This is the third and final article in a series that attempts to answer the question of why companies are reluctant to invest in workflow automation software. In the first article, we dispelled five myths, and in the second we looked at research. In this article, we will try to identify the true underlying reason for the lack of investment.
If you have been following this series, you might be wondering, how else we can find the root cause? We went through a list of objections or myths which we dispelled. We looked at the available research and identified the inability to cost justify, and the lack of staff and skills as possible reasons.
The last approach to uncover the root cause is simply to talk to people going through this process and try to understand the experience. We have worked with managers, administrators, and executives who are going through this process and can identify some common denominators.
A small number, perhaps 15%, are excited by the prospect of making an investment that will help the company increase productivity, lower costs, and increase the value-added portion of their revenue. Another 15% are scared about making a misstep and doing something that hurts the company.
The remaining 70% talk about the same things we discussed in the last two articles. They will list the obstacles or myths described in the first article and the lack of skilled staff and inability to cost justify. The key is not what they say – it's how they say it.
When asked what is motivating these thoughts, they talk skeptically. They talk about how they were promised these same advantages with the last purchase or an investment last year. They may talk about how they are promised these advantages with every investment. The reason they are skeptical is because no one ever provided proof that any of these investments increased productivity, reduced costs, or eliminated waste. In other words, they are skeptical because they have reason to be skeptical.
Howie on the Root Cause of Reluctance to Invest
I believe the real reason companies are reluctant to invest in workflow automation is because the people that approve those purchases (C-level and executives) are jaded. For years, they have heard claims about how each of these hardware and software investments will make things better, but they have not seen any proof. Maybe they see reports of the number of pages printed each month, but that is not evidence that an investment improved productivity.
As a result, these managers, administrators, and executives are skeptical about past claims as well as these new claims.
If this is the case, then managers need to identify metrics that show these investments are improving performance such as faster time to manufacture, reduced expenses, better quality, etc. Traditional metrics and benchmarks include:
- On-time delivery
- Sales per employee
- Rework as percentage of sales
- Average cycle time
Some of the next generation metrics we are testing include:
- Manufacturing cost/piece
- Competitive pricing ratio (% products competitive vs. external bids)
- First-time correctness ratio
- Average time to complete order entry
- Average time to complete preflight
- Pages printed/pages sold
RSA has developed resources to aid in the development of business cases and documenting and measuring improved business metrics, including dashboard reports in their WebCRD product that include metrics such as SLA performance and number of touches.
It does not matter if you use a traditional metric, a next generation benchmark, or a customized measurement, what matters is that you demonstrate that the investment actually improved performance. If your production facility is like most of the companies we work with, there has been a lack of documented improvements for years which means that it may take a while to overcome your boss's well-deserved skepticism. The good news is that once you succeed in proving that your investment increased productivity it will be much easier the next time you decide to make a change.