Tech Leaders: Reinvigorate Tech Capability to Create Sustainable GrowthTech Leaders: Reinvigorate Tech Capability to Create Sustainable Growth
Technology executives must position their teams to drive growth by continually innovating, improving experiences, and fostering competitive advantage.
October 25, 2023
Challenging economic signals continue in most sectors and across most markets. Policymakers are keeping inflation rates stubbornly high, inching the cost of capital to levels that threaten long-term liquidity. This indicates the growing potential of systemic demand destruction and increased prospects for a broader economic downturn in the next 12 months.
But the cost of capital isn’t the only challenge.
Payroll employment rose to 336,000 in September, blowing out Wall Street estimates by nearly double. In August, the labor market experienced a 9.6 million increase in job openings as hires and total separations remained unchanged. With the backdrop of unemployment remaining steady at below 4%, it is clear that the cost of labor, not just capital, must be at the forefront of any tech strategy.
Tech Leaders Can Turn Budget Growth Into Company Growth
Despite the tightening of labor and capital markets, 81% of US enterprise technology decision-makers anticipate their organization’s technology investment increasing over the next 12 months, according to Forrester. Furthermore, 45% of technology decision-makers in data-related functions at US enterprises anticipate their organization’s budget for AI capabilities increasing by 5% or more in the next 12 months. This illuminates the opportunity that tech executives have to turn budget growth into company growth, positioning investments to augment the broader risk of higher capital and wage costs that their organizations are facing.
To do so, investment strategies must focus on threading tech capability tightly through customer, employee, and partner journeys. To think of these journeys as separate and distinct only intensifies unproductive performance, threatening operation cohesion and strategic continuity. Alignment to this notion means scoping and scaling tech investments that improve capability impact and moving the operating direction toward revenue-generating activities, avoiding sprawl that increases complexity.
What Actions Are Needed To Drive Successful Business Outcomes in 2024?
In order to fuel business growth, tech leaders should leverage the following steps to move their organization’s effective use of tech in a single, competent motion:
Enable growth by expanding and extending market frontiers. Technology facilitates connectivity and access to new and larger markets. This grants businesses broader market access that reduces dependence on a single market while also diversifying the customer base. Invest in multichannel platforms, personalized digital experiences, digital marketing, and digital payment systems with the intent to extend reach beyond current boundaries. This decreases the cost intensity required that would otherwise be a barrier to entry into other markets.
Collaboratively build products and platforms to create growth. Technology allows businesses to understand and cater to evolving customer needs, demonstrating exceptional customer service, and generating interactions to grow customer loyalty. While technology leaders don’t own product development or customer engagement, they bring innovation and new solutions to product owners and other business roles to create new growth streams that didn’t exist before. As such, tech leaders should unite product owners to use one approach to hosting, identity management, interface standards, and product development.
Emphasize game-changing emerging technologies like AI to amplify long-term growth. The key to long-term growth is optimization. Invest in emerging technologies like AI, machine learning, and data analytics to further insights, identify market trends, and develop new products or services. Integrate AI into existing systems and workflows seamlessly without disrupting existing operations. Leverage the knowledge and experience embedded within value networks to evaluate where AI can amplify growth. This increases the productivity of financial performance as growth is pursued.
Use AI to enhance employee autonomy and expand capacity. AI technology offers businesses the ability to automate processes, expand operational capacity, and improve productivity. Prioritize investments that mature and advance software to accomplish tasks more quickly and accurately, reducing manual dependencies while increasing employee engagement and creative problem-solving skills. This slows the resources required to grow.
Activate partnerships to be a force multiplier. Technology can position businesses to respond quickly to market changes, adapting strategies within and between value networks. Make investments that leverage the total experience of internal communities of practice and external partnerships into cocreation opportunities. This drops the cost of operations, as access to assets is cheaper than ownership of assets.
To learn more about how technology executives should plan for business success in the year ahead, download a complimentary copy of Forrester’s Planning Guide 2024: Technology Executives.
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