Many companies that are facing loss profits and extremely high costs due to manufacturing feel that the scapegoat to resolving the problem is technology. The biggest assumption companies make is that a system that has the capability of increasing efficiency and performing multiple tasks will perfectly work with their company. The chapter addresses the rise and fall of technology, in relation to the excessive investments lost based on false assumptions. Technological systems such as Enterprise Resource Planning systems were seen as increasing competitive advantage without completely evaluating its flaws.
It is amazing that technology plays such an extensive role in everyday life from pumping gas to protecting our homes. The cost for technology at its initial growth stage was high, with low returns, sometimes resulting in a massive loss within the company. I feel that companies currently face the same problems of massive spending on IT while failing to receive benefits from the technology.
IT spending tends to go beyond the planned budget because there are hidden costs that are not considered by organizations. Consultants can cost between $100 and $300 an hour, maintenance of the new technology, upgrading the system and the integration between existing systems.
The question I ask myself is, can a company survive without the innovative technology? Innovative technology is almost a must have in order for a company to compete. The level of technology is constantly changing and is not noticeable until the change is so dramatic that it seems almost impossible to imagine life without it. However, this constant change in technology has made it easier to get high quality automation at a reasonable or cheap price. As technology advances and complexity increases, the easy to use technology will become more valuable to consumers.
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After reading this chapter, I asked myself similar questions and strongly agreed that innovative technology is a must. From examples in the past, I usually assumed the first to adopt was the best to succeed. However, the rapid pace of emerging technologies may prove my assumption wrong. If a company adopts an innovative technology before realizing the benefits from the last innovative technology they invested in, money will surely be wasted. As tempting as a new innovation is, companies should determine if it will match business goals and provide the benefits sellers so easily promise.
In addition to the problem you mentioned of IT investments greater than the planned budget, weren’t you shocked at the number of investment projects that took substantially longer than the time planned for? I’m sure many managers plan to use savings provided by the new technology to pay for the technology itself, but if it takes so long to implement, combined with the hidden costs you introduced, the new technology may not provide savings in costs management had planned for.
I was very shocked about the time it takes to completely implementat these projects. I felt that these organizations are full of very intelligent people with beyond average learning ability and I never thought it would take that long to go through the process of completing a new system.
It seems that the biggest problem with the duration of implementation is the hidden costs assoicated with the bugs in the system as well as end users being trained to use the system.
It's just amazing how a group of smart people can make such miscalculations from the cost of the project to the time of implementation.
Can a company survive without the innovative technology? No, today's business environment is increasing so fast from IT. For example, E-Commerce is so important for today's business environment. If the companies did not have E-Commerce, they would loss many of benefits in today's business environment. Innovative technology is almost a must have in order for a company to compete. The level of technology is constantly changing and is not noticeable until the change is so dramatic that it seems almost impossible to imagine life without it.
I agree, E-commerce has been a big drive in innovative technology. I barely pay for services using cash. In fact I don't know the last time I've even went inside the store to pay for my gas, I usually just pay through the card machine at the pump. I don't think we can survive without technology.
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