For years, companies have looked to various digital technologies to help them better serve their customers and improve operational efficiencies. Kayla Flint, principal, Baker Tilly Digital, said at a recent Baker Tilly webinar, “It's pretty much impossible these days to get out of a client conversation without a technology initiative being brought up. The challenges and the resources associated with outdated processes and systems gives organizations a compelling business case to make investments in technology.”
Flint noted that in 2020, as the COVID-19 pandemic affected all parts of the global economy, “clients postponed their large technology transformations in favor of more critical and smaller technology initiatives that would give them the biggest bang for their buck.”
For CFOs, digital transformation is a top priority, but only if a new technology drives revenue and improves process inefficiencies. Flint said, CFOs “are looking for IT transformations that allow work to be done bigger, better, faster and cheaper.” She said the pandemic brought to light all the cumbersome, manual processes that organizations used. Organizations had to quickly explore the marketplace for new technologies to replace those manual processes.
“Businesses considering a new technology have to focus on what is the business problem they are trying to solve and what is the value behind that business problem,” Dave DuVarney, a principal with Baker Tilly Digital, said. One way to do this is with an ideation session, sometimes with the help of an outside partner, using design thinking to take the business through a facilitated process to brainstorm new ideas and avoid siloed thinking.
DuVarney said organizations must focus on the business side of how a new technology solution will define or change how they interact with customers, build new and innovative products, and improve operational efficiency.
Organizations are increasingly looking at their data as a core asset to what they do, DuVarney said. The data maturity journey reflects an organization’s ability to work with its data differently over time.
At the early stage of data maturity, organizations tend to do more manual manipulation of key data, which usually provides a backward look at the business. The data provides a picture about what happened, but tells the organization nothing about where it is going.
Data maturity in an organization is moving from hindsight to foresight, where data provides insight into things like the sales pipeline, product development and correct staffing levels, DuVarney said. At the far side of the data maturity model, amplified intelligence and automation means organizations are managing their data so well they need minimal human intervention to make smart decisions. A prime example of this is stock exchanges where computers take automated intelligence to make trading decisions.
DuVarney said, “The hard part for organizations is knowing what is possible to do with their data, struggling to get the right data, and then giving up on the process too early.” He added that data maturity ultimately means having the right infrastructure in place, not necessarily computers and software, but the right people who understand the strategic vision and align data to carry out that vision. “Data maturity becomes a core capability for an organization,” he said.
Technological maturity is equally as important for organizations as data maturity. Purchasing a technology solution requires research within an ever-evolving and ever-changing technology marketplace, Flint said. Then, the organization has to implement and manage the solution to realize its full benefits.
Businesses also have to effectively budget for the new technology, shifting dollars from maintenance for existing tools and platforms to technology as a platform for growth. Flint noted that businesses are burdened by “technical debt,” essentially the cost to maintain existing technology solutions that don’t necessarily work well together. Organizations have to budget to both maintain and undo the spaghetti bowl of technology created over time. With the move to cloud technologies, budgeting for technology is shifting to be more about ongoing platform subscriptions and the ongoing cost of licenses to access those platforms.
When building the budget and business case for a new technology, businesses should consider the opportunity cost of taking administrative work people are doing today, moving that work to an automated tool, and redeploying resources on more strategic initiatives.
Flint noted organizations have different appetites for risk and innovation when it comes to new technology. Some are early adopters that see a competitive advantage in consuming technologies as soon as they appear in the marketplace. Some are fast followers, watching closely how their competitors implement new technologies before considering that technology in their own organization. Finally, the more traditional organizations are those that want to see more use cases before adopting a new technology.
Each level of risk has its own risks and rewards, Flint said. Because the pace of technology has picked up, there are indications that companies that have taken a more traditional approach to emerging technology are moving to the fast follower category, as the proof points are coming out quicker and implementations of new technologies are happening sooner in certain industries or sectors.
After going through the process of understanding data and technological maturity, and redeploying resources and processes to do work effectively, Flint noted, the organization has to maintain the new technology in a sustainable way. For example, if the organization moves applications to the cloud, it will create a new responsibility within its business functions to maintain and advance the configurations associated with the cloud technology. The role of IT will shift to focus on integrations and consuming upstream and downstream data.
“Technology is here to stay. Your competitors are going to invest in it, and you need to think wisely about how you would invest in it as well, understanding both your data and technology maturity,” DuVarney said. He added organizations have to understand where they are, where they want to be, but also how that relates to the strategic objectives of the organization. In the end, DuVarney said, “technology can be a driver for revenue growth.”
The e-book related to this webinar is available for download.
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