Over the years, I’ve spoken with countless executives and students about the promise and perils of emerging business technologies. The sessions always begin with: “what are the operational and strategic problems you want to solve?” The technologies represent a growing toolbox of opportunities to solve the problems – though sometimes there’s not an obvious match between problems and emerging technologies – which is fine.
Executives need to stay abreast of emerging business technologies for obvious reasons: they can save money, make money and keep their companies competitive with technology, especially with “disruptive” technology (which will become tomorrow’s operational technology). At the same time, they can also inflict serious pain on their companies if they make the wrong technology decisions, which was not the case thirty years ago (when technology did not form the backbone of 21st century strategies and tactics). Business technology stakes have never been higher.
But what do executives need to know?
At the highest level, they need to know what the macro technology trends are. Slightly lower, they need to know what the technology toolboxes are. They also need to know about development and adoption trends. Most importantly, they need to connect technologies with the operational and strategic business processes they want – and often need – to improve (or eliminate). But let’s cut to the chase. They need answers to these three questions:
- “How can the technologies save me money?”
- “How can they make me money?”
- “How can they help me beat my competition?”
Step 1 – Business Processes & Models
Executives need to task their teams to model business processes (and whole business models) before thinking about technology investments. This requires investments in business process modeling (BPM)and ultimately robotic process automation (RPA). If the team cannot produce an inventory of business processes, executives will never know how and where to even think about the potential of emerging technologies. Said differently, without BPM and RPA, they will invest in technologies in search of problems, which is one of the least effective ways to invest in technology.
Step 2 – Macro Technology Trends
No company can survive or grow without a wide and deep understanding of digital technology. This reality translates into a set of general acquisition and deployment principles that all executives need to understand.
For example, we now rent – and avoid buying – hardware, software and storage. We use smaller and smarter devices to connect to the Web. We track customers. We understand what they like and dislike – in real-time. We innovate. We crowdsource. We optimize supply chains. Just about everything is – or soon will be – connected to the Internet. Think homes and Nest. Think Fitbit. Think smart refrigerators. Technology enables all this and more.
There are emerging technologies changing the way we develop products, communicate, collaborate, serve customers, and deploy technology. Executives who ignore analytics, social media, cloud computing, automated reasoning and real-time mobility – among lots of other technologies and technology-inspired business models – are at competitive risk. Executives must know this.
While the impact of the Internet in the 1990s was amazing and persistent, the technologies discussed here – all enabled, delivered and amplified by the Internet – are far more impactful because of how they integrate and cumulate – and how they directly affect business strategy, operations and performance. Intelligent systems can overlay onto traditional customer relationship management (CRM) systems. The same is true of ERP systems.
Digital technologies also offer combinatorial opportunities, even though they all have their own independent ecosystems, champions and life cycles. While the technologies are powerful in their own right, when taken together they can completely change the competitive game for a great many companies. Uber, for example, combines location awareness, real-time analytics, cashless payment and customer relationship management all in one platform. Uber is already a logistics company that moves anything that needs to be moved quickly and cost-effectively, like food with Uber Eats. Eventually, the Uber business model will eliminate most if not all of their human drivers.
Operational technology is what most executives think about when they think about business technology, things like devices (smartphones, tablets, laptops, etc.) and software applications (like SAP, Salesforce and Microsoft Office). Operational technology includes applications and processes that directly impact revenue and profitability. Emerging technology can also directly impact revenue and profitability – though most executives have very little understanding of how.
Emerging technologies also impact revenue and profitability. The simple ability to collect payments with smartphones, for example, changes the game for many small and medium-sized businesses. Or the use of location-based services to find customers. Or listening to social media to understand what customers like and dislike.
Executives also need to understand that the pace of digital technology change has dramatically accelerated. Fueled by Moore’s Law, consumerization, globalization and a path-to-personal-wealth-creation that increasingly rewards technology entrepreneurs, digital technology is advancing at an unprecedented rate. The ease of deploying emerging technologies out-of-the-box is growing (principally through cloud delivery). Rather than build-out data centers, deploy enterprise software applications and hire huge teams, companies of all sizes can rapidly pilot and deploy emerging technologies with little or no initial cost via XaaS delivery models. The cost of deploying technology has fallen significantly and shows every sign of falling even more through commoditization and increasingly favorable price/performance ratios (and the availability of cloud-based services) – though it’s still possible to waste tons of money on the wrong technologies targeted at the wrong problems. It happens all the time.
Executives already know that their ability to compete is tied directly to their ability to leverage digital technology generally and individual technologies specifically: the role that digital technology plays in every aspect of business has increased dramatically. Nothing new here.
Finally, executives should understand how difficult it is to recruit and retain technology professionals with emerging technology skills and competencies.
Step 3 – The Emerging Technology Toolbox
Which technologies should executives track?
The short list appears below:
- Robotic process automation
- Cloud computing
- Virtual & augmented reality
- Social media analytics
- The Internet-of-Things
- Artificial intelligence/machine learning
- Augmented analytics
- Cryptocurrency …
Step 4 – Executive Responses
Executives should do the following:
- Demand briefings on the range of technologies impacting their industry, company and competitors.
- Model the TCO and ROI of the technologies.
- Identify – and launch – technology pilots designed to impact specific business processes, products, services and whole business models.
- Profile their emerging technology workforce (and plan to fill the gaps).
- Repeat the process every month.
Step 5 – Get Over “IT”
“IT’s” over. The old days of technology offices in the basement are gone. Technology now powers all business processes and models. If there’s any remaining doubt about the preeminence of technology, executives should describe how their companies could survive without technology and Why A.I. Researchers at Google Got Desks Next to the Boss. Technology no longer just keeps the trains running on time – which it does – it also enables strategic objectives. Most executives know it’s time to invest in technology for operational effectiveness and competitive advantage. Hopefully, this guide helps them improve awareness and pursue productive pilots.