Planning technology investments is a complicated effort requiring expertise in business process, security, financial modeling , customer privacy, strategic alignment and technical fit. Additionally, replacing existing systems can be more complicated than building something net-new; often requiring an added understanding on how the business utilizes the existing technology, knowing what functionality you want to keep and the pieces you want to throw away. Further complicating any technology purchase is the amount of choice. Gone are the days where one or two players operate in a niche market. We are now seeing several companies offering similar technology products in just about all imaginable areas.
With technology, our dreams can sometimes become reality. Simply look at how deeply we have connected the world in the last 25 years and you will see how far we have come. Our acceleration of knowledge and technology is unprecedented.
However, it is those dreams that can sometimes blind us to the actual delivered value of a technology investment. We see it all the time, technology comically going bad — automated restaurant kitchen systems that are insanely unreliable, food delivery robots stuck in the bushes, and my personal favorite, a shelf stocking robot losing it’s way and “restocking” the parking lot. I’m not saying we shouldn’t experiment, quite the contrary. I’m saying let’s experiment with purpose and when we choose to invest in technology for those experiments let’s do so under guidance, guardrails, and a bit of the scientific method.
Why We Invest in Technology?
So why do we do it? Why do we take investment risk on what always seems to be questionable technology?
Biologically speaking, our opportunistic nature stands in stark contrast to the specialization observed in the majority of the animal kingdom. Homo Sapiens are opportunists not specialist like many species. We are genetically driven to find opportunities and exploit those opportunities and technology simply offers us a way to compete more effectively.
From an operational perspective we look to technology to make life more comfortable thus automating things that would sap our time; think how easy it is to heat our homes now versus in the early 19th century or how Napoleon gathered information on the battlefield. Making it easier to perform normal activities frees our brain to concentrate on other things.
And for those who directly work in commerce, technology affords us new markets, easier ways to procure global goods, and a million ways to engage customers for purchase. One story that comes to mind is how Dutch merchants built the Fluyt ship to compete with the Spanish and English Galleon.
The Fluyt was 50 feet shorter but wider, which saved on taxes because cargo vessels at that time were taxed not on cargo amount but by ship length. It also had fewer cannon and could be crewed with just 30 people. The Fluyt was built for commerce not war- a specialized technology designed to procure global goods as cheaply as possible. Here’s a fun table showing how the Dutch used innovation and technology to outcompete the English and Spanish with trade. I love the starkness of this chart.
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Our motivations for technology procurement, now versus in the past, remain the same. We purchase technology to free our minds from redundant activities, increase opportunity, and to compete.
A New Paradigm of Sorts
In todays world, I can go to the supermarket and purchase 8 different kinds of apples. The same is true for software, hardware, and equipment. What struck me recently is just how much variety of software technology is out there in the wild. Where once there was one solution now there are 10 — a fact that is true for larger enterprise ERP systems as well. We finally have choice and with choice comes uncertainty and anxiety.
Adding to the frustration of purchasing uncertainty are the latest emerging technologies — automation, artificial intelligence, robotics, etc. Nearly all industry experts concur that we are at the vanguard of a new technological revolution. Any consideration for a technology purchase must account for a vendor’s commitment to these technologies and how it aligns with the business’s capacity to enhance its capabilities. You don’t want to pick a loser especially if your return on investment is realized after several years.
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How to Purchase Technology in Today’s World
To understand what technology should be purchased is to have clarity on both your current and future needs. Here’s a look at our (Frame and Flight) methodology and how we support some of the worlds largest companies through their technology investment decisions.
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As we engage vendors for technology investments in 2024, it’s clear that while aiming for innovation and efficiency may be great, there are other hurdles we need to think about. The charm of progress can hide real-world results, like the tech blunders we’ve all seen — nothing is funnier and more sobering to a CTO than a robot, designed to perform a basic function, fails in a spectacular way. We all want to seize opportunities, stay competitive, make things smoother, and discover new possibilities.
However, there’s a twist — the sheer number of choices and the rise of emerging technologies make purchasing decisions complicated. In this evolving scene, it’s key to be purposeful and guided in our experiments, throwing in guardrails and the scientific method. The solve is to sync technology procurement with what we need now and what we’ll need down the road, while making sure our vendors are along for the ride.