Features

The Road to Technology Acquisition

With newer technologies making inroads into business process across sectors, increasing expectations of ROI, and amplifying stature of IT in boardroom discussions, Enterprise IT World teams up with the CIO community to decipher the right approach to technology acquisition for today’s organizations.

The propulsion and proliferation of technology across every aspect of business has redefined how IT departments are perceived today. New technological innovations including cloud, social media, data analytics, mobility, the internet of things and gamification have quite literally forced large companies to think differently about enterprise data, its security, constantly looking for new business models to serve clients better.

Companies across almost all verticals including banking, retail, media, entertainment, IT services, communications, transportation, healthcare, recruiting and education, have been significantly impacted by innovative use of new technologies by CIOs. Enterprises which are technology-enabled are disrupting traditional ones by leveraging technology advancements to create new business opportunities.

The nature of each will vary depending on the involved companies’ business strategy and goals. A company may be seeking economies of scale, access to new markets, elimination of competition, or acquisition of assets – all goals that require different approaches to technology decision-making and integration.

Organizations across different spheres view enterprise digitization differently. Manufacturing or agriculture companies see technology as a business enabler or a necessary cost center supporting back office applications while others view technology as essential to growth and increased revenue. The enterprise’s perspective on a technology’s role its business is a big factor in a CIO’s approach to technology acquisition. Keeping that in mind, we can safely say that the fundamental roles of a CIO are to help the enterprise achieve its business goals, manage risks, and maximize value.

Significance of a Structured Approach to Technology Acquisition

A structured approach when upgrading or acquiring entirely new technologies is undeniably critical. It is perceived that what prevents many CIOs and their company boards from driving growth agenda by adopting newer technological enhancements is a scarcity of knowledge and understanding of the technology in question. A recent study from third party sources observed that most enterprise boards around the world fall short when it comes to diversity and technology disruptions. Another recent survey revealed a great deficiency in IT skills among C-suite executives at the board to endorse and adopt technology advancements and new innovations for business growth. While almost 55% of the board executives had accounting and legal skills, only a meagre 3% had the desired technological knowledge, experience or relevant skills.

A recent enterprise level survey by PwC revealed that a high majority of board members across organizations believe that technology is mission-critical and crucial to the survival of a business. Based on surveys undertaken and reports published, it is evident that companies do not have sufficient skills at the board, CEO and senior executive level in technology. Anil Porter, AVP – IT & GDS Services at Interglobe Technology Quotient, who is the de facto CIO of the company, believes, “A structured approach to technology acquisition is very critical. Most CIOs today lack the business understanding and/or do not feel entirely comfortable with technology. Factors like what is the desired business outcome and what is the expected ‘Return on Investment’ are the fundamentals of technology acquisition for enterprises.”

Most CIOs today lack the business understanding and/or do not feel entirely comfortable with technology.
It is important for an enterprise to understand the role of a technology in business transformation and growth before acquiring it. For success in the digital age, successful use of latest technological innovations is the mantra for positively impacting corporate strategy, competitive landscape, policies, operations, revenue opportunities, employee collaboration, customer experience and much more. IT decision makers can aid innovation by scouting useful technologies and applying newer technologies to improve existing processes. Not only should a CIO do a good amount of research on the company, people and technology to create a sustainable technology model, he needs to clearly define the needs of the enterprise and the business goals he strives to achieve through the deployment.

Mostly, CIOs and IT Decision Makers are adequately skilled in areas like initial deployments, ensuring that key influencers understand the scope, purpose, and goals of the initiative. With recent developments in social technology and third platforms, there is an increased demand of continuous skill to keep enterprise deployments relevant. The rise of the third platforms has forced this approach to be increasingly “strategic” and to “add value” through adoption of mobile technology, social, cloud and the analysis of customer and market shifts in a bid to lead innovation in business processes.

Challenges Faced When Acquiring New Technologies

Although technology offers considerable promise, enterprises of all sizes are struggling to find out how to effectively use it. Making use of new tools inside an enterprise imposes more channels on already overwhelmed staff. Enterprises are forced to look for alternatives woven into their existing IT fabric that helps users examine and scrutinize information and augment existing business processes. This is crucial to alleviating rather than adding to technological overload. Satish Papnoi, CTO at Pathways World School (Sarla Holdings) opines, “The biggest challenge when acquiring new capabilities is user acceptance, hence change management plays big role in implementing any new technology. Enterprises have less knowledge about new technologies, finding and assessing best implementers for their enterprises is very difficult.”

“The biggest challenge when acquiring new capabilities is user acceptance, hence change management plays big role in implementing any new technology.”

Satish Papnoi
CTO
Pathways World School (Sarla Holdings)

In particular, challenges differ from sector to sector and enterprise to enterprise, according to Anil Porter. He states, “For enterprise 50 Cr and above, processes are bottom-line driven. Topline segments are the ones who have the budget initiative. For 100Cr and above, 50% is topline driven and 50% innovation driven. Above 250 Cr will be completely innovation driven whereas 500 Cr and above are mostly topline value driven. For medium enterprise companies, analytics and retention are the main challenges. What is the customer looking for? Am I able to provide what customer wants? Is the technology apt for the intended business outcome?”

Good amount of research on company, people and technology goes a long way in creating a sustainable technology model.

A lack of knowledge about the technology, gives rise to further implication like difficulty in finding and assessing best implementers, and a not so clear future technology road map for the enterprise. As Satish Papnoi notes, “No clear ownership and accountability leads to further complications and sometimes too many cooks spoil the broth.”

Adding more value and becoming more strategic is a critical task for CIOs. A right approach will aid in developing and executing an end-to-end innovation process by which innovations are more likely to be discovered, better evaluated leading to better profit conversion. CIOs also have the challenge to drive the creation and management of the innovation process as a key member of the executive committee for strategic business management. In short, analyzing, evaluating, finalizing and implementing the right technology on which the enterprise will be able to execute its major innovation process is a challenging task for CIOs today.

Advice from the CIO Community

For new entrants to traditional sectors, an enterprise can build a significant market share quickly by creating better customer experiences and engagement models supported by technologies; delivering them at a significantly lower cost than competition, offering better products or services to clients and creating impressive ROI for shareholders and investors. For those looking to leverage growth through technology advancements, improve their understanding of disruptive technology trends in their own industry and related industries.

“Before acquiring any technology, it should be determined as to what is the strategic advantage from it. Technology selection is all about topline initiative or bottom-line initiative.”

Anil Porter
AVP – IT & GDS Services
Interglobe Technology Quotient

For this, increasing board and C-suite awareness in relation to strategic benefits and risks is critical. With the innovations today, enterprises are adopting an agile and lean approach to technology-enabled innovation; prioritizing technology enabled business growth and transformation as a major corporate initiative. Anil Porter of Interglobe adds, “It is not about the best technology but about balance. What is it that you want to improve at, Top-line or Bottom-line. Mostly, all CIOs are driven by bottom-line reduction as it gives true value to the process.” As his advice for fellow CIOs looking to structure their approaches towards technology acquisition, Porter adds, “Before acquiring any technology, it should be determined as to what is the strategic advantage from it. Technology selection is all about topline initiative or bottom-line initiative.”

Satish Papnoi elaborates his advice on the subject, “An enterprise needs to have clearly defined needs before acquiring a technology. It should invite proposals from vendors and have proper demonstrations.” He further said, “A CIO should not go on what vendor is showing and should instead ask for the enterprise’s need defined in the very first step.” Good amount of research on company, people and technology goes a long way in creating a sustainable technology model. “Enterprises should perform the POC and test all possible scenarios as per the need, before giving go ahead for a technology,” he continues, “ They should have a defined road map with clear accountability, prepare end users for new technology adoption through engagement and enabling change management wherever it is need Top to bottom or Bottom to top.”

An enterprise needs to have clearly defined needs before acquiring a technology

Training the stakeholders and giving them full ownership for failure and success of the technology is as critical as deploy the technology together with end users. All in all, CIOs need to become bolder, increasing their appetite for failures/risk taking at the same time seeking sufficient external/ independent advice in order to avoid missing out on new opportunities that arise. A CIO is a business leader and should lead by example in adopting new innovations and technological advancements.

Technology Acquisition in 2017

In 2017, it is predicted that most CIOs will look to acquire both efficiencies and differentiation at the same time. A recent survey observed that around 80 percent of senior level enterprise executives believe that innovation will drive efficiencies and lead to a competitive advantage. For a significant number of them, technology is one way of achieving both. Close to 70 percent CIOs are investing in IT to reduce costs and become more efficient, while 54 percent are also channeling funds toward enhancing growth.

Enterprise technology is predicted to be bigger than ever before in 2017 with deployments across various sectors. Satish Papnoi gives a glimpse of the technology acquisition plans for his organization in the New Year, “Apart from implementing solutions like FSCM and HRMS, we are looking at implementation of SMART CCTV surveillance system across campuses, network and servers refreshment across some. We are planning to upgrade our communication system and migrating most of the applications on Cloud. We will be deploying innovative technologies like SMART Classroom setup with future technology and 3D Printing.”

Factors like cost, valuation, business outcome and sustainability over a long duration will be the ruling factors when enterprises acquire technology in future. Anil Porter states, “Long term decisions are driven by environments that businesses operate in. We keep on re-innovating, realigning and not only on the surface level but going down to level B, thus creating a strategy for the next 3 or 4 years.” On acquisitions on a personal level, Anil shed some light on plans for 2017, “We have a Big Data project in the pipelines which will be a very innovative development that is expected to revolutionize the B2C market.”

Summing up, a CIO in today’s IT landscape must adopt a need based approach to his acquisition needs and create fresh approaches when deploying new technologies and tools. The approach should be synchronized to the demands and expected results from the technology deployment to the organization. The evolution of a CIO from the IT decision maker to the enterprise IT decision maker is crucial for any organization to succeed in its technology acquisitions thereby growing business and catalyzing innovation.

By: Chitresh Sehgal

csehgal@accentinfomedia.com

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