Technology is often worth it. - A case for Biometrics

During my various assignments I observe a worrying theme;
Successful people become rigid and adopt the same style and approach irrespective of the changing environment. Success makes them highly inflexible.

When changes occur in the business environment they are unable to change their style and approach They begin to believe that all they have to do is work harder, however this does not always produce satisfactory results.

Result oriented leaders do their homework and often try to change their approach until they get it right. Adopting suitable technology can often make the crucial difference. The best results normally come when there is a blend of technology coupled with good management practices.

Take the case of The Municipal Corporation of Delhi (MCD). The commissioners suspected inflation of the payroll by the addition of large number of fictitious employees. This was confirmed by published reports from The anti-corruption branch (ACB) of Delhi government which has investigated many such cases. To cite a few examples;
*In 2003, senior MCD officials were arrested for misappropriation of over Rs 14 lakh (US$ 30,000) released as salaries for 674 labourers. Another case involved Rs 18 lakhs (US$40,000) which was siphoned off supposedly for 861 fake employees.
*In 2004 Rs 32 lakh (US$65,000)was released for salaries of 1,826 ghost employees.

Efforts to verify and police the system bore little fruit because many auditors and investigators were intimidated or themselves part of the scam.

The Corporation kept on throwing more and more money to control abuse and cheating by recruiting more and more vigilance staff who only added to the corruption and of course the wage bill. This system saddled MCD with a annual employee bill of Rs 207 crore ( US$ 45 Million)

In an effort to streamline costs and provide verification of attendance biometric attendance recorders were installed. A Biometric attendance system was installed wherein a staffer has to place a finger or a card on the 'reader' to register presence. It was introduced in MCD headquarters in Aug 2008.

The technology was designed to address the three crucial factors of quality, costs and time. Quality by verification of attendance and computing the wage bill. Costs by eliminating fraud,making the transaction almost paperless and directly crediting the employees bank account.

Time of transaction and verification was on line and instantaneously.

The biometric attendance system revealed that out of a total of 130,000 registered employees a mind numbing 22,853 were bogus. These ghosts were drawing monthly salaries of Rs 17 crore (US$ 3.7 Million). It is expected that the scheme once extended to other MCD locations beyond the headquarters it is expected to throw up another 20,000 fake employees.

The savings accrued on a Rs 22 Crore( US$ 4.8 Million) is Rs 17 Cr (US$ 3.7 Million) each month or Rs 204 Crore (US$ annually. A fantastic return on investment in technology and a few good consultants.

Yet many people shy away from technology. There are a number of possible reasons for their reluctance to adopt technology;

• Knowledge is with younger people but resources are with older people. The older people in the majority have little or no understanding of the relevant technology.


• Intimidated by technology.


• Use conventional accounting techniques to evaluate strategic gains from technology.


• Being penny wise and pound foolish.


• Staff and technologists unable to convince their bosses.


• Apathy.


• Corruption thrives in inefficient systems and therefore sabotage all attempts at initiating change.

It is useful to remember that most of new technological solutions deliver only 40% of promises, and often fail to take off as scheduled and on an average take twice as long as predicted to become operationally effective. This is often not the fault or the weakness of the technology itself but include improper technology selection, lack of in depth understanding of the technology selected, integrating it with operations and not deploying technologies correctly.

Before you go out and start throwing money at technological solutions here are some elements you need to take care of;

1. Please do your homework and employ a good independent consultant to assist you


2. Beware of witch doctors who promise you the moon.


3. Avoid non scalable solutions and if possible proprietary solutions which lock you to a particular vendor or technology.


4. Invest in training your staff to manage and take maximum advantage of the new technology


5. Have a good service level agreement in place.

However the above example demonstrates that well conceived and implemented technological solutions are very well worth it.