Companies are investing big money in technology, but more than half admit not achieving the desired benefit. Despite the likelihood of sub-optimal results, many businesses are still planning to increase their IT budgets by 10% or more. Why? Typically, you’d expect aggressive investments being made in the pursuit of competitive advantage, but many businesses are doing so simply to keep from falling behind.

With these less than desirable conditions, and global IT spending estimated to be more than $5.7 trillion in 2025, leaders should be asking themselves if they are making the right decision. Or perhaps the better question is, are they doing it the right way?

The problem:

A 2023 study reported by PWC learned the following from companies who fell short in achieving investment objectives:

• Only 15% of respondents felt employees knew about the change
• 84% believe it took longer that it should have to identify business requirements
• Only 5% think that collaboration between the business and IT was effective

Conversely, in organizations that were successful with similar endeavors, we find that:

• 86% of respondents thought that objectives were clearly understood across the company.
• 96% felt that leadership was engaged and supportive of the effort.
• 78% of people agreed that the transition was communicated in a multifaceted way.

These sentiments offer quite a contrast, identifying several specific factors that impact overall outcome. However, the overarching theme from both sources indicate a strong importance on change management. This is arguably the single most crucial element of a transformation project, and sadly it is also the most frequently overlooked. The people impacted by change can either be the biggest champions for it, or its greatest obstacle.

What to do about it:

Instead of treating user perspective/input as an appeasing afterthought, successful organizations recognize these individuals as both the source of critical information, and the primary customer. This vastly superior approach employs the following proven techniques:

• Early stakeholder engagement
• Active listening
• Robust communication plans with careful follow through
• Detailed training
• Taking the time to understand and explain the why

The steps above will greatly increase the rate of adoption and ultimately contribute to overall project success. 

Value Realization Strategy:

In addition to change-management, here are our other recommended practices for ensuring value realization.

• Make sure the right driver is behind the wheel
  • The business must lead the effort – from ideation to implementation.
  • The IT department is there to support the needs of the business unit, not direct them.

• Strike the appropriate balance between process and technology
  • The right solution is a combination of process and functionality
  • No technology is all-inclusive, and no one solution is likely to address every need. 
  • Understand that sometimes the best IT project doesn’t involve a new technology.

• Identify the benefit
  • Clearly define the value, linking to strategic objectives
  • Ensure there is a direct connection to the customer

• Prioritize the opportunities
  • Examine the potential investment portfolio wholistically
  • Select items that deliver the greatest benefit, considering all value types
  • Evaluate the opportunity cost

Bottom line:

Whether you are specifically looking to implementing one of the following:

• ERP
• CRM
• AI
• Mobile capabilities
• Data Governance

Or more generally looking to accomplish strategic objectives around:

• Efficiency
• Productivity
• Quality
• Cost savings
• Achieving competitive advantage

The strategies provided here will help guide success from evaluation through implementation. Given the rate of technological innovation, and increasingly competitive environment, businesses of all types and sizes will need to develop this core competency to remain relevant in the market and protect their investments. 

Looking forward:

Gartner forecasts significant IT spend increases over the next several years, with the biggest growth segments being software, and IT services.  These are expected to grow by 14% and 9.4% respectively in 2025 alone.  Projected interest areas for business investment include:

• Business analytics and business intelligence – global focus and spending expected to continue in 2025.  Estimates suggest a nearly 15% annual increase between 2024 and 2030

• IT automation – 75% of businesses are currently seeing value from this with more expected

• AI adoption – post hype, practical application

Overall, the 2025 spending trend is expected to be more practical and balanced. As business leaders are better understanding how to differentiate between the hype, and what is realistically possible, we can anticipate seeing more practical investments to derive actionable insights from data and address customer wants/needs.  

Want help identifying and implementing the right investment opportunities for your organization? Schedule a complimentary consultation to get started now.