5 Ways to Ensure Your Technology Investment Pays Off
A Guide for C-Suite Executives
Making the right technology investment often separates the best from the rest. However, investing in new technology can also pose a significant risk for your business in some situations; especially when the decision is made without all of the information that could impact its ability to deliver the desired results.
It’s not uncommon to find companies where non-IT C-suite executives are responsible for making these types of technology decisions creating a challenging situation for both their area of responsibility and the overall business. Reporting or measuring the impact of technology investments often falls outside their area of responsibility, leaving them at a disadvantage and introducing unnecessary risks when making new technology investment decisions.
Common risks that occur for executives who make these decisions can include investing in technology that doesn’t deliver innovation for your business, investing in the wrong technology for the desired results, or investing in technology that does the same thing as existing technology in use. Taking the following steps will help you make a smart investment decision and ensure your technology investment will pay off after implementation.
1. Evaluate Business Need Alignment and Impact
The first step to making sure your technology investment will pay off is to evaluate how well it meets your business needs. Ask yourself “how large of a business impact will it have?” If the answer is minimal from your perspective, it’s time to step back and reassess what the reason is for making this technology investment. Start by talking with everyone on your team that is involved in making the decision or implementing the technology. What is their view of its ability to make a positive business impact? Your goal is to articulate the business impact of the investment in both quantitative and qualitative ways.
You also want to ensure you have a good understanding of how the timing of the investment will affect its business impact. If you make this investment within the next 60 days, what is the impact compared to making it in six months, a year, two years, and so on? For example, if you need to modernize a large, high-value business system to integrate it with a third-party system that is responsible for 28% of your current total business revenue, making that investment quickly versus delaying it for even a year could have a significant impact on making sure your modernization investment pays off.
It may seem obvious to not invest in a technology that won’t deliver significant positive business impact, but it is easy to get caught up in getting the latest and greatest next thing, blinding you from the practical answer.
2. Look for Quality
There are key indicators of quality to look for in both providers and the technology itself when researching technology investments. Knowing these are present will help ensure that you make a smart investment that will pay off in the long run.
Indicators of provider quality in technology investments:
- Partnership style relationship versus a simple vendor relationship with the provider
- Formal delivery management processes and a dedicated point of contact
- Previous related industry experience
- Experience with your current technologies as well as the technologies you are looking to invest in
- Flexible and robust development methodology
Indicators of technology quality:
- The technology supports your innovation and agility goals
- Development and maintenance costs are acceptable
- Security and regulatory requirements are supported
- Performance expectations can be met
- Broad infrastructure support for the technology exists or is rapidly being developed
Technology investments have to pay off in both the short and long run because they are critical to achieving your strategic business goals, supporting innovation, and enabling agility. Providing a robust positive ROI is essential to your overall business health. To ensure a wise investment, you tie these quality factors in with its ability to align with your business needs and deliver a significant impact.
3. Involve the IT department in Decision-Making
Actively involving the IT department, from the C-level to product managers and lead developers, in your decision-making will improve the potential for your technology investment to deliver strong RIO substantially. The IT team is your go-to source for ensuring that everything is in place that is required to support it in terms of infrastructure, technical support, and other vital elements. IT can provide insights into its impact on different systems and business processes and can illuminate potential obstacles before, during, and after execution. Research shows that failing to include the IT department in this process early on is a common mistake made by businesses as they plan to make new technology investments.
4. Craft strategic technology plans
A necessity for enterprise businesses is the creation of strategic technology plans that detail how a specific technology can be applied within the organization to reach business goals and that provide an implementation roadmap for success. These plans should support high-level, long-term business goals. Investments should tie back to both the business goals and strategic technology plan. Ask your team if making the investment will cover the gaps you have in your business efficiently, or will it leave critical holes. This is one of the more essential aspects to look at in-depth since it will have the most profound effect on your business. The creation of these plans will bring technology and business leaders together, giving everyone a voice in their development and ensuring that there is a high level of transparency.
5. Evaluate short and long-term costs and risks
Cost considerations are always going to play a role in technology investments. This is another area where consulting with the IT department can provide key insights. They will likely be the best source of details on the costs associated with implementing a new technology effectively and provide insights into the associated technical risks (as long as they are in support of the investment).
You also need to evaluate what financial risks you will be taking by making this techno0logy investment. These types of investments and the application of new technologies in your business can have a significant impact on your revenue, expenses, business reputation, business processes, partnerships, vendors, and beyond. To ensure you achieve the ROI you desire, calculating the best and worst-case scenarios in both the short and long term is an essential step in your decision-making. While short-term costs may be high, long-term ROI may more than justify your decision.
There’s no doubt that the well-timed, thoughtful application of technology is critical to achieving a competitive advantage for virtually every business today. This is all the more true for enterprise-level companies. A smart technology investment not only supports innovation, but presents a multitude of other benefits such as opening up opportunities for new partnerships, streamlining business operations, improving customer and employee satisfaction, and lowering operating costs.
Are you ready to make your next smart tech investment? Start the conversation today and let’s discuss the future of your business!