Quantitative vs. Qualitative Returns

Over the last two weeks, I've described ways to earn quantitative, monetary returns from technology investments - through reducing expenses, containing expenses, and generating revenue. And hey, money's great (I'm not going to argue with money), but you know, sometimes, it's not all about the money.

In my classes, I like to tell my students that technology should also do three other important things - three things that aren't money and are more qualitative in nature - and, if your technology investments aren't doing these things, then listen: there's a whole heck of a problem. Something is really, really wrong, and needs to be corrected.

Speed, Accuracy, and Reliability

Shouldn't technology ... make things faster? I mean, really. If you spend a bunch of money on a new computer and if it slows your business process down, how is that helping?

While we're on the subject, shouldn't technology ... make things more accurate? That's what computers are for, right? Reduce error rates? If a ton of money is spent on system upgrades and the computer system spits out bad information (and leading to bad decision-making), how is that helping?

Finally, shouldn't technology ... be more reliable? System's up. System's down. Wibbly-wobbly, undependable, reset this, restart that, pound it until it's working, how does that help anyone?

These are qualitative metrics in the sense that, off-hand, they generally are more felt than measured. Now, you can break this stuff down and attempt to measure time, accuracy, and reliability to give yourself more concrete metrics, absolutely, but intuitively, we can sense if something is faster or slower, more or less accurate, or, generally unstable; our feelings and gut reactions are pretty useful when understanding technology return as well.

In fact, it's the intuitive reaction from staff that gives management's first impression of its return on technology spending.

The Problem of Confidence

If the solution isn't faster, more accurate, and more reliable, there'll be no confidence in the system; users may even develop work-arounds or "shadowsystems" to do something the first solution was supposed to do!

That stuff eventually leads to even more complexity, more processes out of control, more time, more cost, more inefficiency and more waste.

Technology investments should improve confidence in the information system and the business processes it supports, not weaken it, no?

If This Ain't Happening ...

... something is seriously wrong. The implementation went south. The design was bad. The configuration isn't quite right. When implementing technology solutions, management's expectations of their vendor or solutions provider should be clear - the technical solution should do at least one of the following quantitative things:

• Reduce Expenses
• Contain Expenses
• Generate Revenue

And at least one of the following qualitative things (hopefully all three):

• Improve Speed
• Improve Accuracy
• Improve Reliability

Think about it. If you're a small business owner, why would you invest in technology if it was more expensive, cost more than adding additional labor, or generate money? Why would you invest in technology if it slowed stuff down, made data useless, or was inherently unreliable? How could you have confidence in the solution if your provider couldn't demonstrate these aspects of your return to you?

Next time: the power of perception.

R