Cost-Benefit Analysis Stifles Innovation

There is quite a revelation in the Strategy+Business piece on cost-benefit analysis:

…the data is often framed to protect existing industries and technologies and discourage innovation…..

Their example of two industry reports presented to OSHA that estimated costs of noise abatement at $31.6B and $11.7B respectively reveals that the reason was that one study completely ignored new, working technology. That study also didn’t consider minor changes and upgrades to current equipment that could substantially reduce noise.

I find this to be true in my field of software technology. Often companies fail to investigate new technology that enables collaborative business processes that can substantially reduce time-to-market or through put in favor of traditional business processes.

There is a level of fear of the impact of change that leads to doing analyses with minimal change to, and technology enabling of, business processes. Our challenge, as a software vendor, is to get outside the “closed” thinking of certain managers and reach executives to discuss how strategies can be executed with the right technology-enabled business processes. A level of proof is required, first with a client reference, and then somehow “proving” that the result can occur in their environment.

How about you? Are you doing cost-benefit analysis without consideration of new technology? Why? Is it because you are not including others in your company, or outside your company, in the analysis? What sources have you not considered? Share your experiences!

Don’t miss a post. Subscribe via EMAIL or RSS.