How Your Business Can Be More Strategic About Its Technology Spending


Too many executives today feel they are lagging behind on digital investments, including cloud computing, AI, and other technologies that competitors and tech vendors flaunt, while still using a significant portion of their discretionary investment to keep existing technology up to date. Despite significant investments, relatively few of these technologies are pushing companies towards a differentiating result that really matters to customers. So how do you shape your technology program so that it allows you to develop the right capabilities and produce results that fuel your competitive advantage? Here are six imperatives to consider. Working in depth on these six areas before embarking on a large tech project will help you focus your investment on the results that matter most, increase ROI, and connect technology directly to the center of your differentiated future.

If your organization does not make significant technological investments, you are in the minority. In fact, almost half of the CEOs of 24th Annual PwC CEO Survey (2021) reported plans to increase their digital investment rate by 10% or more – more than any other category of expenditure.

With all of these investments, it is alarming that most of the executives we speak to are concerned about their difficulty in differentiating themselves in any meaningful way from their competition. Unfortunately, a large portion of their current technology investments are made in an effort to “keep up” with the increasing demands of tabletop issues in the digital age. Indeed, while 56% of executives PwC Cloud Survey in the United States see the cloud as a strategic platform for growth and innovation, 53% of companies are not getting substantial value from their investments.

To turn the tide, you have to change your mindset. CEOs need to question every major technology investment by asking themselves, “What if we were to achieve double the value in half the time?” This question has the power to change your dialogue about these massive investments and may prevent you from falling into the trap of typical large-scale platform implementation programs that last for several years, cost huge amounts of money. , require massive effort to get employees to embrace new ways of working – and ultimately doesn’t help you differentiate yourself and win.

The key to realizing twice the value in half the time is not to focus primarily on technology, but to focus obsessively on the results that technology is supposed to deliver. It might sound like semantics and you might think, “Of course we’re interested in the outcome, not the technology per se. But are these outcomes defined in support of a very clear promise of value to the market? And will they create massive incremental value and differentiate your business? More often than not, the answer is no.

So how do you shape your technology program so that it allows you to develop the right capabilities and produce results that fuel your competitive advantage? Consider, for example, how Spanish multinational clothing company Inditex is using technology to create unique results and differentiate themselves in a hyper-competitive market.

Inditex’s Zara is known for its ‘on-demand’ business model, ensuring stores have the right amount of the right inventory that will sell at the right time. Like its competitors, Inditex had invested in an enterprise supply chain management system and was faced with investing even more in new technology to stay ahead. However, to fully respond to the results of a “on-demand” model, Inditex deployed a new approach to old technology: incorporating a cheaper, recyclable RFID chip into the tag of every item sold by Zara. This tag allows individual tracking of garments from logistics platforms to their final sale, allowing a much smarter system.

But Inditex isn’t just about technology. The information from RFID is supplemented by information provided by store managers on why certain items were not performing well on certain days, as well as by salespeople who have been trained to interact with customers and provide feedback on this. that they taught designers. This combined technological and non-technological intelligence enables Inditex to work in a highly integrated manner in marketing, design, merchandising, supply chain and retail operations to discover fashion trends, create new waves. of collections and provide customers with their desired clothes much faster than the competition.

Based on this learning from Inditex and other companies, here are six imperatives to consider in order to achieve differentiated results from your own technology investments:

1) Connect technology to clear and differentiated customer results

Ask yourself: what is the unique value that our company creates for customers and stakeholders? What are the few things we need to be good at to deliver this value? How can technology help us to excel in these differentiating capacities? Can we clearly articulate and measure how technology will help us differentiate ourselves from our competition? Having clear answers to these questions will help you prioritize outcomes and technologies that advance your unique value proposition over the gradual digitization of the way you work today.

2) Balance your investments between big tech, small tech and no tech

Not all problems need a big technological solution. Often, the solution requires complementing large technology platforms with automation and simpler “small tech” processes, new policies and behavior changes. It doesn’t just mean launching a host of small tech pilots and delaying fundamental investments that may be needed for long-term value. The key is to have a portfolio of solutions that deliver results faster where possible, and that fund and support investments that require greater transformation.

3) Be very picky about where to innovate versus integration

Creating amazing results for customers doesn’t always mean you have to do everything in-house or have your own unique customer solution. Opportunities for innovation through ecosystems are developing rapidly as companies bring new technological capabilities to market every day. Don’t be afraid to integrate technologies offered by others, especially your ecosystem partners. Personalize and innovate only where it leads to true competitive differentiation – and where that differentiation is something your customers are willing to pay for. If you can’t honestly answer whether customers will be willing to pay for the investments you make in personalization, don’t.

4) Align your operating model to achieve the desired outcome

Getting the desired result will require much more than just implementing the system. This will require changes in roles, processes, policies, working methods, skills, metrics, incentives, behaviors, data, etc. You will most likely find that without a multidisciplinary team that shapes the intended results of your technology investments, you will not be able to capture the full value. We call these “results-driven teams” because they bring together the right skills and talents from anywhere in the organization and focus on clear deliverables that generate value for the customer. Increasingly, they need to be permanent, and not just part-time workers working together for the duration of the project. This is a significant re-wiring of your operating model to break down the traditional silos that often stand in the way of achieving differentiating results.

5) change the relationship between technology and your employees

Hiring and perfecting the people who will use the new technology will be one of your most difficult and time-consuming jobs, but absolutely essential. Don’t just focus on making people comfortable with the use of technology (for example, teaching them how to effectively use remote working tools); motivate them to work in this new way (for example, being comfortable managing and motivating their teams remotely). Work with people to change their daily activities through technology and in doing so they will become familiar with the underlying systems. Show them what there is for them to gain – how it will enrich their work and connect them to the purpose of the organization.

6) Rethink the business case behind technology investments

Business cases typically focus almost entirely on improving efficiency – for example, staff savings through completing tasks faster or with less human intervention, or reductions in the cost of operation. technology itself. Be more ambitious. How will investing change the success of customer acquisition or retention? How will this improve your knowledge and help you better deliver your value proposition? What impact will this have on your carbon footprint? If your business case doesn’t address results, the project itself is probably not transformational enough.

As you expand the articulation of benefits, you’ll also need to hold your teams accountable for delivering that value. Success should no longer be measured by getting the system up and running, but by driving a change in your bottom line with customers. Defining clear, fact-based metrics isn’t easy, but without them you’re just keeping your fingers crossed and hoping the transformation comes behind massive tech bets.

Working in depth on these six areas before embarking on a large tech project will help you focus your investment on the results that matter most, increase ROI, and connect technology directly to the center of your differentiated future.


Norma A. Roth