There has been considerable excitement over “emerging technologies” for many years. Experts have predicted Artificial Intelligence, the cloud, and IoT to deliver tectonic shifts. But not all enterprises that have invested in these technologies have attained enterprise growth. 

In the meantime, Industry 4.0 forced enterprises into spending more on technology. Companies invest in digital transformation to future-proof their technology and for digital-based growth. The pandemic accelerated tech adoption, especially cloud migrations. CEOs investing in technology have become impatient and expect top-line or bottom-line benefits. 

Here are the ways CIOs can demonstrate tangible business value from IT investments.

1. Prioritise the investments

Businesses investing in new technologies try to reap digital dividends. They seek accelerated growth beyond what is possible without technology. For instance, the enterprise may apply technology to smart products and services that sell more and increase brand value. Or they may introduce mobile apps, e-billing and other digital interaction capabilities. Deriving value from such investments requires prioritising the right digital initiatives. 

• Prioritise initiatives based on the potential impact on the top or bottom line. For instance, prioritise initiatives that improve customer experience to improve profit margins.
• Exam business needs. Perform a functional need analysis. Identify how the tech investments will improve the function, add value, and delight customers. Opt for the projects that deliver maximum returns. Pause initiatives with less impact to conserve resources.
• Identify connected initiatives. Often the success of a new tech adoption depends on the collective contribution of several efforts. Investment in only specific areas can lead to a situation where the enterprise does not get the expected returns. Consider field service management. A field service suite linked to the CRM, live maps, and inventory, optimise service scheduling and dispatching. Setting up a field management suite without such integrations leads to suboptimal performance. 
• Double-check if the new process or product has the desired business outcome and has a positive financial impact on the enterprise. Review and make tweaks as needed.

2. Promote innovation 

Barriers to technology are now passé. Most enterprises have access to the latest technology. The open-source movement has also made such access inexpensive. Thriving in today’s competitive marketplace depends on competitive differentiation. Differentiation sets in through innovation. 

• Use the new technology to innovate. Differentiate from the competition by coming up with better ways of working.
• Integration of the tech strategy with the design and planning process of enterprise functions. Map user flows across touchpoints and seeks improvements. Or conceptualise a product and implement the necessary technology.

3. Focus on the process

Most enterprises today strive to bolster or replace their existing operating models. But merely digitising processes does not deliver growth. Growth comes only when there is a focus on the customer and the processes become sustainable.

• Redesign processes rather than only digitising existing processes. Make sure the redesign makes things easy and seamless for the customer. Customers include the end-customer and employees, who are the internal customers of the enterprise.
• Use technology to redesign protocols with a focus on boosting customer satisfaction without compromising safety or process integrity. Consider health insurer Anthem’s digital technology initiatives. New tech investments spared the company’s call centres from answering ten million+ customer service calls. Digital channels such as a web portal, speech recognition software and mobile apps now handle 75% of customer questions. The company’s contact agents became 30% to 40% more productive, and the investments in call centre technology are paying back for itself. 
• Strive to add value for the customer. For instance, a new field service needs upgrades to back-end infrastructure to deliver efficiency gains.
• Scale up the new process to the site to amplify the economic value of the initial innovation. Ensure the execution is consistent across the organisation, especially in remote locations. 

4. Avoid fragmentation

Data, system, and process fragmentation inhibit tech investments from delivering gains.

Many enterprises give functional managers and regional heads leeway to customise IT systems. But such autonomy has unintended consequences, such as disparate tech stacks, different customer interfaces, and incompatible operating models. These issues make the enterprise incapable of benefiting from new technology. 

Stitching together a jumble of legacy or disparate systems is time-consuming and expensive. 

Consider the case of networking giant CISCO. The company had nine different tools for checking customer order status. Each tool accessed information from various repositories and defined key terms differently. The company also had 50+ customer-survey tools, and 15 BI applications, among 200+ other IT projects. With such fragmentation, the investments did not provide the expected efficiency or cost benefits. The company then upgraded its original ERP system and standardised its data and processes. The move contributed to Cisco’s strong performance over the past few years, delivering enormous gains for the tech ROI.

5. Reduce talent gaps 

Many enterprises reel under acute skill shortages as the competition for talent remains fierce. Skill development needs to catch up with tech advances. The double-whammy of recession and inflation put a budget squeeze on most establishments. As such, CIOs find it even more challenging to attract top talent. Without competent employees to apply the technology correctly, the expected growth may not come.  

• Deploy available talent to work processes that have the most significant impact. 
• Coordinate with enterprise business experts and business technologists and develop fusion teams. Make sure these teams have shared values and remain focused on rolling out the tech initiative. 
• Nurture the ecosystem. Successful implementation of enterprise technologies depends on qualified vendors and consultants. Outsourcing to the right vendor can bridge the skill gap to a large extent.
• Consider unconventional ways to access digital skills, especially for lower-level tasks. Examples include non-traditional talent pools such as interns, students and gig workers. The extra cost to supervise these workers pays back as successful tech adoption boosts revenues.

6. Identify the root cause for the failure

A 2023 Gartner survey estimates one in two digital initiatives not realising the expected value. 

• Identify the key impediments to the tech investments not realising value. The usual suspects include silos, resistance to change, and poor leadership. But the underlying causes could vary from enterprise to enterprise. 
• Draw up key metrics that determine the success of the tech initiatives. Make sure such metrics connect to business performance, are visible, and are easily measurable. The lack of such metrics sets the ground for responsible personnel to evade responsibility for poor results. 
• Create an outcome-driven work culture that values accountability. 

Technologies such as AI and the cloud are yet to have a significant transformation impact. It takes time for new technologies to go mainstream and for people to figure out how to best use them. For example, although introduced in the 1880s, the electric motor started to deliver productivity gains only by the 1920s. It needed reorganising work around mass-production assembly lines to make motors viable. Likewise, the personal computer became available in the 1980s. Still, it was only in the second half of the 1990s that PCs became an instrument of economic transformation. 

But in the meantime, competition has accelerated to unprecedented levels. New upstarts, flush with funds, offer steep discounts to corner market share. In such a state, enterprises have to position their IT investments to deliver a competitive advantage. Failure to do so risks the investment going down the drain without benefit to the company or its customers.