Investing in technology: how to achieve maximum returns?

Technological transformations often do not achieve the anticipated success. Why does this happen? Today we know that the biggest challenges standing in the way of maximising returns on technology investments turn out to be unresolved change management issues in the adoption processes of the technology itself within companies.

In order to verify to what extent technology transformations actually deliver satisfactory returns and to see what is behind the level of return on investment in technology, Strategy& Polska conducted a study, in the form of an online survey (CAWI). The poll was carried out between February and March 2023 among 90 key representatives of companies from the retail and FMCG sectors doing business in Poland.

Representatives from both technology and business fields took part in the survey.

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What characterises companies that have failed to achieve a return on investment in new technologies?

Only 5%

of respondents believe that collaboration between IT and business was effective
As many as 84%

of respondents say it took too long to work out business requirements
Only 15%

of company representatives indicate that employees knew about the upcoming change

%

of respondents admitted that the maximum return on investment in technology was not achieve

^{Source: report 'Investing in technology: how to achieve maximum returns?', April 2023.}

New technologies are still one of the most popular themes in the market, with companies investing increasing amounts of money in the implementation of new systems and tools. Their aim is to strengthen competitive advantage, increase organisational profitability, reduce costs, improve process efficiency or increase customer and employee satisfaction. We can speak of a successful technology implementation when the money invested in it brings tangible benefits. If, as a result of the technological transformation, the company achieves the intended goals (the above-mentioned indicators are significantly improved), it means that the maximum return on investment in technology has been achieved. A situation in which companies do not achieve this goal is, in short, a loss because the money spent has not delivered the intended benefits.

We refer to the measurable success of technology transformation, measured by achieving the maximum return on technology investment, as ROTI. ROTI takes into account:

Efficiency of the organisation after implementation of the technology

Profitability after implementation of the technology

Level of customer satisfaction

Level of employee satisfaction

Are technological transformations delivering the intended results?

Krzysztof Badowski,
Managing partner of Strategy& in Poland

Agata Katyl
Deputy Director Strategy&

Companies plan to spend around $4.5 trillion on technology investments in 2023 alone. The use of tools related to artificial intelligence (AI), the metaverse, cloud, automation is accelerating. Investment in cyber security is also growing. All of this requires business to constantly evolve technologically and continuously transform and adapt organizational structures. Very often it is the way technology transformations are conducted that directly impacts organisations' competitive advantage, the ability to optimally implement companies' business strategy and support corporate environmental sustainability goals.. The leaders of Polish companies and global enterprises prioritise technology-related investments. This is the conclusion of the 26th CEO Survey conducted among nearly 4,500 heads of companies worldwide. In Poland, business leaders plan to spend more on automation projects in the next 12 months (64% of them). 59% of the heads of companies intend to implement specific technologies resulting from global trends (cloud or AI) and raise the qualifications of their employees (56%), because without their knowledge, technology alone is definitely not enough.

That is why the following questions are so important today: do the resources invested in technology give the maximum possible returns? What challenges do organisations face in managing technology transformation? What do organisations that achieve success as measured by return on investment emphasise? In turn, what do those who are not satisfied with the results of their technology investments overlook? We invite everyone who intends to strengthen their competitive advantage through technology transformation to read on. We hope that our insights into the effectiveness of these inevitable processes will help you achieve better results from your projects and keep you away from making mistakes and mitigate technology transformation risks.

What has helped companies the most in achieving ROTI?

%

of respondents agreed that the leaders in their company were engaged and supported their teams in going through the changes associated with technological transformation

^{Source: report 'Investing in technology: how to achieve maximum returns?', April 2023.}

Leaders are the glue of transformation because they have a direct impact on their teams' perception of the change taking place. By setting goals for the teams' daily work and evaluating their performance, they influence employees' commitment to the transformation process and their preparation for change. Insufficient commitment on the part of the leader and a lack of consistency between the leader's messages and the objectives of the transformation project delays, and sometimes even prevents, the effective implementation of technological transformation.

Properly defined and consistently understood goals within an organisation give the right direction to all activities and decisions made during the technology transformation. As such, there are a number of actions worth taking, which include developing a consistent vision with leaders, developing leading messages and ensuring a comprehensive communications plan that takes into account all key stakeholders.

%

of people indicated that objectives were consistently understood within the organisation.

^{Source: report 'Investing in technology: how to achieve maximum returns?', April 2023.}

%

of respondents acknowledged that communication about the technology transition was multifaceted, giving space to share opinions.

^{Source: report 'Investing in technology: how to achieve maximum returns?', April 2023.}

The essence of properly planned communication in a technology transformation project is that each stakeholder receives adequate information, at the right moment in the project and in a format that is tailored to them. This mitigates the risks of missing out on important stakeholders and makes the adoption of change itself faster and more efficient.

Market practice and the survey results consistently indicate that the biggest challenges of technology transformations are in the area of change management within technology adoption. This is one of the key aspects that influence the success or failure of the transformation undertaken.