Maximizing the Benefits of Data & Tech Investments: 4 Practical Tips
In an age where technological advancement evolves seemingly at the speed of thought, organizations face constant pressure to stay competitive by adopting new technologies. Data proliferates; data processing mechanisms grow ever more sophisticated; the organizations that win are those that can implement the right systems and realize the most benefit from their investments.
But reaping the benefits of new technology isn’t as simple as plug-and-play. For large organizations especially, there are hundreds — if not thousands — of compelling technological solutions to consider, many of which optimize for overlapping or opposing objectives.
Adopting the correct technologies, measuring their impact, and realizing the greatest possible benefit takes careful forethought and systematization. Several Chief Strategy Officers (CSOs) from the Outthinker Strategy Network weighed in on the best practices for realizing the benefits of data and technology investments.
4 tips for driving benefits realization in new technological solutions
1. Classify new technologies as “Core” or “Explore”
Large organizations in particular must evaluate new technologies on a variety of grounds.
Some new solutions will be essential to key strategic objectives; others will be more exploratory in nature — tied to a variety of possible futures beyond the next six months.
One CSO explained that they use a “Core vs. Explore” framework to classify potential new technological solutions. “Core” technologies are those linked to immediate strategic goals, whereas “Explore” technologies have less immediate relevance. Likewise, it’s important to apply different budgets, timelines, and success metrics for Core vs. Explore technologies.
Core technologies should get more budget, have longer timelines, and be held to ROI metrics. Explore technologies should receive limited budget, be evaluated over shorter timespans (in increments to check whether experiments are yielding fruit), and be evaluated by learnings rather than monetary ROI.
2. Adopt ordinal values to align the organization
One CSO raised a conflict common to searching for new technologies: When many members of a large organization are all tasked with finding new technologies, they will inevitably find technologies whose functions compete. If you adopt multiple technologies that optimize for opposing outcomes, you’ll end up with a lot of capital invested and no meaningful results.
To prevent this, adopt a series of “ordinal values” before embarking on a broad technological search. Clearly define organizational goals, as well as goals for individual teams and units within the organization, and ensure that those goals aren’t conflicting.
3. Build benefits realization into the budget.
Multiple CSOs agreed that the best way to spur both benefits realization and accountability is to build benefits realization into project budgets.
Start by calculating the size of the total opportunity. Then, isolate affected business units (those units under pressure to adopt new competitive technologies) and quantify the portion of the opportunity that each unit owns. Set budgets accordingly.
Lastly, hold business unit leaders accountable to budgetary guidelines and results. The best motivation, several CSOs agreed, comes from tying their compensation to project results in some way. Have them describe the current state, list hoped-for achievements, and describe the future state in financial terms against which they’ll be evaluated.
4. Create a tech “steering committee” to prevent conflicts
Even with the most careful planning, conflicts between different teams and/or technological solutions can arise. The CSOs universally recommended implementing a “steering committee” to prevent these conflicts.
The job of the steering committee is to evaluate the progress of technological initiatives on an ongoing basis. The steering committee should have members from each of the affected business units, to ensure that each has transparency into what the others are doing.
Much of the work of benefits realization happens before the search process even begins. Leadership teams must understand the total opportunity, identify affected business units, classify new technologies, and align all affected parties over common ordinal values. With this structural backdrop, business units have the knowledge and lines of communication necessary to find, report on, and adopt the right new technological solutions.