At some point in your career, you may have encountered one or more of the following scenarios:
- Your CIO reads about a new industry solution that she feels will be a game changer and recommends that your company should be an early adopter so you are ahead of your competitors.
- You attend a presentation and demonstration of an emerging technology that you think is really cool, and wonder why your company does not have anything like it. You decide to present this idea at your next team meeting.
- Your CEO returns from a conference where he heard about an innovative technology that your key competitor has implemented. He has decided your company should adopt this technology so your company is not lagging behind.
What drives your investment in new technology?
Before jumping into investing in the latest technology, it is important to ask, “Are technology decisions driving your business processes, or are your business processes driving your technology decisions?”
If you invest in technology without understanding how it can help improve your business processes, you will likely end up customizing the solution to fit your business. A little customization is fine, but major customization can be costly to implement and maintain. Even worse, it may be completely unnecessary if there is a more fitting solution available that your team has not discovered. To avoid buyer’s remorse and ensure you are heading in the right direction, you should step back and consider the bigger business picture.
First, understand the business problem you are trying to solve, then document the criteria the solution needs to provide. This step will help ensure you have secured buy in and agreement of the project’s requirements from the very beginning. Next, research and identify solution providers.
This approach assures your project will support your company’s overall business strategy and objectives. Here’s an example we hear frequently. The business objective is to increase profit margins. Your team has determined that you need to overhaul the collection and distribution of your product data because your company receives fines from your trading partners for the poor-quality data you are providing them through the Global Data Synchronization Network (GDSN). These fines are eroding your profit margin.
Now that you and your team have identified the business process you want to improve (product data management) you may be considering investing in a Product Information Management (PIM) solution, or implementing a data quality program to help manage this process.
Here are six fundamental steps to include in your evaluation approach:
- Map your current business process, and identify the challenges. This exercise can be enlightening. You might be surprised by how few people within the organization understand the end-to-end process.
- Identify if a technology you currently use in-house can be leveraged to improve the business process you are addressing. If so, what are the gaps?
- Research technologies available in the marketplace that address your specific business challenges.
- Meet with a variety of technology providers to understand how their solutions will solve your business challenges.
- Understand the changes that will need to take place within your organization if you decide to implement the new technology. A strong change management plan will be critical; your people may need to perform new roles and responsibilities, and existing processes may change. Prepare your team, and anticipate potential challenges.
- Build your business case:
- How will this new technology solve your business process?
- How will you measure success?
- What will the key performance indicators (KPI) be?
- How will you establish your current baseline for each KPI?
- What is the expected return on investment?
- What are the risks if you do not invest in this new technology?
A solid technology evaluation approach positions your company for success. A competitive advantage is gained when you understand how a new technology will support your business strategy and objectives rather than getting caught up in the hype of a new solution, and trying to figure out how to apply it to your business.