The past three years have taught companies a lot around the need to build agility and resilience into the operating model, while being able to manage and control the cost base carefully. Harnessing the potential of technology is a key lever you can use to improve your ARC balance.
When seeking to leverage the right mix of technology, companies may aspire to unlock business value in a number of ways.
Excessive levels of manual and offline working can be a time and morale drain for highly qualified members of your team. For most companies automating manual processes still represents an opportunity for a material productivity improvement while also improving resilience, since there is less reliance on key individuals as a result.
Mastering the data challenge means having accurate and timely data to support operational, management and strategic decision making. It can be the difference between seizing or missing key commercial opportunities, or making the correct investment decisions. This is crucial in an era where businesses need to be fully informed in order to respond and make decisions, with new information, in an agile manner.
The impact of systems and technology on team members is now a frequently cited reason for leaving. One CFO recently told us that one of their top three reasons for investing in a new ERP system was that they'd no longer have to apologise to the finance team for their excessive overtime in making up for the legacy system deficiencies.
Old legacy systems and technology create risk. Vendors and partners cease their support and there's no ability to upgrade old functionality or incorporate new statutory requirements. Understanding and closing off these risks is vital if your business is to remain resilient against the risk of system failure, cyber attacks or failure of key controls.
Despite the opportunities, why are some companies still reluctant to invest in new technology? Stories of programmes that transform a business tend to remain hidden, while those of programmes that run three times over budget and time, or fail to deliver on the business case, are often the ones that people remember.
Here are three common, critical pitfalls to be aware of when investing in new tech:
Before embarking on expensive replacement projects, consider whether you've fully evaluated the optimisation opportunities within current systems. This isn't relevant where systems are obviously out of date or end of life. But in our experience companies often blame lack of automation or control on their existing systems without fully exploring how they can be improved. We often see that issues in relation to automation and control are the result of misalignment between systems, process, and roles and responsibilities – rather than deficiencies with the systems themselves.
Understanding and having a clear picture of all potential and planned technology investments is essential. Most companies have a roadmap for this, although the depth and quality can vary dramatically. Leading businesses maintain their plans as a live document. They have the agility to change direction quickly based on new information and business priorities. They're clear on where they're making strategic versus tactical investments. And they ensure they invest in understanding and carrying out diligence on the vendor landscape
We've seen a wave of companies coming back into the market recently to replace systems implemented in the past five years – the dreaded 'rip and replace'. This should never happen with the right level of planning and preparation. Companies have been sold the dream of new systems, implemented at low cost, with insufficient focus on whether the software can truly deal with areas of business complexity, on how it might integrate into the wider systems architecture, or in gauging whether the software vendor and its implementation partner represents a good cultural fit with the business.
Leveraging technology to improve agility, resilience and cost should be an objective for almost all companies. But there's no silver bullet. Achieving successful outcomes requires diligence, careful planning and high-quality implementation.
As a check on your technology hopes and fears, ask yourself the following:
There are no guarantees when making an investment in technology. But companies that successfully address these questions will dramatically improve their probability of leveraging technology to deliver agility and resilience whilst lowering costs.
For more insight and guidance, get in touch with Mark O’Sullivan.
