3 Key Questions for Leaders to Deliver a Higher Return on Technology Investment

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.

The Importance of Technology Investments

Unlocking Value through Strategic Technology Investments: A Business-Centered Approach

In today’s rapidly evolving business landscape, technology investments have become a crucial driver of success for companies across industries. C-suite leaders play a pivotal role in ensuring these investments yield improved value realization. In this article, we will explore the importance of adopting a business-centered approach to technology investments and provide three key questions that leaders can ask themselves to drive better results.

How to Invest in Technology

Shift to a Business-Centered Technology Approach to Maximize Technology Investment ROI

To maximize the benefits of technology investments, leaders must embrace a fundamentally different mindset. Rather than viewing technology as a mere expense, it should be treated as an asset in an investment portfolio. This approach necessitates having clear expectations of a return profile, encompassing both financial and non-financial outcomes. Non-financial aspects may include enhanced customer and employee experiences, risk reduction, and efficiency improvements.

The Increasing Pressure to Deliver Results

In the current economic environment, there is mounting pressure on companies to deliver tangible results. This pressure extends to technology investments, encompassing both capital expenditure (CapEx) and operational expenditure (OpEx). Across various industries, organizations allocate approximately two to five percent of their revenues to technology. For instance, a billion-dollar business may invest between 20 to 50 million dollars annually. It becomes essential to evaluate how these investments align with actual business outcomes over time.

The Significance of Investment Approach for Multisite Operations

For companies operating across multiple sites and geographies, the investment approach for developing business capabilities becomes even more critical. Adopting a strategic approach ensures consistency, repeatable execution, and sustainable benefits over time. Technology plays a vital role in solidifying these capabilities, enabling businesses to achieve long-term success.

How Can You Better Invest in Technology?

To drive value and strategic alignment with technology investments, leaders must ask themselves three key questions:

1. Mapping Business Capabilities and Investment Strategy

  • Do we have a comprehensive map of our business capabilities?
  • How are we leveraging these capabilities to drive our investment strategy?
  • Which capabilities are core versus non-core, high priority versus low priority?
  • Where are we investing to achieve cost and scale benefits? Alternatively, where are we investing for growth and innovation?

2. Translating Capabilities into the Investment Portfolio

  • How do our investments align with our capability strategy in the short and long term?
  • How are these investments integrated into our investment portfolio over time?

3. Evaluating Returns and Business Outcomes

  • How do the returns on our investment portfolio translate into tangible improvements such as margin enhancement, risk reduction, scalability, growth potential, and enhanced customer experience?

Shifting Mindset and Taking Action

Embracing a business-centered technology approach begins with leaders asking themselves these critical questions. If the answers are not satisfactory, it is vital to take action and explore ways to realign investments with business objectives. The comments section below or direct email communication with industry experts can provide valuable insights and guidance.

In an era where technology investments can make or break a company’s success, C-suite leaders must drive value realization through strategic decision-making. Consulting services can provide strategies and guidance to achieve optimal technology alignment and business outcomes. Adopting a business-centered approach to technology investments enables organizations to unlock their full potential, ensuring sustainable growth, innovation, and improved business outcomes. By asking the right questions and taking proactive steps, leaders can position their teams for success in today’s dynamic business landscape.