Home News Large organisations “risk declining revenues due to fear of disruptive technologies”

Large organisations “risk declining revenues due to fear of disruptive technologies”

by Brian Sims

IT consultancy Coeus Consulting’s latest research reveals that, although the fate of many organisations depends on their ability to implement strategic change and adopt disruptive technologies, a reported lack of business and IT alignment, coupled with a corporate fear of risk, means that they risk losing out on crucial revenues and market share.

Just 21% of those professionals surveyed stated they seek to implement new technology as soon as possible, with some of the main barriers to adoption being fear of disruption to the core business (30%), lack of budget to adopt new technology (21%) and poorly planned adoption strategies (19%).

“While it’s reassuring that organisations are at least attempting to keep up with disruptive technologies, it’s somewhat concerning that they’re not doing more,” asserted Keith Thomas, head of the IT Strategy Practice at Coeus Consulting. “Monitoring advancements is the first step along the road, but only three-in-ten organisations make technology decisions in the Boardroom. With technology now playing a vital role in every industry, organisations need to increase their understanding of technology and be prepared to take more calculated risks in order to reap the benefits and execute successful strategic change.”

Ben Barry, director at Coeus Consulting, added: “Successful implementation rates are low among respondents which could explain these fears, with only 7% noting that all of their organisation’s strategic IT change projects have met initial objectives over the past two years. The good news is that, of those organisations that have a ‘test and learn’ culture in place, and also set objective success or failure criteria for initiatives in advance, almost 60% report that their organisation investigates or adopts a different approach when initiatives don’t meet objective success criteria. Organisations are blinkered to the market and must be willing to tread the fine line between adopting technologies quickly and rushing the process by investing in the wrong technology. Otherwise, they risk being overtaken by their competitors and will see declining revenues.”

Aligned and informed leadership

Keith Thomas added: “Aligned and informed organisational leadership is clearly an issue within organisations where at least some strategic IT change projects haven’t met initial objectives, with just over 70% admitting to business plans changing, senior management not buying into the change or simply not taking enough risks as a reason for failure. This is disconcerting. If those at Board level are failing to see the benefits of strategic IT change, then the implementation, adoption and deployment of new technologies is destined to fail. Businesses need to ensure Board-level understanding of the importance of IT, as well as building stronger strategic IT change capabilities.”

According to Thomas, consumer demand for new and improved offerings, paired with the demand for digitalisation from the business, means that organisations not only need to increase the speed at which they’re doing things, but must also match or stay ahead of the offerings from disruptive and agile competitors.

Seeking to discover how organisations view the next wave of disruptive technology, almost a third (29%) of respondents believe Artificial Intelligence represents the most significant innovation set to impact their industry in the next two years, with data and analytics (18%) next in line. Despite their predictions on the next generation of technology, only 38% of respondents say they operate with dedicated teams monitoring the latest advancements. This suggests that 60% of organisations could be operating with little knowledge of innovations taking place outside their four walls.

Despite the current economic climate, funding seems to be a secondary issue. Last year’s research found that just over six-in-ten (62%) of respondents predicted an increase in the size of their budget for the coming year. In actual fact, only 50% of respondents from the survey this year reported an increase.

However, just over 50% of respondents reported that digital services are being funded from the IT budget in their company, with additional funding also allocated from elsewhere. Indeed, approaching six-in-ten (57%) are anticipating an increase in their budget for the financial year 2019-2020. This indicates that business leaders appreciate the need for IT in their current and future operations to the point of allocating funding, but not always to the point of consistently aligning with their IT counterparts.

Strategic IT change projects

Increasing operational efficiency (49%), customer satisfaction (32%) and increasing revenues/sales (31%) top the list of drivers of strategic IT change projects, in turn demonstrating that expectations around the business value of IT change are not being effectively driven.

Businesses need to recognise the consequences that slowing IT spend – and, ultimately, stagnating progress – could have on their business prospects. Taking unnecessary risks could lead to the downfall of an organisation. In reality, though, spending on technology and taking a ‘fail-fast’ and calculated approach to IT risk is now a necessity.

*To view the full report visit http://coeusconsulting-co-uk-3969064.hs-sites.com/insights/coeus-survey-2019

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