Fighting the Siren Song of Easy Technology Choices

Image of three men running towards a dangling apple, unaware that the cliff ends

In Oscar Wilde’s Lady Windermere’s Fan, the playfully wicked character Lord Darlington notes: “I can resist everything except temptation.” Darlington, of course, wasn’t talking about management decisions, but his self-proclaimed inability to resist things that attract him is shared by too many corporate executives who succumb to temptation at five major decision points.

Buying a high-tech solution that appears to quickly address an identified need or problem is understandably tempting, especially during the COVID-19 pandemic, which has everyone feeling stuck in firefighting mode. So why resist? In short, the attractive easy out rarely pays off in the long run, and the difference between the value gained by investing in less-than-ideal solutions and the potential value that could have been realized by making better choices really adds up.

With all the challenges companies face today, it has never been more important for management to resist tempting but ultimately lower-value IT investments. In fact, according to our research, the ability to do this is a hallmark of higher-performing companies.

While conducting research for Your Legacy or Your Legend: A CEO’s guide to getting the most out of new technologies, Accenture surveyed more than 8,300 C-level executives, including 885 CEOs, across 20 industries and 20 countries, and one of our key findings was that revenue growth was faster at companies that had resisted the temptation of lower-value options and made tougher choices when faced with five common IT investment questions. These companies achieved an average revenue growth rate of 9 per cent annually compared to an average rate of 6 per cent a year for our sample as a whole. This article examines the temptations resisted by the high performers, and outlines what they chose to do instead.

IT INVESTMENT QUESTION 1: How extensively should we apply new technologies to organizational processes? The temptation here is to limit the application of new technologies to quick-payoff, high-visibility processes.

Companies naturally want to see tangible progress from their investments. As a result, many limit their investment in new technologies to marketing and sales processes. They may see these areas as most ready for new technologies or of promising the biggest bang for their buck. An AI-powered chatbot, for example, offers visible support to customers.

No organization has unlimited resources, so it’s easy to understand why decision makers limit their investments. But this reasonable option isn’t the best way forward.

The higher-value choice: The outperformers in our study reimagine business processes across the company, not just in customer-facing areas. They ask how a new technology can be applied to many processes and target up to three times as many as lower performers.

The technologies associated with artificial intelligence, for example, bring one key benefit to business processes: the ability to forecast. Singapore-based DBS Bank recognizes this and is using AI to understand and meet new customer needs. It built an internal self-service platform that lets hundreds of employees experiment and build AI tools for their specific processes. DBS uses artificial intelligence to predict customer risk for criminal activity and plans also to use it to innovate in the area of compliance.

IT INVESTMENT QUESTION 2: How should we adapt IT to changing business needs? The temptation here is to patch or “lift-and-shift” legacy systems.

Executives want IT systems that can adapt as the business changes. And here they often resort to a tempting two-for-one deal. As a short-term fix, patching old systems makes sense to many executives. While patching works in the moment, however, it treats a symptom rather than the underlying problem. Many companies also race to lift-and-shift their applications, as is, from legacy systems to the cloud, hoping for cost benefits. These reasonable choices miss the point.

The higher-value choice: Higher-performing companies see the cloud not simply as a data centre but as a catalyst for innovation. But making that vision a reality does not lend itself to simple solutions. Leaders approach the transition to the cloud with a careful application-by-application assessment. They also make their architecture modular—easy to adapt to new conditions and enable incremental improvements.

How, in practice, does the move to the cloud help fuel innovation? In the decade leading up to the COVID-19 crisis, DBS invested heavily in modernizing its IT infrastructure to make it scalable—capable of supporting spikes and downturns in resource usage as needed—and modular—capable of adapting both hardware and software to business needs. When the crisis hit and some employees tested positive, those investments paid off. It responded with agility: combining data from multiple sources, it was able to perform contact-tracing within days. Furthermore, DBS successfully recreated the traditional in-person and relationship-based banking processes in a virtual environment within weeks.

IT INVESTMENT QUESTION 3: How should we sequence the adoption of new technologies? The temptation here is to experiment with “hot” technologies in isolation.

When executives consider the potential value of a new technology, they want to get the timing right. So, they begin by testing and experimenting—to see what works. This is not just tempting, it’s normal—standard operating procedure today, whether the technology involves AI, blockchain, big data, or anything else. But they often get stuck at the experimentation phase, because they haven’t considered how the new technology fits with the organization’s current capabilities.

The higher-value choice: Higher-performing companies identify foundational technologies and adopt them based on their potential effect on the entire organization. For example, they don’t adopt AI until they have put in place the complementary technologies they will need, such as big data and the cloud. Deep-learning algorithms, the most popular form of machine learning today, need both lots of data and highly specific and powerful computational machinery. Successful companies know this and plan the adoption and gradual scaling of AI across the company accordingly.

McDonald’s made two significant technology acquisitions in 2019. Both are helping the company bring a more customized experience to its customers. One technology can change McDonald’s drive-through menu based on the time of day, weather, and traffic conditions. The other uses conversational AI to make each interaction with a customer personal. McDonald’s already had access to huge amounts of customer and other data before making these AI acquisitions—a critical factor in the sequencing of these investments.

“Most periodic classroom training, even when semi-customized, tends to get people ready for the past rather than the future.”

IT INVESTMENT QUESTION 4: How do we enable our workforce to use new technologies and improve their performance? The temptation here is to rely on standard classroom training programs.

Successful technology investment depends on human–machine interaction. Companies understand the need to provide training but many fall for the temptation of standardized classroom training. It seems to make sense as the fastest way to get everyone moving in the same direction. But most periodic classroom training, even when semi-customized, tends to get people ready for the past rather than the future. Today’s companies need to design continuous customized training programs to train their workforce for tomorrow’s systems and work environment.

The higher-value choice: Leading companies take a far more flexible and future-focused approach. They use experiential learning in combination with intelligent technologies such as AI, analytics, and machine learning to predict and match worker training with required job skills and even rewrite job descriptions. They also actively use technologies to make work more engaging and to train employees with special abilities.

CVS Health has put this approach into practice by creating Regional Learning Centers in Boston, New York, Cleveland, and Washington, D.C. These are hubs for job training as well as a pipeline for new employees, including people with limited work experience and special needs. Each Center contains classrooms, office space, and a full mock pharmacy. They are staffed by at least a full-time manager and a full-time coordinator who manage relationships with internal and external partners—government agencies, educational institutions, and community organizations.

Retention rates are higher for CVS Health’s “health colleagues” who have participated in a Regional Learning Center program than they are for other employees. Not only is CVS inclusive in its training, it is also future-focused. Recognizing that an algorithm-driven workplace is the future, it has developed personalized digital training and real-world simulation programs to help its pharmacy technicians become more tech-savvy and data-literate.

Technology investments in a future-focused hiring and training strategy have also helped CVS rise to the occasion during the COVID-19 pandemic. When demand for new health services dramatically increased, CVS was able to successfully scale up drive-through testing at 1,000 locations across the United States—much more successfully than its peers.

IT INVESTMENT QUESTION 5: How do we align technology strategy and business strategy? The temptation here is to move responsibility for IT to the business side.

It makes sense, in theory, to put business leaders in charge of IT. They know the business, and it seems logical to think that they would be able to quickly identify and fix pain points connected with technology. It’s a tempting choice!

But it also creates and perpetuates “shadow IT,” which in turn generates a range of problems—systems that don’t operate with each other, information stuck in silos, and pilots that cannot be scaled across businesses. As systems become increasingly customized, these problems only grow over time.

The higher-value choice: Leaders embrace systems that break down boundaries constraining data, infrastructure, and applications. They also create adaptable systems that can learn from experience. And they make these systems “radically human”—meaning people can interact with them easily, and the systems adapt to the people using them. The result: enterprise systems that provide scalability and strategic agility.

McDonald’s is betting big on foundational technologies such as AI and machine learning as it rethinks its interactions with customers. DBS is reimagining processes across the organization and creating business agility through technology. And, with its future-focused training and hiring programs, CVS Health is making sure that its employees, and the company, can respond successfully to a rapidly changing business environment.

Most companies have yielded to the temptations described above in the past, but now is the time to resist. After all, no matter their industry or business model, the technology decisions that CEOs make today will help determine their financial success in the future.

Our current challenges are an opportunity to reflect, so while standing firm against temptation, look closely at your organization and its enterprise systems. Consider scale, agility, and resilience. And after taking stock, reconnect your investments to the business by making decisions that will prove most valuable over time.

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