One issue is always discussed when we work with clients on their business challenges – productivity. The cost of labour in Australia means that human resources are most likely the single biggest overhead for business. The challenge for management becomes maximising productivity by providing business tools that have a true multiplier effect. This is interesting, as many managers can lose focus on the role that IT plays on productivity in their organisations. They can see it as an expense to chip away at, not a tool to drive business performance.
This was highlighted when one of our clients was talking to me about the culture challenges at their organisation. Morale was poor and the focus was on things that were not working. It had become a can’t-do rather than a can-do culture. He was puzzled and couldn’t understand why things were deteriorating and productivity was slipping. I returned back to the office and reflected on our conversation. This prompted me to go through our support tickets for that client to gain further insight. It became apparent that we were also experiencing a fallout from the cultural issues at this organisation. Their user to ticket ratio was significantly higher than other clients. Although the issues were quite broad in nature, I formed the view that general network performance was at the heart of this anomaly.
The culture of management at this organisation was at the heart of the problems. They were very good at austerity and managing their Capital and Operational expenditure. One could say they wrung every last penny out of their plant and equipment. Three years prior, we replaced all the PC’s there and the primary focus was price. Therefore we installed the lowest cost machines and the smallest possible monitors. I figured this could be at the heart of the staff grumblings, but no one was saying it! Normally we expect to get 4 to 5 years out of PC’s before they start to affect productivity and morale; however, in this case we were starting from a very low base so perhaps 3 years was all we could expect?
So I went back to the client, armed with my evidence and a big fat quote. It was tough and I did walk out of there with a limp, but we did get a rejuvenation project across the line. It consisted of good quality, sensible, business grade PC’s and other network components. Three months after the rollout and during a follow-up meeting, the Managing Director met me with a big smile and a firm handshake. It seemed as if the PC refresh made most of his morale issues disappear. Perception is a funny thing; a simple thing like a PC refresh seemed to fix websites, ERP systems, printer performance, spam and even the voice quality on the phone system.
So this brings us to the old age question of cost vs value. Spending big dollars on expensive tools does not always produce a valuable result. Sometimes a low cost solution can result in an amazing outcome. I guess the point is that we as managers need to have one eye on the balance sheet and the other on outcomes. IT like any business tool has to offer value, which is quite different to low cost.
In this case the monthly salary bill was somewhere about $100k. With amortisation over a 48 month period, the PC refresh was adding about $1k a month to their expenses. So the question is, if your salary bill is $100k would you increase it to $101k to improve productivity and morale? My bet is yes.