There’s the human factor to consider.  Photo: Workers at the Jamaica Plain Post Office, 71 Green Street, Boston, 1920.  Boston Public Library, CC license

Have you ever spent, say, half a million dollars and nine months of effort with new software or changes to existing systems for purposes of automating processes, only to discover that afterwards the processes are just as inefficient as they were when you started?

I’ve worked on several of these projects.  People claim they can save hundreds of people-hours per week if only …. Usually these projects require custom development of existing software or additional software to eliminate process steps.  Why do these efforts fail to deliver promised benefits?

A ‘soft’ or hard-to-prove ROI .  Frequently labor savings from automation do not result in actual reductions in labor cost; instead the argument is made that the work force can engage in more “value-added” work.  Consequently, if you had 30 people processing customer orders before the automation project and 30 people after, it’s still possible to call the project a success, because you can say that now the customer service team is pursuing more “value-added” work.  But is it?How do you know?

A tendency to stick to comfortable work routines .  When people have been using the same systems to do their work for 10 years, it’s very hard to change their routines and not to do certain steps inside those systems because the steps are no longer necessary.  People are going to do what is comfortable for them, especially when they see only a marginal benefit to changing.  You need a big change management campaign to ensure new more efficient practices are followed.

Higher than expected  costs to modify software .  It is also a human tendency to underestimate costs of making changes to existing software.  In the case of ERP systems this cost can be astronomical – not so much because a lot of hours are needed to modify the software – but because the original code was never intended to be changed in the way we want it to change.  You can only do so much change before the entire program has to be overhauled.  Everything inside a complex software program is interconnected.

So what do you do? 

Avoid big and expensive modifications to software as a way to automate business processes.  The people who created the software had a specific purpose in mind; that purpose may or may not be compatible with what you imagine to be a more efficient business process.

If you want true automation, outsource the process altogether .  Taking pieces of a process and eliminating them through software modifications might be minimally helpful, but it’s not a big enough change to modify behavior.  Yes, to make a process more efficient you may have to remove it from those people currently performing it.  The adage about teaching an old dog new tricks is true.

Outsourcing the process does not mean you can – or want to — eliminate whole departments.  But it does ensure that certain activities – non value-added processes – no longer exist within your organization, for anyone to waste any more time on.