Before businesses take a giant leap forward into technology-enabled change, they need to step back and ask themselves one big question. How do we build the environment – with the right talent, culture and ecosystem – so that tomorrow’s processes run on tomorrow’s technology?
Technology is improving businesses around the world. According to the Tech Horizon report series from EY, only 1% of respondents completed a technology-enabled change in 2020. This will grow to 11% in 2022.
However, some changes have followed the promise of the package. In fact, only 10% of changes across the Asia Pacific region exceeded expectations, while a third (33%) fell short. Why is this?
More than inheritance
Sooyeon Kim, leader of EY’s APAC Artificial Intelligence practice within the Technology Consulting business, put the spotlight on one of the key reasons for underperformance – the fact that new technology not only replaces legacy systems, but at the same time also need to reimagine the business processes it supports:
It doesn’t make sense to upgrade to the latest technology but keep business processes as usual. For this reason, many business leaders view the history of technological change as risky propositions. “If our processes can’t do it, why would we upgrade our technology to the state-of-the-art?” used to be the common refrain.
But outdated business processes and a lack of investment in technology have proven to be a dangerous combination during the pandemic.
Since then, businesses have started investing in technology at scale and speed. Investment in data and analytics, for example, will accelerate in 2022, with 57% of respondents prioritizing it in the next two years, compared to 31% in 2020. It is followed by the cloud (49%), internet of things (44). %) and artificial intelligence and machine learning (35%).
These four technologies are at the foundation of successful innovation. But the technologies themselves are not as important as the business environment that supports them. How do you build this environment? Four areas of focus:
- Focus on key domains
Rather than investing in a single technology tool or platform, choose a combination of technologies based on your organization’s goals. Start by pinpointing your company’s “secret sauce” and then focus on key areas where you can drive revenue and growth. - Change as fast as your customers
Consumer preferences are evolving at a rapid pace and businesses must adapt. In fact, you should invest in the right data analysis and technologies to better understand your customers’ needs. But changing mindsets is also mission critical.
Commit to innovation and new product development to promote customer centricity and build trust by establishing governance measures for ethical technology deployment.
- Receive data and next-generation analytics
Few organizations are truly data-centric, but many are well on their way by shifting resources to fill their data gaps with analytics. Use data to generate intelligence and insights and to continuously improve your operating model, products and services. You may also need to take steps to justify your continued investment. - Challenging processes to create new value
True tech-enabled innovation goes beyond digitizing paper-based processes. It reengineers the process, automates tasks and connects systems on a large scale. To do this successfully, every task must be challenging. Why do you do this work in this way? Is there a better way? By identifying processes that can be streamlined – or even, in some cases, eliminated – we can focus our human talent on high-impact, high-return tasks.
Get it right and reap the rewards. As confirmed in the 2022 Tech Horizon report, companies with technology-enabled changes that exceed expectations predict a 6.2% increase in revenue growth for 2022. In comparison, the changes are low relative to a 5.4% revenue growth forecast.
Smart companies use technology and data to improve efficiency, cost savings and the customer experience. But the smartest companies have also laid a foundation, with the right skills, culture and ecosystem of partners, to ensure that tomorrow’s processes run on tomorrow’s technology.
The views expressed in this article are those of the author and do not necessarily reflect the views of EY.
