On the Theory of Constraints and IT

Dr. Eliyahu Goldratt wrote about the theory of constraints in this book "The Goal".

The original process was designed and implemented and everybody understood it when it started. In the normal operation of a business, some activities become more efficient than others over time. People learn how to do them more effectively.

When these activities become more efficient, a constraint is normally created in other activities that have not been improved. This activity becomes a constraint and inventory piles up in front of the constraint. We normally think of this in a manufacturing line, but the same things is true in a service process.

When things pile up in front of a constraint, the process breaks down and prioritization and escalation starts to happen. Effort gets redicrected from other activities to the area of constraint. While this gets the work out the door, it also impacts normal workload and problems and backlogs occur in other areas as a result.

This is the general concept of the theory of constraints. What does this have to do with Information Technology?

Information Technology can improve productivity and performance of an organization. It is often a much more efficient way of running than a manual operation. There are two issues encountered that relate directly to the theory of constraints and these are the key reasons for failure of many software projects.

1. When new software is installed in a business, management often assumes that the process still operates as it was installed a few years ago. This is seldom the case. Since productivity of some activities has improved, the process operates in a different way and has new constraints. Often the improved productivity provided by the new software operates on the already improved activities, not on the constraints, creating bigger problems for the constraints.
2. Computer software comes with an assumed process built in. Most software is not very tolerant of exceptions and major problems are encountered when ongoing exceptions are found. This takes more effort to manage the exceptions, when the exceptions are already a burden. The number of exceptions and reprioritizations increases, creating a bigger bottleneck in the business.

Your goal is to get work out the door, satisfy your client's needs and get paid as quickly as possible. The "improved productivity" provided by the new software becomes a new bottleneck, reducing productivity and increasing frustration. All of this costs you time and money.

The problem started with buying new software to upgrade your business performance. See my article on "The Importance of Business Process" to find a starting point.