Capacity Planning Variable -Technology Factors
“The most exciting breakthroughs of the 21st century will not occur because of technology but because of an expanding concept of what it means to be human”- John Naisbitt
Technology is the great equalizer between small and enterprise businesses. Despite the historical success, nobody expects that a horse drawn wooden wagon would outproduce a modern diesel truck. Though the technology is less than 200 years old, the truck has replaced a technology (the horse drawn wagon) that had been used for 1000’s of years. This advantage can be calculated using a “Technology Factor.”
The first step is calculating your organization technology factor. Start by comparing your technology, against your competitors and your industry. This comparison of technologies, inside your sphere of influence, is your Technical Competitive Advantage. Technical competitive advantage can be a negative, positive or null number. Within the organization, we also measure Technical Utilization. Most organizations utilize less than 5% of the potential of their technology. (See our article on how to invest in technology.) The technology factor is a measurement of competitive advantage and technical utilization.
Technical Factor = Technical Competitive Advantage * Technical Utilization
The analogy: A simple analogy would be loading a truck. Nobody gets 100% utilization of the truck bed. Say you got 5% utilization of the potential of the truck bed. Then increased that utilization to 10%. Thus, doubling you companies truck bed potential. If the rest of your industry only used 5% of the truck bed, your organization would have a competitive advantage (Note: 5% utilization is the standard norm in most industries when utilizing digital technology). If the industry standard were 50% utilization of the truck bed, there would be a competitive dis-advantage.
Technical Advantage / Disadvantage
“How you gather, manage and use information will determine whether you win or lose.” – Bill Gates
There is a tendency to assume that technical advantage comes out of the IT department. The reality is quite different. The technical advantage comes when a business problem is solved more efficiently than other competitors. Who better understands a business problem, better than a business expert. The reality is,
“All technical problems are actually business problems disguised as technical problems.”
Solve the business problem, and the technical problem resolves itself. It is tempting to assume that all technical problems should always solved by technology experts. Though it seems counter-intuitive, 50% of the time technical problems fail to be solved. We see time after time that this is because the problem is not really a technical problem. Give the business expert and understanding of the technical problem and together the business and technology experts will solve the problem 100% of the time.
"The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency." – Bill Gates
A technology factor can be good, or it can be bad. There will be two considerations when measuring technical capacity and Sales Capacity. The first is how well your technology measures up to your competitors. Is your technology worse, the same as or better than your everyone in your industry? The second component is how efficiently your organization is utilizing the technology. 100% utilization of a poor technology (compared to competitors) will gradually fall behind. At the same time 5% utilization of technology that is better than everyone in your industry will be a temporary competitive advantage. Once someone can utilize your same technology at 6% (compared to your utilization at 5%), then your organization risks falling behind.