The “redistribution of wealth” has been a major focus in South Africa in recent decades.
There is an unstated assumption that wealth creates itself and is unjustly appropriated by certain individuals at the expense of those who justly deserve to participate in that wealth.
Is that a valid thesis?
For more than twenty years I have been seeking to bring “the disciplines of engineering” (consistent and reliably successful outcomes) to the information technology industry – a journey which has been underpinned by a deeply held belief that engineering provides thought patterns and knowledge that are supportive of successful outcomes by preventing failure and that my training would permit me to indeed establish the requirements for successful IT outcomes.
During the ensuing challenging and at times traumatic journey I have sought among other things to understand the concept of value, the relationship between value and cash and therefore the concept of wealth. I have done this as a participant and observer in life and the events of the decades during which I have been able to engage with the world around me. I hold that if one does not understand how value is created it is impossible to embark on any type of engineering, information technology or other project with any prospect of REAL success, where by REAL success I mean an enduring, sustainable outcome that produces a net GAIN in the quality of life of those it touches.
While this analysis initially was focused only on information technology and the reasons for the 70% outright investment failure rate for IT and why 19 out of 20 ERP (business computer systems) fail to meet management expectations, I more recently came to realize that these same findings had a bearing on South Africa in the twenty first century.
This article sets out to summarize some key findings based on an assertion that “wealth” is the concept that best summarizes the state of being of human beings that we are all at least nominally striving for. Wealth in terms of this definition comprises state of health (physical and mental wellbeing), security, quality of food, accommodation, finances, etc. If to this we add the concept of “abundance” it is apparent that few people in our society know how to create enduring wealth in their own lives, let alone the lives of a substantial number of people. I suggest for your consideration that the truly wealthy create meaningful employment well above the poverty line for substantial numbers of people.
Wealth is therefore the result of focused and effective human endeavour, enterprise and effort conceptualized and executed by human beings. Assets, whether buildings, farms or cash are NOT wealth and do NOT create wealth, ONLY human beings create wealth. Taking from those who at some level have succeeded in creating some measure of tangible wealth and giving to those who manifestly do NOT know how to create wealth (if they did they would not need the handouts), diminishes the resources available to those who know how to manage wealth and thereby drains the pool of human motivation that creates enduring wealth. The only truly viable means of assisting those of impoverished circumstances is to create opportunities for them to fall under the mantle of those who do know how to create wealth that they may in time benefit… but this is not the essence of my message.
What are the essential components of creating wealth?
Based on my analysis, I suggest for your consideration and as a basis for discussion that the following eight factors are pivotal in creating wealth.
Percentages after each point indicate the estimated relative contribution of each factor in creating wealth. The impact that the absence of these factors has on destroying wealth is also shown as a percentage in brackets.
Assets do NOT create wealth, people do.
One of the most destructive myths in South Africa today is that assets are wealth.
Farm are reallocated and fall to rack and ruin because the farm was NOT wealth, the gainful operation of the farm may have created sustenance and some semblance of wealth but the land and the plants and the animals were NEVER the source of that wealth, the effective management by people created wealth.
Football stadiums do NOT create wealth, they are a huge drain on the active capital of the nation and, when funded with loans represent an enduring burden on the ability of the nation to support those who need some measure of support.
Reallocating the money that should be used to maintain infrastructure (roads, sewerage, water supply, electricity reticulation), is NOT wealth redistribution, it is theft from the wealth of the future to create an illusion of wealth in the present that will finally devastate the future if not rapidly turned around.
On the other hand, the effective application of technology to gear the human and natural resources of a nation or organization is vital. Every nation that has succeeded in truly raising living standards to high levels and minimizing or eliminating poverty has done so through the effective application of appropriate, well maintained and well operated technology to gear the abilities of its people. However, the technology is NOT the source of the wealth, the people who conceptualize, design, build and operate the technology are the source of the wealth.
On the other hand technology that has fallen into disrepair, including all those infrastructure components mentioned above will eventually become a massive sink draining prosperity out of the economy as is already starting to happen through the tyre and shock absorber tax (potholes and raveling road surfaces) and other insidious consumers of effectiveness, efficiency and cash that are progressively subtly dragging South Africa into deeper and deeper future discounted poverty.
Thus assets are vital in creating wealth and in destroying wealth but other factors are more critical.
The way things are done, methods, policies, standards, etc contribute to wealth creation but are also NOT wealth, the ability to do these things assist human beings to generate activities that are exchangeable for cash or near cash which improve the quality of life but they are not in and of themselves wealth.
As with appropriate assets these factors are a necessary qualifier for a wealthy existence, in their absence the creation of wealth in real terms is all but impossible BUT there are other factors which have a more fundamental impact.
Of the items listed here policies have the greatest ability to destroy wealth but they do NOT create wealth, effective policies create a suitable context and may stimulate wealth producing activities but inappropriate policies can destroy wealth creating endeavour.
It is a myth that governments create wealth and the attempts by our present Government to present itself as the guarantor of wealth and well being is at best futile and at worst laying the seeds for civil war borne out of increasing poverty and disillusionment.
In the current generation we seem to have lost sight of the importance of discipline, accountability, etc.
We abolish the death penalty and when murder rates rise to a level where we cannot possibly accommodate all the murderers in jail with required standards of compassionate care our politicians fail to own their mistakes or take responsibility for the crime rate in a way that makes any impression. After more than a decade of doing roughly the same things it is time to do something different.
Public calls to “kill the farmer (boer)” and “bring me my machine gun” plant mental seeds that can ONLY add fuel to the fire and at the same time drive more and more of the people who do have even some limited knowledge of how to create wealth from the country. Every well educated and economically active person who leaves the country sheds geared suffering, deprivation and continued lack to the poorest of the poor and even the not so poor. The multiplier effect of one lecturer, teacher, doctor, engineer, etc leaving the country robs the people of this nation of significant potential to create wealth.
Return to the death penalty for murder, robust and appropriate punishment for robbery, rape, etc are vital building blocks in any attempt to bring wealth and that requires that those in positions of leadership in Government set an appropriate standard.
Well motivated people can produce far more than demotivated people. The public utterances mentioned above are sapping the morale of the people of this nation. Leaving the country is a constant topic, the fall into decay and disrepair of the infrastructure are all sapping the will of people to invest time and money in building the future. It is not readily apparent but the seeds of accelerating decay are widely present for those with eyes to see.
However, once decay has set in and is manifesting in rotting infrastructure a change in morale will have little effect on real economic upliftment, it is difficult to create wealth when more and more of your energy is being consumed as a consequence of the failure of Government to concentrate on its core responsibilities including reliable future focused infrastructure.
When a major mining house that has been central to the creation of wealth in this country for over a century is rumoured to be divesting of its mining assets because it is negative about the future of the country it is time to take note!
Relationships, trust, the effective interaction of human beings with one another is a fundamental requirement for wealth creation and a viable nation. Increasing ant-white racism and harsh discrimination and the resultant backlash are tearing at the very fabric of the rainbow nation and are everywhere apparent for those not too afraid of being thought politically incorrect to notice.
Effective relationships and partnerships between people are a vital element of creating wealth. Once destroyed it will take a long time to rebuild and the ability of such rebuilding to influence seriously decayed infrastructure rapidly will be limited.
People who are truly wealthy know how to manage time, finances and other resources and, above all, to manage people.
Only a small number of people truly know how to do this with real effect such that productive and profitable employment is created for many others. Driving those people out or causing them to turn their endeavours to other shores is one of the most damaging things that is currently happening in this country.
Putting people in charge who do not know how to do these things is a recipe for disaster and has been government policy for the last sixteen years with the resultant degradation of infrastructure, etc that has been referred to throughout this article.
People who create substantial wealth do so through taking high value decisions. Two people can sit in the same meeting and take totally different decisions. One decision can initiate actions that create wealth, another decision can sabotage or destroy wealth creation.
Few people know how to take high value decisions consistently. Such people must be nurtured and not branded because of the colour of their skin and made to feel unwelcome and unwanted in the land of their birth or their adoptive land.
South Africa is divesting itself of high value decision makers and that, alone, is enough to tip us over the edge of technological and economic ruin that characterizes much of Africa.
In all of the above, relevant knowledge and experience effectively and efficiently employed are at the heart of wealth creation.
Such wealth cannot be redistributed, or confiscated, or nationalized. It is the consequence of a lifetime of learning or not learning, of growing or not growing in wisdom or foolishness.
But there is increasing evidence that the impacts of the first seven years of life are huge, that many who succeed succeed because of what they took on board in those first years and that most who fail fail as a consequence of what they took on board during that same period.
An official who grew up in an area of rutted tracks will consider himself to be performing well when there are only “a few” potholes whereas an official who grew up in an environment where potholes were unheard of will consider the situation to be downright dangerous and unacceptable.
In my next article I will elaborate on the importance of early childhood knowledge and experience acquisition in shaping the future of a human being and suggest that this, rather than genetics, is a pivotal factor in determining the ability of a human being to generate wealth. Suggestions will be made for measures that could be taken to greatly improve the ability of the next generation of South Africans and possibly even the current generation, to create sustainable wealth.
The bottom line is that there are huge problems in this country BUT that there ARE measures that can and should be taken.
I raise the problems because as an engineer I know that success comes from preventing failure and in order to prevent failure I must first acknowledge that failure is an inevitable consequence of failing to prevent every single possible cause of failure from activating in the structure or system that I am responsible for designing.
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Business Systems NOT delivering?
Call the Business Systems Specialist
Dr James A Robertson -- has been involved in the effective application of Business Information Systems, including but NOT limited to ERP, since 1987 and in the profitable and effective use of computers in Business since 1981.
Drawing on a diversity of experience, including formal military training in Quick Attack techniques at the Regimental Commander level, Dr Robertson has developed highly effective methods of investigating any sub-optimal Business Information Systems situation -- be it an established system or a stalled project or any other source of Executive frustration -- quickly and concisely diagnosing the root cause of the problem and prescribing concise practical actions that Business Executives can effectively act on see the Pulse Measurement page and also the Sample Reports page for redacted real reports.
He has also developed highly effective methods of strategically enriching systems to unlock the full potential of existing investments, see the Precision Configuration page and couples this to architecting small pieces of clever software that harness the full potential of your investment, see the Software page.
If you are having problems with your systems, your project or your IT Department, call The Business Systems Specialist
Business System Failure is RIFE -- we offer insight into why this happens AND WHAT is required to prevent it.
Failure is at epidemic levels with massive damage done to client companies -- if you are NOT aware of the extent of the problem please visit the About Failure page for a catalog of major failures running to billions of Pounds and Dollars.
All evidence indicates that the established players do NOT know how to deliver stable, reliable high value solutions that WORK.
There HAS to be a better way!
This website provides information relating to that way with a large collection of white papers, presentations, standards documents, etc that you can use to start bringing the situation under control
We also offer high level advisory services with regard to the application of the principles advocated on this website
We offer an ENGINEERING APPROACH to addressing these issues
By Engineering I mean the formal, structured, highly disciplined, highly systematic, highly practical approach that consistently delivers results in ALL areas of human endeavor where formally trained and certified engineers are the ONLY practitioners permitted to operate -- think large buildings, factories, motor vehicles, aircraft -- highly complex systems that work at a level that we take it for granted that they WILL work and where failure is all but unthinkable and, when it happens, attracts immediate public attention and rigorous investigation directed at ensuring that such failures are prevented in the future -- in fact, everything that the management consulting industry that implements complex software systems is NOT
This approach is discussed further on the Engineering Approach page.
In 2003 I undertook an in-depth analysis of all the information and experience that I had gathered with regard to the factors giving rise to Business Information System failure including ERP and general IT and classified this information into a number of categories including "The Factors Causing Failure" and "The Critical Factors for Success" based on this I developed a two day Course "The Critical Factors for Information Technology Investment Success" which is still offered today.
Based on this I wrote the book of the same name, which is available in electronic form here for download:
James has a very detailed profile on LinkedIn should you require further information about him.
You can also connect with him on LinkedIn at http://www.linkedin.com/in/DrJamesARobertsonERPDoctor
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There is a large body of white papers, articles and other content produced by Dr James Robertson available on this website
Please click here to visit the detailed listing of articles
About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics
Catalogue of Major Business Information System Failures
About the Engineering Approach
James Robertson's Value Add
Attributes of a HIGH VALUE solution
Recognizing Business System Failure
The Critical Human Foundation
Old Software IS Viable
From South Africa
Competencies of Dr James A Robertson PrEng
About Professor Malcolm McDonald
Table of Contents
About my relationship with the Almighty Creator, Yah the Eternally Self-Existing
Comments relating to the Business Systems Industry and other topics
Testimonials and other positive material regarding James Robertson
List of Articles
Achieving High Value Business Information System outcomes
Executive Custody -- What is it and HOW do you get it?
The REAL Issues in Integrated Business Information System Success
Part 1: Introduction
Part 2 -- Mythology and Lack of Executive Custody
Part 3 – Strategic Alignment and Precision Configuration
Why your ERP is NOT delivering and HOW to FIX it
IT Project Management
CEO Anthony Lee Comments on his experience of the Pulse Measurement
No Charge Guarantee on the Pulse Measurement Service
Examples of Pulse Measurement Outcomes
Critical questions regarding the Pulse Measurement™
The Pulse Measurement Workflow
The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement
Indicative Pulse Measurement Durations
What is a JAR&A Pulse Measurement?
Survival of the fittest – why it makes sense to measure the pulse of your business
Examples of Pulse Measurement Outcomes over 24 years
Sample Pulse Measurement Reports
Strategic Essence: The Missing Link in Business Information Systems
Strategic Essence: Overview
Strategic Essence: Part 1 -- Strategy Defined
Strategic Essence: Part 2 -- Differentiation
Strategic Essence: Part 3 -- The Essence IS Different
Strategic Essence: Part 4 -- The Essence should be the Point of Departure
Strategic Essence: Part 5 -- Discovering Strategic Essence
Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?
Simple Steps to Increase the Strategic Value of your ERP Investment
Free Strategic Snapshot Toolset and Manual
A strategy focused planning system beyond traditional budgeting
Tough IT and ERP Procurement and Contracting that Works
Robust Business Systems Procurement
Part 1 -- Introduction
Part 2 -- Bill of Services, Laboratory, Go-live Certificate, etc
Part 3 -- Executive Engagement, Bid Compliance, Adjudication and other matters
Guidance and Advisory Services
The Art of Project Leadership
Why Regular Communication with the CEO is Vital
The Business Simulation Laboratory
Precision Configuration and Strategic Business Information Architecture
Precision Configuration based on Strategic Engineered Precision Taxonomies
The JAR&A Cubic Business Model
Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal
The Product Catalogue -- an Essential Element of any Precision Configuration
Attributes -- answers to the questions you have NOT yet thought to ask
Case Studies of Notably Successful Projects with high value Precision Configuration
092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013
088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa
026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf
018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf
011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng
Strategically Enriching your Business Information Systems
Part 2 -- Principles of Data Engineering
Part 3 -- Steps in applying these recommendations
Simple Steps to increase the strategic information value yield from your Business Systems Investment
The Full JAR&A Taxonomy Manual
Part 1: Introduction, Problem Statement, Definitions and Examples
Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software
Part 3: How to do it, Case Studies and White Papers and other References
Example General Ledger Manual
Business Process -- Irrelevant, Distracting and Dangerous
The RIGHT Approach
Custom Strategic Software Design and Oversight of Construction
Standards for Custom Software Specification
What IS Software?
Critical Factors for I.T. Success
A Moral and Ethical Dilemma -- Systems that Fail
Case Studies examining Business Information System failures
The BBC Digital Media Initiative Debacle
The Bridgestone -- IBM Conflict
Speaking and Training
Showcase of Conference Presentations
Most Viewed Presentations
Briefings and Seminars
Why your ERP/BIS is NOT delivering and HOW to FIX it
ERP and IT Procurement that Delivers Results
The Critical Factors for IT and ERP Investment Success
Conferences and Public Presentations
Conferences 80 to 99 -- 2009 to Present
Conferences 60 to 79 -- 2005 to 2009
Conferences 40 to 59 -- 1996 to 2005
Conferences 20 to 39 -- 1994 to 1996
Conferences 01 to 19 -- 1989 to 1994
On-Line Seminars (Webinars)
Webinar on Preparing and Presenting Webinars
Contacting James A Robertson and Associates Limited