Dual Pareto

Finding the right balance between labor and IT is never an easy task. A company could always improve flexibility by minimizing any potential over-design, postponing non-urgent upgrades and purchases, and creating temporary applications to test new functionalities (where applicable).

As a matter of fact, when trying to create flexibility, most companies tend to over-automate. This creates a complexity that is usually hard to maintain or reconcile, rendering the system obsolete. The big challenge remains to selectively automate, keeping in mind that each added functionality increases maintenance efforts and reduces the ability to upgrade.

To optimize the balance between labor and IT, management should follow a few principles:

• Avoid over-automation (functionality level ROI). Any overdesign will result in extra costs (e.g., development, maintenance) and always lead to sunk costs for the company.


• Ensure “time is on your side”. While developing a system in a limited amount of time, there often are situations where delaying the development of certain functionalities is of value.


• Create temporary simplified plug-ins. Most IT people do not recommend this solution but in reality, business should drive IT and not the other way around. Using such standard programs as MS Access or MS Excel, a company can develop small and flexible PC-based pilots which will be reversed engineered later and transformed into fully integrated modules of the larger system.


• Involve senior management in some of the details. Help from senior management and from external experts is always a must to ensure that the overall strategy is being followed.

There is always a temptation to implement excessive automation which explains the fact that few companies have successfully balanced labor and IT. Selectively use external help when dealing with large projects. External help should not consist of IT consultants but rather people with the business and functional expertise in the areas you are trying to automate.