Imagine if your financial investment company had no strategy, would you trust them with your money? Furthermore, when you trusted them with your money are you okay with no return? What about a loss? Of course not! You expect they have a smart strategy that will provide you with a return.
You should expect the same from your technology investment. Properly allocated, technology spend is an investment. But a proper investment requires a strategy to ensure you maximize your return. So how do you begin building a proper strategy?
Before we get into that, it's important to understand that, from our perspective, there are two types of technology investment. The first is "foundational investment" - baseline costs to "keep the lights on," and the second is "innovation investment" - investment focused on moving you forward, improving your process, becoming more efficient, or moving into a new customer offering. The goal of any strategy should be to create a balance between your foundational spend and your innovation spend.
Here is how we look to approach it:
- Understand - Understand your business priorities FIRST. You can do this by asking the following:
- What are the biggest opportunities you currently have in your business?
- What are the biggest bottlenecks you have? What's holding you back from growth?
- What are the biggest factors driving improved customer satisfaction?
- Where are the innovators doing in your industry and are you falling behind? In what ways?
- Prioritize - Develop priorities based upon the questions above
- Identify Alignment - Explore and understand the capabilities and technologies that may help you fill the above gaps.
- Roadmap - Build your investment strategy through
- Identifying key technology (or process) improvement projects that can address the identified gaps and opportunities
- Assigning an estimated investment value to each roadmap item
- Determining your existing baseline technology costs ("keeping the lights on")
- Identifying which items are considered a "foundational investment" and which are considered an "innovation investment"
- Review & Budget - Calculate your total spend, evaluate it against your desired total investment, then determine your ratio of foundation investment vs. innovation investment
This is a simple example of how you can begin to strategize rather than just spend aimlessly on technology. We've boiled it down a bit, but it truly isn't that hard to get started on this strategy path. This also allows you to plan to spend enough on technology, on the right priorities, so it actually makes a difference.
According to a recent article from Stratix Systems, the average business spends 4-6% of total revenue on IT services. Are you spending enough on technology? Are you holding back your spending because you lack confidence in the investment? I would urge you to start by building a basic strategy, and begin down the road to aligning technology with your business!
Need help? Ask us about our Business Technology Strategy Management (BTSM) platform, and how we can work with you to build and deliver on your customized strategy! Our Team can
- Identify and discuss common opportunities, challenges, and bottlenecks in your industry
- Provide an efficient and comprehensive review of existing technologies that might align with your needs
- Provide insight into common process improvements we have seen, which may not even involve technology
- Identify all Foundational and Innovations investments
- Leverage our BTSM platform to prioritize and estimate costs
- Partner with you to deliver on your strategy
- Provide support, training, and future strategic services
Contact us today to start building a customized strategy.