The Technology Investment Paradox.

• Author: Servino, Patrick

While business leaders have always struggled with technology investment decisions, the recent collapse of the technology sector and the tight economy has only heightened their concern. Leaders continue to see studies reporting that 75% of technology projects fail, yet business strategy gurus emphasize the importance of technology for future business success. In the utility industry, this struggle is further complicated by the uncertain future of deregulation.

On one hand, utility leaders feel compelled to invest in technology to improve service and lower costs. On the other hand, they are concerned about which investments to make and how to insure that they achieve the expected return on their technology investments.

The utility industry has learned the importance of planning to meet consumer expectations of reliable and cost effective electricity. Failure to plan for generating capacity, transmission and distribution system expansions and upgrades, and customer service systems, can literally leave consumers in the dark! Cooperatives, who have a long history of service to their membership, are even more sensitive to the importance of planning. But technology seems so different! Technology experts seem to speak a different language! Technology changes so rapidly, there is always the latest and greatest gadget, or a new upgrade of software! And it looks like you have to be very young to really understand it!

Technology is really no different than any other issue faced by cooperative leaders. The key is to determine how experience with other challenges can relate to technology decisions. Understanding the needs of members and planning to meet those needs is the core of a cooperative's success. Cooperative leaders should focus on planning for the technology that best supports their members. This planning should be done within the context of a broad understanding of how technology can impact the utility industry. Utility leaders do not have to understand the bits and bytes of the technology, but rather, they must understand how to plan and manage technology from a business perspective.

The balance of this article will examine technology in relation to utility business issues and present an analytical framework to insure that technology investments are aligned with the most pressing needs of the business.

BUSINESS ISSUES

Leaders must have a clear understanding of the business issues that drive technology investments. The questions in Table #1 are...