The right IT investments at the right cost could help you to counter the effects of inflation in the long run. Implement the appropriate digital strategy and technologies against economic headwinds and the prospect of a recession to:
- Permanently bring down business expenses
- Enhancing both employee and customer experience
- Take advantage of disruptive developments
- Perform better than rivals during a slump
To be offensive with the investment strategy, there has to be a well-sought-out plan. Below are the ideas that could help you to make an ideal offensive investment strategy.
- Strategic Digital Focus.
Highly effective digital leaders clearly state the breadth of their organization’s digital objectives, outlining how far they want to use digital approaches and technologies to enhance measurable business outcomes.
The most important thing is to distinguish between digital transformation and digital optimization strategies.
Make sure digital initiatives are chosen wisely so the business doesn’t spread its focus and resources too thinly, regardless of the strategic aspirations and related strategic plans. CIOs must invest in four essential, mutually reinforcing capabilities: strategy, governance, architecture, and IT delivery to realize corporate goals.
The maturity level of your IT function in each of the four capabilities can be determined via diagnostic evaluations. Then, based on the enterprise’s ultimate digital ambition, align your goal maturity level and transformation program.
- Decide on the significant digital expenditures
In general, some digital expenditures are probably going to be particularly significant:
- Creating a future vision of the demands of digital services is essential if you don’t want to convince your board that “Competitors out-innovated us with digital products and services.”
- Efficiency and productivity that help speed up and streamline the organization. Businesses that create and implement digital business capabilities and spend ahead of revenue forecasts in areas like data and analytics, cloud computing, security, and other predictive and autonomous capabilities will gain particularly from supply-side shocks and inflation increases.
- Right Resources
Longer term, what is required is a sustainable pipeline for talent development and acquisition, set up to guarantee the correct talent is present at the appropriate time and location. And while the pandemic prompted an abrupt transition in work arrangements, one thing has been constant: To draw in and keep digital talent, the employee value proposition (EVP) must be attractive.
In the long run, you also need to identify the specific talent difficulties of your company to create a strategy and set of measures designed to handle them. The following are crucial components of this future-proofing of the IT workforce:
- Determine and rank the need for digital talent and abilities.
- Create talent-related strategies:
- Recruitment. To make sure you find and employ the best high-potential talent profiles.
- Renewal. To guarantee ongoing worker capability renewal in support of the shifting demands of digital business.
- Retention. To deliver on key factors that influence employee engagement and create a holistic incentives plan to inspire and keep employees over the long term.
Since former employees might rejoin the company in the future or turn into valued customers, partners, or brand ambassadors, efficient offboarding is as important as onboarding new hires.
- Find ways to save money
CIOs will probably be pushed to make immediate cost cuts when approaching costs strategically. They will need to accomplish that with the least amount of harm to the organization’s short-, medium-, and long-term health.
Make sure you are not compelled to merely self-fund digital efforts through cost reductions from other budget areas to prevent underfunding for digital initiatives owing to cost concerns. Digital is not a zero-sum game, and achieving scale through digital efforts takes more substantial investment than that produced by IT budget savings.
- Manage IT Vendors
Vendor talks may become more challenging in an inflationary environment, but technology bids must always be sufficiently detailed to allow CIOs and their teams to disentangle terminology and uncover hidden and omitted expenses. To efficiently evaluate new and renewed acquisitions and negotiate complex negotiations, use tools, and financial models.
As an illustration, Gartner advises using a four-step process to analyze and bargain multiyear software and SaaS deals. They are:
- Engage stakeholders in usage and implementation forecasting.
- To compare multiyear, and prepay possibilities, request vendor pay-as-you-go (PAYG) bids.
- To compare prepay options, compute the net present value (NPV) of PAYG payment streams.
- Utilize models of NPV-to-prepay analysis as leverage to negotiate better terms and prices.
- Make a technology roadmap.
An enterprise’s IT ambitions are explained in a technology roadmap, which serves as a strategic road map for the corporation in achieving its goals. It frequently includes accompanying documentation and visual images that explain how something progresses from its current state to the desired result.
The goal of technology road mapping is straightforward—to foresee technological trends and demands and map your adoption pathway—but the process can be difficult. When mapping emerging technologies, that enterprise architecture (EA) professionals may not be familiar with, it can be particularly difficult.
- By locating templates, taxonomies, and tools that encourage uniformity, effectiveness, and clarity both inside and across them, you may establish a disciplined process for the creation and evolution of roadmaps.
- By customizing roadmaps to a particular audience, you can give stakeholders the appropriate level of detail and generate excitement about the direction.
- To speed up decision-making, maintain traceability across roadmaps, and use business outcome KPIs.
By publishing and actively promoting roadmaps to their intended audience, you may make it easier for people to find and use them, which will increase adoption and utilization.