Ensuring IT investment drives customer value – 4 questions to ask yourself

by Samit Chandra

To build an enhanced customer experience, business leaders are increasingly looking to organisational transformation enabled by technology. However, while enterprise software has advanced in terms of connectivity, mobility, productivity and business intelligence, legacy systems still hold many organisations back. How can enterprises overcome this challenge? The answer lies conducting a deep-dive diagnostic of the current state technology landscape to strategically plan for future IT investment.

When it comes to enterprises and technology success, the numbers paint a bleak picture. This is despite – or perhaps due to – rapid technology evolution. While 7 in 10 organisations are shifting IT’s role from a technology-providing cost centre to a value-based service brokerage, more than half of IT leaders say legacy systems present a major obstacle to achieving the organisation’s strategic objectives. Furthermore, IT departments in many enterprises are underutilised, spending an average of 54% of their time ‘keeping the lights on’ rather than innovating or transforming.1

Heads in the cloud

With a growing need for a flexible work environment and increasingly tech savvy customer demands, most business divisions opt to use cloud computing services. While this may seem to be an easy way to connect staff across multiple work settings, it can create further challenges for IT. This is because as the technology landscape increases in complexity, there is a greater need for an integrated environment which provides consistency and easy access to information for quick, well-informed decision making.

Current state technology diagnostics

To develop a future state technology strategy which simplifies and rationalises your organisation’s technology landscape, it is important to understand the IT financial health of your business.

Strategic planning for IT investment must start with a deep-dive diagnostic of your business’ current state landscape. From our work assisting clients with customer-driven implementation and adoption of technology, Blackdot has identified 4 key questions organisations should ask themselves to enable business capabilities and create value through a current state technology diagnostic.

1. How well does the technology support your customer journey?

Enterprise technology can hinder rather than help your customers, especially if implemented in the wrong way. To spot areas of strength and weakness, a functional fit diagnostic allows organisations to generate a ‘heat map’ of technology capabilities that enable employee and customer journeys. Make sure you include how the current technology landscape facilitates business processes when completing this diagnostic.

The analysis from this fit diagnostic will help you understand the impact of technology on business value within each capability area. The customer experience itself will vary from case-to-case. For example, the figure below measures the technology capability across different parts of the customer journey for one organisation. In this case, improvements are required to better hold the customer’s attention during the decision-making process.

CUSTOMER EXPERIENCE VARIES BASED ON TECHNOLOGY CAPABILITY
Customer-Journey-Diagram.jpg

2. How does financial management of your IT systems benefit the customer?

Finance and IT departments tend to have differing views about how technology investment should play out within the firm. The challenge of bridging this gap is caused by pay-as-you-go pricing and subscription models behind certain products – and compounded by the resulting capital expense versus operation expense argument.

An IT systems financial diagnostic will provide insights around the value of applications, IT spend and operational spend across both business and IT. It will also compare these values against spend categories in the financial ledger. Both these areas will ultimately support future technology decision-making, providing improved employee and customer experience.

3. How effective are your applications at providing quality consumer insights?

Unfortunately, business leaders often make technology choices for reasons other than business alignment. An application fit diagnostic provides an overview of how well each application supports business capabilities, processes and data by analysing:

  • Sales and marketing functions supported by technology platforms, their individual modules and the health of the data across these platforms
  • The functional, technical and data health of current applications, and the readiness of each application for anticipated future growth

Analysis from the application fit diagnostic is a window on an organisation’s current technology landscape and can help in defining the future technology solution.

The figure below examines customer data fitness in an example enterprise, where each point represents an individual system database. It shows that, in order to support the business’ future aspirations, data cannot merely be of good quality – it also has to be complete.

CUSTOMER DATA FIT
Customer-Data-Diagram.jpg
4. How well are you managing operational and system support to minimise customer risks?

As customer data steadily moves onto the cloud, security, regulatory and compliance risks continue to rise for enterprises collating and using that data. This is further compounded due to technology landscape complexity, where internal IT support is expected to maintain legacy systems while bringing in newer technology solutions.

An operational and support risk analysis provides insights into business continuity and disaster recovery risk as well as regulatory, compliance and security risks. The diagnostic will help develop an IT strategy which reduces IT support costs and minimises risk exposure for customer-facing applications in the digital age.

The figure below examines IT support fitness for future readiness in an example organisation, where each point represents an individual system supported within the enterprise.

POOR SUPPORT QUALITY DELIVERED AT A HIGHER COST
Poor-Support-Diagram.jpg
The more you know

By answering these 4 questions, organisations will be able to develop an effective IT investment strategy which prioritises digital transformation initiatives, reduces costs, and minimises risks to drive customer value. Knowledge is power, especially when it comes to making smart transformation decisions relating to your technology landscape that provide flexibility and agility for evolving businesses.

For further information on navigating legacy data, infrastructure and people constraints, read our 'Implementing & Adopting New Technology' whitepaper


Sources:
1 Salesforce Research ‘State of IT’ report 2017