Investing in technology alone doesn't add value. All can lead to buyer's remorse if not tied to value creation.
A feature of technology markets is that they are highly disorganized. Measuring market and buyer dynamics is critical to properly positioning your brand. But it starts with how well you know your customers: their goals, preferences, patterns, and desires.
Street Deloitte's According to the Global Technology Leadership Study, technology spending as a percentage of revenue increased from 3.28% in 2016 to 5.49% in 2022. Technology budgets are increasing in nearly every industry and industry. But doubling down on technology investment won't improve business outcomes unless technology leaders back it up with clear goals and customer-centric strategies.
Spending
Brands around the world are increasing spending on transformation initiatives. Digital transformation efforts increased by 65% in two years (2020-2022). Technology now dominates strategy, but measuring ROI is a vexing problem for technology leaders. Furthermore, A gartner survey found that 60% of tech buyers involved in a renewal decision experience regret.
Decisions are not easy unless everything aligns with the customer's needs. There is power in intention. If business leaders don't break down the silos within their organizations, they'll be leaving money on the table. Before making any technology investment, you must first demonstrate how it will impact the end user/customer. If you can't clearly articulate the value of your technology investment, it's not worth the effort. If technology investments aren't helping companies enter new markets, build new capabilities, or lead innovation, technology leaders need to take a step back and recalibrate their investment efforts.
Technology success can only be achieved if the technology supports overall business objectives. And if you don't understand your customers well, you won't be successful.
convey value
Technology leaders, it's time to move away from the traditional approach of communicating your team's impact. Stop viewing these investments as cost centers and start focusing on value creation. If the technology costs $X, what value does the company get from it? How does it impact the bottom line? The demo requires a hard reset.
Ask stakeholders what results they expect from a particular investment. If you can't translate it into increased revenue or improved employee performance, you won't understand how technology is a strategic driver of business success.
The higher the budget, the higher the expectations of stakeholders. It’s all about demonstrating how well these transformation efforts align with your business strategy and plans.
Stock confirmation
There is a surprising disconnect between the adoption of new technology and the impact of that technology implementation. Technological success is not determined by how many new technologies you introduce, but by how much of the technology stack you leverage.
The key is to make each investment carefully. Change function, technology aligned to business strategy, and digital roadmaps all need to coexist and reinforce each other. Get up close to your technology – why is it important? Do you have the right resources? Does your team have the best skillset to use these technologies? Before you buy Are there any gaps that need to be filled?
Success in innovation is about assembling all the right components and figuring out how they best fit together. A combination of intention and execution – that's the only way to understand everything.