Diminishing a Limitation

Eliyahu Goldratt is an internationally recognized leader in the development of business management concepts and systems. The originator of the Theory of Constraints (TOC), he wrote the book, “Necessary, but not Sufficient.”

Written as a business novel, the story of software and how software alone is necessary, but not sufficient to dramatically improve the bottom line. As a purveyor of software to enterprises, I see first-hand how hard it is to come up with realistic ROI and breakeven numbers for software projects (and more importantly for me, software purchases).

We know that computer systems perform many orders of magnitude better than paper when it comes to storing, transferring and retrieving data. The question is how can technology bring benefits?

Goldratt writes,

Technology can bring benefits if and only if it diminishes a limitation. So what we actually have to do is to stop admiring the power of this technology and ask the next disturbing question: What limitation does technology diminish?

The limitation is the necessity of any manager (in any level, in any function in any organization) to make decisions without all the relevant data.

Up and down the chain of command are decisions made without all the relevant – from building a $1 billion plant to choosing which existing plant to transfer technology. The bigger limitation software diminishes… the bigger the benefits.

And yet, ROI and payback estimates are nebulous when it comes to software that broadcasts your plant/lab information across the enterprise.

Goldratt goes on to explain why implementation of software alone will not increase the bottom line:

We managed organizations before computer technology was available. [L]ong before technology was available, we developed modes of behavior, measurements, policies, rules that helped us accommodate the limitation.

Benefits created by limitation-diminishing-technology are abrogated by keeping the rules that accommodate the limitation. Changes in technology are the simplest changes. Changes in culture (i.e. modes of behaviour, measurements, policies and rules) are the harder.

This culture-change concept rings in tune with the People then Process then Technology concept echoed throughout Jeffrey Liker’s “The Toyota Way.” That software/technology alone is the easiest and that managing people and the process is the hardest.

So while you think of the limitations an intuitive search can diminish against your plant databases, I’ll be juicing up my marketing materials.