The moments that made me
Right tech, right time
Technology and innovation can be a great enabler for growth when harnessed correctly. But avoid falling into a technology trap with our top tips.Download the guide
Technology and innovation investment can be a major boost to growing your business, increasing productivity, enabling better decision making, accelerating growth and levelling the playing field against the big businesses. But it’s vital to integrate it wisely, and properly assess the risks as well as the benefits it offers. Get the inside track from Bina Mehta, Partner at KPMG.
KPMG Enterprise’s Moments That Make You report can guide you through critical growth decisions, including technology and innovation investments.
Having the right technology and or innovation strategy in your business can help to take your business to the next level of growth. Naturally, it follows that failure to embrace and properly integrate new technologies or ideas into your business could see you losing out in the race for sustainable growth and result in wasted investment of funds, people and resource.
Take for example data. Social connectivity is allowing consumers to have instant access to the goods and services they want, wherever they are based in the world. In order to meet these growing demands, business owners need the ability to connect to market information in real time, to connect with their customers virtually and to provide the goods and services that are in demand in real time. The enabler is the technology that can keep pace and make sense of the data in record time.
If your business is not able to manage this data effectively and gain reliable insights quickly, it’s impossible to develop your offering around their needs. Therefore any strategy to become a more customer-centric business stumbles at the first hurdle.
Regardless of the specific context, having technology that facilitates your future ambitions makes for speedier, better decisions.
But it’s tricky. Get it wrong, and you’ll have employees creating time-consuming workarounds for new systems that they can’t use properly, reducing productivity, and you may never see a proper return on your investment.
"Technology that facilitates your future ambitions makes for better quality decisions – the absolute cornerstone of growth."
Bina Mehta, Partner, KPMG
Because technology investment, if not done properly, can be fraught with potential problems, some businesses can have a tendency to make do with what they have, and develop an overly conservative attitude toward investment.
One UK organisation we worked with had steered an exciting growth path to become an international business with a presence in 40 countries, but its 25-year-old finance system was incapable of dealing with multi-currency transactions. So, teams of accountants in each region were producing separate spreadsheets and emailing them to the central finance team for manual consolidation, wastefully allocating resource to the needs of their old finance system, not what was best for an international business.
When businesses finally do decide it’s time to introduce new technology, they’ll often find it’s no longer a one-off capital investment in a license, as used to be the norm, but instead an ongoing subscription with a cloud-based system. Whilst some executive teams may not like the ongoing monthly cost of a subscription over a large capital expenditure, for other businesses, the idea of not needing to make a huge upfront investment in technology that they may use infrequently, can be a positive. It also comes with the tremendous opportunities of cloud technology which, amongst other things, makes managing the risks of online fraud and cyber attacks much easier than older technologies do.
So, when your business is moving forward on technology investment, it’s vital to use that moment wisely to make sure the investment is optimised, and that you have sufficient buy-in from the leadership team. It’s important that you take all of your staff on the journey with you, so that the culture of the business is geared up for change.
Firstly, make sure that senior leaders are aligned on precisely what the investment is meant to achieve. Not only does this help prevent the project from losing focus and becoming difficult to implement; a clear understanding from the top also gives clarity to employees, helping them to adopt the new technology more efficiently.
Secondly, don’t forget that training and employee engagement are just as important as choosing the right technology. Often staff are tasked with driving it forward, despite their ongoing responsibilities for business continuity and stability. Businesses struggle when they fail to adapt to new ways of working offered by a new system, with employees continuing to perform procedures in the old way, simply because they don’t understand the system and lack the support they need to use it properly.
''Pursuing innovation is not just about allocating resources, but also about changing attitudes within the company.''
Bina Mehta, Partner, KPMG
In most cases, renewing or replacing front-office or back-office technology will be funded from within the business, but if it is a major investment that’s needed – or if you are seeking to invest more broadly in large scale innovation and Research and Development (R&D) projects to catalyse growth – you’ll usually require some outside investment. But the good news is that there are many government incentives available when you’re looking to make your business more productive with technology or innovation.
We look at several of these in our guide, but three in particular are worthy of mention here:
Finally, if you’re paying for employee training that’s wholly and exclusively for the benefit of the trade, it can be offset against taxable profits. The value of this shouldn’t be underestimated when you’re nurturing a culture of growth and innovation.
Businesses have a number of technologies at their disposal today that will help increase productivity, level the playing field by lowering the barrier to entry and make scalability more achievable.
For more on investing in innovation and technology, and many other aspects of growing a private business, download our Moments That Make You guide.