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3 reasons why technological investments fail and how to face them

Published: 2019-08-01

A Deloitte report published in March showed that a moderate budget spent by companies on technology investments increased in 2018 by 25 per cent. Almost by half has increased the number of companies which have started large investments in that area [1]. The digital transformation taking place before our own eyes makes the investors implement digital solutions. Those allow for a dynamic development of business – if they are introduced in a proper way and with support of an experienced technological partner. Still, those requirements are not always met.

The process of a digital transformation of a business is connected to many challenges. As much as 25 per cent of technological investments are a failure, as research shows, and the next 20 to 25 per cent does not bring the expected profit [2].

Meanwhile, a correct implementation of a specific technological solution always pays off. As much as 84 per cent of companies admit that they experienced a rise in income as a result of an investment in innovation.

So, where is the line between a failed implementation, one that causes losses, and a technological investment that brings real profit to an organization?

3 reasons

There are many reasons why investments in technological solutions sometimes fail. Among them one can mention for example not giving a large enough priority to the process of the organization’s digital transformation and treating it without due attention.

The cause of a failure very often lies in the budget, which is too low in comparison to the level of the planned implementation’s sophistication. According to one research, over a half (51 per cent) of business representatives in a decision-making position agrees that budgetary restrictions are a reason for failure in case of such projects.

The issue doesn’t become easier due to the fact that when designing a solution, one finds it difficult to understand its full functionality, and therefore see it through the eyes of an end customer, taking his needs into consideration.

Another obstacle is the lack of qualified specialists, who are able to properly conduct the transformation process. It can mean choosing a wrong technological partner, who does not have the required experience in the area of innovation implementation. More and more organizations are nowadays searching for innovative ideas on the outside, for example by means of start-up accelerators and incubators. It’s understandable – big companies that have a rigid hierarchy and a strictly defined scope of tasks do not encourage their workers to generate ideas. Thus, creativity is at a premium.

However, a suitable technological partner can conduct the implementation process in such a way that it engages the employees of the client company already at the stage of designing a solution, during the workshops designed for generating ideas. The use of internal resources increases the feeling of satisfaction with the implementation and makes sure that it is maximally suited to the business needs of a company and its end customers.

Could it be implemented?

Could those obstacles be overcome? Yes. There’s one solution that allows people to face the aforementioned challenges – it’s to work on the basis of a proof of concept (PoC) before implementing the whole solution.

Proof of concept is a trial version of a solution we’re planning to implement. PoC allows us to estimate how feasible the implementation of an idea is, even in case of the boldest ones. Working with PoC reduces the costs of project implementation, because it allows us to verify the customer’s needs on a regular basis and modify the created solution on a very early stage.

Moreover, it allows us to better understand the functionality of a proposed implementation. The fact that PoC is realized by a capable technological partner provides an organization with a much needed support on every stage of an implementation.

In Cybercom, we test new ideas based on proof of concept in a specially designed area called the Innovation Zone. We invite there our customers, so together we can create operational prototypes of solutions to the problems they report.

The benefits of such a work model are also noticed by those customers, to whom a visit to our Innovation Zone is just an introduction to comprehensive workshops. In turn, those workshops lead to creation of solutions suiting their needs, therefore bringing them that much closer to a transition through the process of digital transformation.

[1] https://www.forbes.com/sites/bernardmarr/2019/03/13/despite-massive-investments-in-ai-and-digital-transformation-survey-finds-poor-results/#222431b42686 External link.; https://www.zdnet.com/article/organizations-are-spending-more-on-digital-transformation-but-wheres-the-impact/ External link.

[2] https://www.forbes.com/sites/bernardmarr/2016/09/13/are-these-the-real-reasons-why-tech-projects-fail/#687596317320 External link.


Jan Matulewicz

Managing Director Cybercom Poland

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