Wednesday, August 24, 2011

For whose benefit?

I keep seeing systems where "automation" is applied to benefit the wrong people - and where that automation actually leads to a much worse state of affairs. John Seddon of  Vanguard would have a field day with some of the horrors that we see. I suspect tha tRichard Veryard might too - applying the POSIWID (the Purpose Of a System Is What It Does) principle to some of the horror shows.

Let's take a couple of old chestnuts. HR systems. HR systems are generally designed for the HR department and not for the majority of poor suckers who have to use it - the employees. Somehow to be an employee, I have to be an expert in labor law, an expert in health plans, and expert in company labor policy, a mind reader - when do I have time to work?

Then expense claim systems. 2 (major) constituencies here. The people who need to be reimbursed for expenses they have incurred and the accounting (usually accounts payable) department, rolling up to management. Every expense system that I have ever used (except that of MomentumSI) seemed to favor the accounting over the employee. For sure there are corrupt employees, so lots of processes have to be put in place. Fiddling expenses = fraud = dismissal for cause in my book. So again taking a POSIWID view is the purpose (really) to get the employees their money back quickly or to manage the accounting? Actually there is a third possibility - make it so hard that employees would rather not claim than endure the pain.

And the last piece of idiocy comes from professor evaluations. It used to be the case that towards the end of the semester, the students were asked by the professor to fill in a paper form evaluating the professor against some predefined criteria. The professor would leave the room while this was going on. It took about 10 minutes, the forms were placed into an envelope, sealed and handed in. The data were entered somewhere and the scores tabulated and handed to the professor some time later - often at the beginning of the next semester. It worked pretty well. Most students filled the forms in and good data were obtained. Enter the internet, direct entry, etc. Now the students are pointed to a website whee they can fill in the scores. Of course there aren't computers in the classroom, so the students have to do it out of hours and it conflicts with the many other tings they have to do. And of course they have to remember. So now we have a much lower participation, a tendency to towards the extremes. Only people with strong views at the positove and negative ends tend to fill these in. It is so bad that some classes are bribed with extra "points" to fill them in (and what does that say about ethics and education), the data aren't as valuable as they used to be, and aren't even ready as soon as they were under the old system? Why you might ask? I can't come up with a great answer to this - except maybe it seemed like a good idea at the time.
Moral of the story - just because you can "automate" a process doesn't mean you should.

Wednesday, August 10, 2011

OK - So its not technology, but it is in some senses a system

I have been puzzled by the way that corporate travel works. It seems to be a classic case of sub-optimization and I have never had a convincing story from corporate travel managers. I'll use some examples from my past to illustrate.
First comes from when I ran a consulting business. I figured that since my employees would often have to travel to the customer sites, I would quote rates to the customer that were inclusive of travel and then manage the travel down. I'd make some assumptions and then quote an all-in daily rate. Of course our rates looked higher than some of the competitions' rates, but the TCO was better. And then as a bonus to my employees, I would reward them at the end of the year with some percentage of the "saved" travel costs - assuming that they would normally have to pay $0.50 per mile on a trip for the airfare portion. Some of the more creative consultants were getting $0.20 or less, so there was lots to share.  I typically bumped the hourly rate factoring in about $0.35 per mile. So all were happy. Except they weren't! This was very difficult for the bean counters at some of our customers. They needed to see expenses accounted for differently.
Fast forward a few years. I was walking with a large travel agency on some modernization projects. This involved some of us commuting to the customer site, and staying the week.  Of course, since the customer was a travel agency, we had to use them for booking. Round trip airfare + 4 nights in hotel = $1300. We could book on Travelocity (and did a couple of times) getting the same flights, same hotel, same durations for about $700. We offered that to the customer - no deal. And then they had the gall to not renew the contract because "our expenses were out of control".
Fast forward to now. Texas education is in a budget crunch. There are important conferences that people need to go to - especially the people in Industry Studies kinds of programs. People have travel budgets to do these. How these budgets are calculated, I have no idea. What I do know is that accommodation and transportation have to be itemized. That's the policy, there's a travel department that does this. So, again, it is impossible to use the low cost mechanisms (like Travelocity) to book trips. Travelocity bundles airfare and hotels into a package, and is often a whole lot cheaper than booking the parts separately.
In corporations that I have worked for, it has almost never been acceptable to book the cheapest options - even when that is more convenient as well as cheaper. As a traveler would I prefer a package allowing a cheap non-stop flight or paying more and having to change planes in order to apply with (misguided) travel policy.
So given that there has to be some benefit to the current expensive, nonsensical approaches we have to ask where the benefits accrue. There are several candidates:
  • Corporate travel can look like heroes because they have negotiated special airfares with preferred carriers. Except of course that's a false economy.
  • Corporate travel gets all sorts of perks and inducements for the deals it does. Hmm, that doesn't look too helpful either.
  • Travel policy can more easily be enforced up front. Well, that;s probably true, but employees who make unauthorized trips should not have the cost of those trips reimbursed.
  • Fraudulent refunds - using an employee's own credit card, getting the trip changed, refund comes to employee and the employee makes some extra. That's really bad news and the employee should be fired for fraud.
  • Being able to track travel independently of the travelers' own reporting. yes that might make a difference.
  • No business class/first class generally available on packages booked on Travelocity. Well maybe there's a cheaper way around that.
The bottom line for me is that I don't see how corporate travel agents can really be justified - unless they facilitate the booking of all inclusive bundled packages. That surely has to be the way to save $$$$$