By Damani Short
Pressure to deliver value from technology is at an all-time high. Across industries, companies will spend 2-5% of revenue on technology and need to demonstrate the value of that investment. To do that, leaders need to treat their technology investment with an investment portfolio approach, driven by the overall strategy of the company.
In this video, Damani Short shares three key questions to ask yourself in order to make that critical shift to a business-centered technology approach that will deliver a higher return on investment..
If you’re seeking to increase your return on technology investment, contact Lexico.
Hi there, this is Damani Short, Founder, and CEO of Lexico, a transformation services company. Today, we’re going to talk about how C-suite leaders can drive improved value realization through their technology investments.
We’ll share three key questions to ask yourself in order to help you make that shift towards more of a Business Centered Technology approach, one that’s proven to deliver better results for companies far exceeding that of traditional means.
For many leaders, this will require a fundamentally different mindset, one where we treat technology investments as assets in an investment portfolio. Like any asset there’s expectations of a return profile, both financial and non-financial. On the non-financial side, it might be looking at things like improved customer and employee experience, risk reduction, efficiency improvements, and so on.
As we think about the current economic environment, there’s more pressure than ever to deliver results. Correspondingly, that pressure is translated over to technology and technology investments not just on the project or the CapEx side, but also on the OpEx side.
Across industries, companies will spend anywhere from two to five percent of their revenues on technology. So if you take a billion-dollar business that’s 20 to 50 million dollars a year. Better yet, look at the last five years in your company, add up those dollars, and think about to what extent that’s translating through in terms of business results.
For businesses with operations spanning multiple sites and geographies, the investment approach to developing business capabilities is more important than ever, helping ensure that there’s consistency and repeatable execution that’s solidified with technology to produce sustainable benefits over time.
So what are these questions we need to answer?
- First, do we have a map of business capabilities on a page which serve as a reference model for our business, and how are we using these capabilities to drive our investment strategy? Which capabilities are core versus non-core, or maybe high priority versus low priority? Where are we investing for cost and scale benefits, alternatively where are we investing for growth and innovation?
- Second question: How do these investments translate and how do these capabilities in this capability strategy translate into our investment portfolio, not just near term but in the coming years?
- And then third, how do those returns look in our investment portfolio as it relates to margin improvement, risk reduction, increasing the ability to scale and grow, and improving customer experience?
Shifting our mindset to a Business Centered Technology approach starts with us as leaders asking ourselves these questions. If your answers to these questions aren’t satisfactory, we’d love to hear from you. Feel free to comment below or email me.
With that, thank you for your time and best of luck to you and your teams.