you is good for survival.

So what does this have to do with IT? (You know I would have to try to related it to what we do here at Sinu…we see everything we learn as an opportunity to help our customer’s businesses be better.) I think most of the stress and dissatisfaction from technology that businesses feel is their inability to predict how it will behave.

Without good knowledge about how their technology works, some businesses tend to close their eyes and pray...ignoring the rhythm of the product cycle. Businesses are in a better position when they can predict how their technology will change and how it might be disrupted. This might seem hard to do, but doesn’t have to be if consistent long-term effort is made across a few areas:

• Simplify: Reduce the number of solutions you have in your business. Are there any redundant solutions? Can a solution in one area expand to add value in another area being handled manually today? We work with our customers to explore this with the software companies they trust for business solutions.
• Embrace the natural cycle of Business Solutions: There was a time when Smokey the Bear would encourage everyone to prevent forest fires. More recent research has come to realize that just delaying the change in some ways causes more problems and that 70 years of dry brush can sometimes cause an eventual catastrophic and massive forest fire. The healthier approach has been to introduce controlled burns and to create a replenishing cycle for the land so that new growth is introduced predictably and at a smaller steady rate that does not get out of control. The same can be said about a company’s technology solutions – do not try to extend the use of a solution beyond its natural cycle. If that accounting system is a few versions behind, the business is amassing dry brush that could spontaneously combust at the worse time. Most software companies today run on a 1-3 year cycle for new versions. We work with our customers to plan regular upgrades of replacements of all their business solutions and hardware.  With a planned approach any disruption is predictable and appropriate contingency plans can be put in place so that work continues.
• Create a cyclical budget: Some companies try to spend “once” and then prevent spending again in an area until something breaks. This creates an unpredictable rhythm to your business that is definitely not pleasurable. Plan to upgrade or replace your hardware and Business Solutions within their natural cycle (2-3 years for hardware and 2-4 years for software). By the time it is 75% through its natural cycle, the replacement planning should start for the next iteration of that solution.

These are just three of the many overarching rhythms we encourage Sinu customers to work within and can advise on. Once you have most of your technology following a predicable frequency, it all starts coming together in harmony to create a beautiful song leading to happy people and efficient processes.

When is your hardware ‘good enough’? Creating a hardware replacement plan to support productivity.

The consumer space gets tons of research because it tends to be a global and large business space. This article from Tech.Pinions (3/22/13) explores what happens when everyone already has a smartphone. It outlines the changes in ways new products are introduced in mature consumer markets – when you are no longer selling to people who don’t have that product but instead to people who are upgrading their previous version of that product.

For example, we are well into the stage where every business has a desktop or laptop for each employee. Today, companies are trying to find the balance between whether they should go all laptop or save money by continuing to buy desktops, not to mention where tablets and smart phones fit within company spending and support costs.

Businesses need to start thinking about their hardware spending the way Apple and Samsung will target their potential customers: focus on the features that really matter and on the people they matter for.

Can half your company run on desktops or is mobility so important that everyone should have laptops? Are you ready to commit to supporting tablets and smartphones?  

You may think that these devices never break but the reality is that Apple, Samsung and other companies are doing a good job of keeping their replacement cycle to around one year. This means over a 3-year cycle you are spending more on these devices compared to a traditional desktop. Is your budget ready for this increase? Make sure as a business you are ready to commit in budget, not only in preference, for tablets and smartphones, and plan accordingly for the maintenance costs and replacement cycles.

There is also the cost and efficiency of the solutions you have in place today. Is that accounting package ready for tablet use? If not, when do you plan on upgrading it so that it is? There is a strong interdependency between the hardware you use and the systems your company relies on. Make sure they are in sync and if mobile is your focus, your solutions should be strong on this front.

Bye-bye 7-year hardware cycles. There was a time when companies could keep desktops for 5-7 years. This was also the era of WordPerfect. Those days are over. Now many people are upgrading their smartphones every 1-2 years. The desktop and laptop makers have taken the liberty Apple has given them and greatly accelerated their replacement cycles. Intel, software makers, and the shifts to web browsers and the cloud, make a 3-year cycle a must. If you are running computers that are 4+ years old, you will find they won’t run the latest OS (Windows 8 or OSX). 

To drive my point home, a local charity recently rejected my donation to them of an iPad1 – and that is only 3 years old (released April 3, 2010). Schools and charities are concerned that any apps in the iTunes store now require the latest iOS (6.x) so they do not want to accept devices they fear will not run the apps they think people need. 

So make sure your budget reflects a 3-year replacement cycle on desktops and laptops and a 2-year cycle for mobile devices. Your business should be proactive about defining what is ‘good enough’ for your company and its replacement budget, and track where your hardware stands in this cycle. You will find that with today’s 3-year hardware cycle you should budget to replace 33% of your desktops and laptops every year to stay close to this replacement cycle.

The better you plan this budget, the less surprised you will be when the costs come along and the less likely you will be to try to stretch the use of hardware past the point of slowing down your team. Nothing costs more than your people’s time so make sure they have fast tools to help them deliver the most results for your company.