Adopting New Technology

Dr. Eliyahu M. Goldratt, the author of The Goal and the father of the Theory of Constraint, describes four questions necessary when adopting a new technology in his lecture Beyond The Goal: Theory of Constraints. Goldratt asserts that an organization can experience order of magnitude improvement when adopting new technology if these four questions are effectively answered before adopting.

1. What is the power of the technology?
2. What limitation does it diminish?
3. What rules helped us accommodate the limitation?
4. What rules should we use now?

The first two questions are relatively easy to answer. The marketing material for the technology or the reason you went looking for a solution to begin with are going to be your source of answers. The last two questions are really the hard ones. That said, the last two questions are the key to realizing the exponential benefits.

In Goldratt's examples he spoke about his experiences with Material Management systems and ERP systems that were new technologies in the 1980's and 1990's. For the vast majority of the companies that implemented these new technologies the expected benefits were never realized. Goldratt observed that the companies that changed the rules around the limitation were able to leverage the new technology to increase revenue by huge multiples. The companies that continued to operate under rules intended to support the constraints that no longer exists might save a little administrative overhead and little else.

Today many companies are moving to the cloud which has the potential to provide the order of magnitude increase to their businesses, but only if they can address Goldratt's four questions.

The power of cloud technology is the ability to elastically scale up or down. Server resources to run applications can be provisioned at the moment they are needed and decommissioned just as quickly. This means your organization can quickly implement innovative solutions to problems with minimal upfront cost. These same solutions can scale up to a global footprint just as easily has they can be deleted if they do not have the expected result.

To take advantage of these new capabilities, old rules will need to be eliminated and new rules will need to be created. For example, most companies have an arduous process for acquiring new servers. While these processes are frustrating to deal with and seem to reduce agility, they are based on addressing the limitations of physical on-premise data centers. Making sure the servers are sized correctly and do not cost too much and are properly capitalized is important as the organization will be making a 3 to 5 year commitment.

When utilizing cloud based elastic resources, the same limitations do not hold true. Development teams have the ability to build applications that only run when there is work for it, scale it up or down as needed and the organization only pays for what is consumed. This is a huge advantage!

If old processes for provisioning server resources are carried forward to cloud resources, the organization will not experience the new benefits of the cloud resources. Conversely, if new processes and policies are not put into place the organization is likely to experience unpredictable operational costs due to the elastic nature of cloud pricing.

To achieve the full benefits of cloud technology might mean changing the policies to allow development teams to provision resources as they need them with limited oversight, but also provide budgetary boundaries and make them responsible for the costs they are incurring.

In summary, if you would like to reap order of magnitude rewards by moving your organization to the cloud, you must first address the four questions for adopting new technology. Otherwise, you are just using someone else's servers.

Resources:

• The Power of Technology (pdf)
• Beyond The Goal: Theory of Constraints
• The Four Questions