IT-enabled Entropy

Management theorists would have you believe that IT improves customer service. Technologies from CRM and SCM to call centers supposedly increase customers and ensure their continuing loyalty to an organization. Though it’s hard to disagree with this in theory, the story is altogether different in practice. I do not think that IT has in any way improved the position of customers. 

For example, one would think that massive computerization in banking ensures that customers get transaction information quickly. Well, it doesn’t exactly work that way. Maintain multiple fixed deposits over financial year boundaries with a bank and try to obtain a single statement specifying the total tax deducted at source. Nine times out of ten, your bank won’t be able to give you a consolidated statement and you will have to do number crunching yourself.

Many banks now have Auto Sweep accounts in which balances in excess of a specified amount are automatically converted into fixed deposits. One is full of praises for such an idea, till you come across the monthly statement for such an account. The statement requires solid deciphering to get the hang of it. The reason behind this is not the complexity of the basic product, but the fact that the statement is very poorly designed. 

The hi-tech chair that I use came with a one-year warranty. The chair broke down and I rang up the manufacturer to get a warranty claim. He had a completely computerized system for processing such claims. The first thing that the operator wanted to know was the invoice number against which the chair had been bought. When I rang back with the invoice number, I was given another number to call. Apparently, the company outsourced the repair task but verified all claims itself. 

My final story concerns one of the largest carmakers in the world. When I bought a car the sales staff gave my wife

chocolates and flowers, but did not give the two things really required: an itemized bill for my purchase and an extended warranty book for the three-year warranty I had bought at extra cost. It is now over two years since I bought the car and the company has still not given me the extended warranty book. I go through an elaborate rigmarole every time I need to exercise warranty. The rigmarole consists of my showing the workshop staff the receipt for the extended warranty, the staff faxing the statement to the Chennai head office and then agreeing to honor the warranty. At this point, you must be wondering what this example has to do with IT. You’re right; it has no link with IT. IT enters through another door altogether–every few months these people utilize their databases and ring me up to find out what I think of the. I scream out my story, they advise me to discuss the matter directly with the head office and nothing gets done. So much so, for customer relations.

All these are manifestations of IT-enabled corporate entropy. It occurs whenever there is a disconnect between system designers, implementers and the real world. The causes are insufficient analysis before designing a system, shoddy design, inexperienced people implementing the system, ignorance of human factors, refusal of upper management to get involved in the details and so on. At times I think that most people commissioning grandiose IT projects have no clue as to what they are talking about. They think that software development is like movie making - fill in a star cast, have a novel plot and add lots of extras. Nothing could be further than the truth.

The bottomline Using IT does not automatically improve the quality of an organization’s processes. You have to work on it.

Gautama Ahuja  runs a turnkey software company,

AHC Infootek