How to make smarter technology investments in today’s market

As we emerge from a chapter where business was as far from usual as it gets, organizations large and small are transforming themselves and turning to technology not only to remain competitive in existing markets, but also to drive innovation and create new opportunities. Managing working capital is more critical than ever though, so knowing how, when and what technology to invest in is crucial.

Lead with people and process

When you begin contemplating a digital strategy, it’s important not to get caught up in chasing “shiny new objects” of technology. “Digital transformation is about people and process change, not just about technology,” says David Reilly, Global Banking & Markets Technology and Enterprise Risk and Finance Technology Executive, Bank of America. “Technology should follow what you need to do to better serve your clients and your communities.”

At the heart of building a sustainable and effective digital program is cultural change. Unless your organization embraces it, even the most transformational technology solution won’t deliver long-term value. To that end, the adoption of a new digital strategy needs to be driven by a cross-section of your team members, along with input from your technology partners — be they external consultants or internal resources. For example, you might want to have your more tech-savvy employees become “digital innovation ambassadors” to work closely with the front office or product managers. These ambassadors can help with digital adoption, breaking down silos and further integrating any new technology solutions throughout your business. Having everyone working from the same digital playbook will also make it easier for the entire organization to speak the same language when it comes to technology and workflow. This is especially beneficial in attracting talent that is motivated to work with technology-minded employers rather than with companies that are resistant to change and innovation.

In addition to letting technology follow people and process, it helps to build your digital strategy in a way that supports your company’s long-term business growth objectives. Reilly suggests that you ask, “Is this technology serving my clients and helping them grow?” If you can’t answer yes, then it may be an example of a shiny new object.

Above all, remain flexible

It’s also important that your business doesn’t become totally dependent on or captive to any single technology or digital solution. Bruno Guicardi, CEO of technology consulting firm CI&T, encourages business leaders to set a vision for where new tech can take them, but to leave options open and be ready to adjust the vision accordingly. “Establish your objectives. Say this is the direction you want to go, but stay very flexible.”

One of the reasons that flexibility is so important is that the marketplace and customer expectations change constantly. Even under the best of circumstances, it’s almost impossible to predict the future. But the recent year has also shown that we can’t write off the potential for unexpected events that could disrupt or upend our businesses. 

So rather than locking in on a digital strategy and focusing on large, long-term technology investments, Guicardi recommends that you make smaller investments and assess their effectiveness on a continual basis. “Try thinking like a venture capitalist yourself. Don’t give series B money at the outset. Give seed money and then make series A, B and C investments as ideas show traction.” By creating a more balanced portfolio of technology investments — with 80% you deem safer and 20% with a higher risk/return, for example — businesses can mitigate the risk of losing pace with customer expectations, but still explore new possibilities.

Don’t forget the lessons along the way

Navigating the shifting technology landscape can be dizzying, and in times of uncertainty, determining where and when to invest your technology dollars is even harder. But taking a measured approach can help improve the likelihood that your investment in technology today will reap benefits in the years to come.

To increase your organization’s chances for success, continual stakeholder feedback is also a necessary ingredient. Julie Harris, head of Global Banking Digital Strategy at Bank of America, stresses the importance of understanding how your digital program impacts competitiveness, quality, margins, efficiency and your employees. “Consider conducting internal satisfaction surveys, and asking, ‘Are our processes well organized?’ You’ll want to be sure you’re being more efficient, effective and better serving your clients and customers.”

Last but not least, think about assessing your digital return on investment (ROI) by making sure your program is either driving revenue and market share or driving a reduction in the operating expense of the company. As Reilly puts it, “ROI really encompasses two things: the financial return, but also the better customer experience that you can deliver.”