Over the past decade, organizations all over the world have made sizeable investments in information technology. But many of them struggle to see how the value of that technology justifies its rising share of total expense. They need a technology strategy.
While adopting the latest software and programs are often pitched by tech companies as “the solution” to maximizing your bottom line, that doesn’t always hold true. However, today almost 80% of companies believe digital transformation is critical to business success. So what can we make of this?
The key to achieving the proper balance is to transform technology cost into a true technology investment. What’s the difference? “Cost” is simply an expense line on your P&L. “Investment” brings one key exception, a return.
The problem with most technology spending today is that businesses are not looking at technology as an investment, and that is a critical mistake. Technology decisions all too often begin with “how can we do it for less?” When it comes to tech, this is the wrong place to begin.
More than ever, technology can positively influence business success. We must adopt this mindset at the highest level, recognizing that the right technology can truly transform a business.
We must look at our investment in technology as important as the investment a manufacturer might make to have well-maintained machines on the production floor. Both the machine and the business technology, in different ways, have a heavy influence on the top-line, bottom-line, and overall health of the business.
Leading businesses are investing in technology and finding new success. So, when looking at technology, businesses can no longer start with the question of “how much can I save.” Instead of asking the question “how much value can I get.” Let’s change that mindset and keep you in the lead.
Why Choosing the Right Technology is More Important than Ever
In today’s world, people expect real-time results — whether it is communication, collaboration, or delivering a service. That is easier said than done.
The modern workplace has evolved, and most people are now working both remotely and in the office. This has also made managing your network security more complicated, especially considering the significant rise in cybercrime over the past couple of years.
Investing in the right technology has the potential to address these issues. Beyond the obvious productivity benefits and the ability to protect valuable assets, it allows people the freedom to work from anywhere without significantly affecting business.
But the technology you choose needs to map to your business goals and prove its value — financially and operationally.
You need a technology strategy.
What is a Technology Strategy?
A technology strategy is a roadmap that enables you to identify specific technology solutions that can help you achieve your business objectives.
By thinking and planning strategically, you can look at the whole investment and justify each project, relative to all other needs, BEFORE a decision is made. As a result, you make better decisions
Breaking it down simply, a strong technology strategy has two focus areas:
- Foundation investment – Your baseline investment to ensure your technology is reliable, available, and secure.
- Innovation investment – Your investment in moving the organization forward, improving your processes, and becoming more efficient
The purpose of a strong strategy must be to find the sweet spot between your foundation and innovation investment, matching the highest reliability, availability, and security with innovative solutions that make you a leader in your industry.
The key to reaching and maintaining this balance is to optimize your foundational technology, minimize costs and time spent in that area, so you can focus on the technology that will support business growth and provide a return on your overall investment.
The 5 Elements to an Effective (Innovation-Focused) Technology Strategy
An effective tech strategy should consider the needs of your entire organization and ensure every solution is aligned with your business goals.
There are 5 main elements to an effective technology strategy:
1. Understand Your Business Priorities
Start by looking back at your business and asking yourself what your biggest challenges and bottlenecks are. We highly recommend performing a business SWOT analysis, which will help flush out key areas of improvement, opportunity, or risk. This process will not only help you see the areas you need to improve in general but also where technology might be a driver of improvement.
Look at your best customers and figure out why they love your organization. What should you continue doing to improve customer satisfaction?
Finally, study what other companies within your industry are doing and figure out what you could do better.
2. Prioritize Your Objectives
Once you have a list of business goals, it is time to prioritize them. Which ones are the most valuable, feasible, and achievable?
3. Identify & Align
With your objectives in place, you need to identify the right solutions to support them.
Explore the capabilities and technologies that could help you address any issues, improve business processes, and support your team.
Once you do that it is important to get buy-in from the rest of your organization so everyone is aligned in the direction you are going.
4. Build the Roadmap
Once you have identified the key technology projects that can address the identified gaps and opportunities, it is important to estimate their investment value and potential for return.
Decide whether these items fall under a foundation investment or an innovation investment. This will help you prioritize them further, understand your total strategic investment, and allow you to plan out the implementation of your solutions.
It is important to note that you do not need to make multiple changes at the same time. Adopting technology takes time and can be done gradually so it doesn’t disrupt the flow of your business.
5. Review & Budget
Now it is time to assess how achievable the plan is — calculate your total projected spend and compare it to the budget you originally allocated to your total technology investment.
This is where you discover that sweet spot between foundation investment and innovation investment. There needs to be a balance of both to ensure your technology remains healthy and makes the impact you are after.
Now that you know what technology you need and how much you should realistically spend on it, you will start to see the value of an investment that truly makes a difference.
Implementing Your Tech Strategy
A well-planned strategy is the best way to organize your investment and ensure you realize an optimal return.
But it can be tough for businesses with smaller, internal IT teams. That is because they must balance supporting the business and employees, integrating the technology, training their entire staff to use them, and then managing those tools. Most of the time, there simply isn’t enough time in the day. This added expense of time and capacity will impact how successful your tech strategy can be.
That’s when outsourcing your IT support is your best option. A key strategy-focused IT partner can help organize the development and implementation of your technology strategy, also providing you with additional support, and freeing your internal team to focus on business-impacting responsibilities.