The art of justifying new technology to top management

Empirical research on the selection and implementation of new technology suggests that the use of traditional cost accounting methods to justify technology are outdated. This is evident in the situation where top managers require detailed cost-benefit information to demonstrate the short-term returns from new technology. The root of the problem lies in the formal budgetary control system whereby top managers require 'proof' based on simple cost-accounting methods that expenditure on new technology is worthwhile. This leads many engineering managers to admit to providing 'spurious' accounting information to support their proposal documents for new technology which suggests that decision-making on technology is a fragmented process where responsibilities rest with different levels of management. It appears that communication difficulties arise because those with the necessary technical expertise are not given access to company resources without satisfying the stringent controls imposed by accountants. This was highlighted by many engineers who claimed that whilst their technical expertise was 'crucial' in the introduction of new technology, this alone was insufficient to allow them entry into managerial hierarchies. It is suggested that companies where senior engineering managers were given greater powers in the disposal of company resources for new technology experienced fewer post-implementation problems unlike those companies where progress in technological change was inhibited by the short-term and traditional budgetary control system.