In these turbulent times, opportunity doesn’t wait around. Despite macro-economic disruption from the pandemic, a global research study from IFS found 52 percent of companies intend to increase their spending on digital transformation. Only 18 percent said they would reduce it.
Yet whilst increased spending is on the agenda, nearly two thirds (64 percent) of decision-makers surveyed also said that the ability to deliver a measurable return on technology investment quickly, and to the satisfaction of internal stakeholders, was their number one concern. This worry over executing transformative change successfully is something that I see regularly when engaging with customers planning new initiatives.
Talking to our customers’ applications directors and C-level stakeholders as they plan for 2021 surfaces some all-too-familiar stories. Firstly, in the current economic climate, they know they need clear commercial objectives going forward. This almost always entails contributing to and developing an agile corporate strategy that can embrace new products, services, and markets for the business to grow.
Customers also realize that the processes and infrastructure that underpin the strategy must be fit for purpose. Software and systems need to be constantly refined and enhanced: there are always projects and transformations to undertake.
All these factors feed into a series of investment decisions. The challenge is making the right investment calls now that will deliver the performance the business will need through 2021 and beyond. Getting it wrong could see shareholders and business owners having to invest more over a longer period to keep the business competitive and up to date.
The pain of an opaque strategy
If a business doesn’t plan investment ahead, with a clear strategic focus, it inevitably suffers tensions and challenges.
Businesses will tell us, for example, that their IT infrastructure is overstretched. They see budgets getting reduced and reallocated whilst demands on already limited resources continue to rise. This usually happens because the IT function hasn’t been able to communicate a compelling business case. As a result, it is failing to attract the internal investment needed to fund meaningful business transformation.
We also hear of IT organizations struggling to meet demands to help the business improve poor results and reverse slow growth. Here, the root cause is usually an increasing backlog of business needs without the necessary software and solutions in place to respond.
The woes of IT projects overrunning or going over budget can almost always be attributed to an issue of scope management, or more specifically expectation management. On review, we see that scope continuously grows after the solution has been defined, and an effective go-live strategy – including phased roll-outs— is often not put in place and expectations set accordingly.
Lastly, we hear about internal friction between teams due to problems caused by going live with a solution that isn’t fit for business purpose. Issues include major escalations and even failed investments. The problem here usually stems from rushing towards an initial software design for go–live without an aligned business strategy. Businesses need to need to invest in the whole lifecycle of the project, ensuring the key stakeholders are fully involved from the outset. There are, in effect, multiple go-lives required throughout the lifecycle of a solution; companies need to invest the time to consider how the solution must evolve to meet its business needs. If ever a core technology isn’t viewed as strategic or a real business enabler, the question has to be asked why to invest at all.
As you can see, these issues are layered and nuanced. So, as we look towards 2021, what can we, as a software solution vendor, do to help customers visualize what success for their business could look like? How can we ensure investment is strategic, and identify and prioritize the transformational changes that will add the most value? Crucially, how can we make sure that our solution will continue to evolve to deliver further strategic gains over time?
The business case for better
To address these challenges, we have developed, as part of IFS Success, the Value Assurance service. Based on lessons learned talking to and working with hundreds of customers, we now offer a five–step process that, over a two to five–year period, continuously refines and maximizes the solution performance after implementation. Essentially the solution is constantly optimized to accommodate new corporate decisions – for example, mergers and acquisitions or expansion into new markets, products, or territories.
This process starts by carefully defining and agreeing exactly what success looks like, before distilling it down into a series of business improvement initiatives and enablers. It’s important to ensure everyone has absolute clarity about how and why the business should change, and the added value that should be realized. To do this we run a Digital Business Value Assessment to create a business case. This dashboard framework very quickly (in days) identifies a future vision that is commercially realizable, detailing the financial value of the improvement and investment required to make the changes. The output is a full business case report for board review and approval.
Once the business case is agreed, we assign actions against a collaborative plan that will achieve the target business goals over the lifecycle of the strategy. The infrastructure and governance needed to track and quantify the delivery and value gained over time are put in place, along with working procedures that ensure we can improve and iterate the solutions, and the ways the business uses them, continuously over time. This iteration is key, no strategy remains the same over an extended period and we must work together to ensure the solution landscape is set up to facilitate this evolution.
What is a Digital Business Value Assessment? Find out and get a sneak peek from @MattSOASmith in this blog. https://t.co/e81FBoC1AB
— IFS (@ifs) May 20, 2020
In conclusion, 70 percent of decision-makers we surveyed expressed concern over economic disruption, stating they were 20 percent more likely to plan increased spending. As your organization looks to allocate 2021 budgets, spending the necessary time to truly understand and verify the strategic business value of any proposed investment will pay dividends.
To learn more about strategic planning and executing a successful digital investment with IFS Success, watch the ‘Unlock Value, Drive Transformation’ webinar.
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