Knowledge and Insights
When your organization is looking at new technology, it’s easy to get caught in the weeds of evaluation, weighing pros and cons, testing vendors, and more. It’s an arduous process and, with the tech stack of an average business growing each quarter, one that won’t go away.
The pandemic accelerated adoption of business technologies, some of which were net positive. That trend has continued. In 2023, researchers estimate that 90% of worldwide organizations are investing in digital tools.
Any size organization is at a risk when it comes to evaluating technology needs the right way. Failure is possible on numerous fronts, from understanding the technology itself to knowing how the technology will integrate with current systems and operations.
How can your organization understand its needs and assemble the right tech stack to strategically advance? Let’s explore.
DON’T FALL FOR THE DEMO
First and foremost, executive leaders must understand the functionality of a product or service to make an informed purchasing decision.
There can be a misfit from the outset when leaders only see the controlled environment of a tech demo.
While a piece of software might seem perfect during a sales demonstration, in a real-life scenario it can fail to meet muster. Interoperability is a very complex assignment, and even highly skilled technology professionals grapple with the ongoing need for custom integrations and more.
Instead of going with the best pitch, organizational leaders need to analyze each potential product and weigh it against specific business needs and their unique operating environment.
Just because a new technology seems, at first glance, to be more efficient at solving a specific problem doesn’t mean it’s fit for company-wide integration. What’s more, your operational departments might not have the capacity to effectively execute tech changes.
Instead of just implementing new tech, organizations should review their existing tech stack and develop processes to properly evaluate new technologies, including measuring their potential ROI.
EVALUATING A TECH STACK
By 2026, global digital transformation spending is forecast to reach $3.4 trillion.
Whether it’s implementing cloud computing or AI, companies are chomping at the bit to adapt and evolve. There is a compelling competitive impetus to do so. But instead of focusing on quickly integrating these new technologies, organizations should consider how new product adoption fits into a holistic growth plan.
To do that, organizations can conduct a tech stack analysis or process efficiency study.
During this type of analysis, leadership can look at what manual processes could improve through automation as well as how new technology can make their process and throughput more efficient and effective.
To find the right suppliers and tools, they should engage with vendors and learn about what technologies work for them. It’s a worthwhile investment to travel to trade associations where vendors exhibit their products and where teams can build valuable relationships with potential vendors and suppliers.
They might also engage with competitors, where there is a collaborative environment, and learn about solutions that might be a good fit. Just keep in mind: what works for one organization may not be effective for another.
Checking vendor references is another great way to evaluate a technology. Ask about what works and what doesn’t — this can paint a picture of how that technology might operate in your business environment. Also, understanding how an organization might do it differently in hindsight will provide even more insight.
Self-evaluation can provide some helpful preliminary results. Asking a technology vendor for a free trial period to test out the functionality on your own may also help to identify any potential issues before purchasing and implementing a new technology. A third-party IT audit can bring even more transparency to tech management operations.
THE POWER OF A THIRD-PARTY IT AUDIT
If a business struggles to make sense of its technology management efforts, a third-party IT audit can provide valuable insights.
Through information technology audits or even a SOC audit, leadership may better understand how company policies, procedures and technologies play a role in efforts like data governance and protection.
These third-party evaluations focus on testing the systems to find errors and deviations based on testing a sample of key controls and transactions within the systems.
UNDERSTAND THE PROCESS, UNLOCK GREATER RESULTS
Having a process around how your organization will use emerging technology is essential.
All stakeholders must understand the importance of change and learn how to integrate new tools into everyday operations for better outcomes.
While adopting new technologies can have many benefits, there is no denying the amount of effort that goes into these kinds of integrations.
Remember that the decision to be weighed is not only about implementing a system. There will also be change management, staff training, and ongoing upskilling and engagement. Another thing to consider is developing a formal process around how the technology should be used to help ensure users are utilizing the system properly. All of these efforts should be led by a champion, who will be the person responsible for the rollout and implementation of the new technology.
PUTTING IT IN PRACTICE
While new technologies can streamline operations, organizations should proceed with caution and consider the factors mentioned above before making a final decision.
It’s not enough to bolt in the latest and greatest tech at every opportunity. In fact, that strategy can lead to inefficiency, stunted productivity, and expensive experiments. Rather, an organization should focus on understanding its needs and how the new technology will fit into their current processes and operations.
Whatever your ambition, Mercadien is your partner in growing your organization.
From traditional audit and assurance services to outsourced CFO advisory services, our mission is to help organizations anticipate and embrace change to innovate and evolve while staying true to our strong foundational values of leading with passion and commitment.
For more information on how Mercadien services can benefit your organization, connect with our team today.
DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice, and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.