July 17, 2024

Reframing The Future Of Technology Investments

Reframing The Future Of Technology Investments

EY’s Global Chief Client Technology Officer, bringing technology products to EY clients.

If the past year has taught us anything, it’s how quickly and dramatically the market can change, reinforcing the need for businesses to stay agile and adaptable at all times. With shifting priorities and challenges brought on by the global Covid-19 pandemic and other external factors, having the proper technology and processes in place has proven to be critical to success. While it’s important for organizations to remain nimble, technology must also play a huge role in scaling during unforeseen conditions.

In my experience bringing technology-enabled solutions to global organizations, cloud consolidation and artificial intelligence (AI) integration have been two key initiatives that have helped businesses effectively budget for unexpected circumstances through the past year.

Start With The Three Buckets Of Budgeting

There’s no doubt that the Covid-19 pandemic has condensed the time horizon for technology initiatives to realize value. That’s why companies need to implement processes and technologies that allow them to think on their feet.

When building a framework for technology budgets, organizations should consider three main areas:

1. The success of their foundational investments.

2. Stand-alone products.

3. Keeping flexible budgets.

Foundational investments are large, overarching expenditures necessary for transformation, which might include replacing or updating legacy systems. In fact, 68{18fa003f91e59da06650ea58ab756635467abbb80a253ef708fe12b10efb8add} of CEOs plan a major investment in data and technology in the next 12 months, according to my organization’s 2021 CEO Imperative Study. In addition, focusing on stand-alone products allows leaders to analyze different products and applications as individual items. It provides the necessary assessment of profitability and success, so individual solutions can be removed or swapped out to improve effectiveness. Finally, organizations shouldn’t underestimate the importance of flexible budgets, which act as contingency funds. They allow you to have the flexibility to quickly react to changes in the marketplace without too much financial risk.

Cloud Consolidation Will Shift Budgeting Strategies

The key outcome of great cloud consolidation is a reduction of budget fragmentation. As cloud players continue to expand their stacks and offerings, and organizations increasingly invest in the cloud, budget approaches are simplified. As a result, organizations can trust the strategy of their preferred cloud provider and streamline budgets in line with this direction. Cloud providers are increasingly in the position to advise organizations on how to best build and maintain tech architecture, freeing up time and money for customers who would previously need to determine how to integrate it.

Cloud companies are packaging their offerings, which eliminates time spent analyzing which technologies should be bundled for optimal integration success. When it comes to talent, businesses can seek out a variety of different skill sets to grow their technology teams and execute their business objectives — knowing that they have the appropriate technologies in place. The benefits of cloud consolidation outweigh the challenges.

Prioritizing AI Adoption And Integration

While many view AI from a single applications perspective, it’s vital for businesses to take a “big picture” view and include AI in their budgeting strategies. Single applications are fine on their own, but that’s not a game-changer nor what moves AI forward.

In my experience as an AI researcher, I’ve learned that it’s best to think about AI through the same lens that the technology world views the cloud: It’s everywhere and integrated into the majority of processes used to complete tasks and collaborate every day. AI could be implemented in the same way. Organizations should consider creating and implementing holistic AI strategies that allow it to be built into the architecture of the technology we’re implementing today and in the future.

The key to this is asking the right questions. Instead of asking whether AI can improve a process, it should be about making sure AI delivers on efficiency as a baseline and enables companies to bring the right offerings to customers. A good example of this is collaboration technologies. While technologies have been around for a while to enable teaming in an increasingly global workforce, it’s unimaginable these systems could operate without the level of sophistication they offer in today’s reality of all-remote workers thanks to constant process improvements. 

The Path Forward

The previous year has forced businesses to rethink their technology investments and focus on what processes and solutions will truly move the needle. We know that the ability to be flexible and adaptable has never been more critical. Organizations should build budgets that allow them to safely and quickly respond to unexpected market changes, prioritize holistic AI strategies and capitalize on the benefits of cloud consolidation. By anticipating change and remaining agile, companies are prepared to respond to the unexpected.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

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