Everyone knows the old saw, “You have to spend money to make money.” But does that cliché still ring true when uncertainty continues to make the world economy fluctuate and business expectations to shrink? Surprisingly, yes.
Recent research shows that it may be wiser for the C-suite to continue a bullish approach to technology investments throughout the rest of this challenging year and into 2021.
A survey of 600 C-level executives by ESI ThoughtLab and ServiceNow found that companies that outperform in revenue growth, decision making, and, yes, cost-savings, are leaders in investing in a digital enterprise platform. They invest about twice the average in absolute terms on digital enterprise platforms.
But that’s not it.
They also invest more in a whole portfolio of digital technologies that both provide a steady foundation for platforms, and opportunities for innovation.
On average, these digital leaders make moderate to very high levels of investment in cybersecurity (98% vs 74% of followers), cloud technology (91% vs 78%), data management (89% vs 64%), robotic process automation (89% vs 63%), artificial intelligence (86% vs. 53%), device management (78% vs 42%), and business applications (77% vs 35%). They are also far ahead of followers in investing at high levels in applications management (73% vs 27%), open platforms or API architectures (73% vs 29%), and blockchain technology (56% vs 18%).
They report the results are worth the price tag.
A much higher proportion of the leader group are enjoying high or very high returns from their technology investments. For example, there is a 30 percentage point gap between the number of follower and leader organizations who report a very high return on investments in RPA. Leaders also gain much higher dividends on their investments in AI, IoT, business applications, open platforms, and applications management. Leaders are even seeing higher returns on cloud technology relative to their investment.
The lesson for business executives is clear: the return on investment in enterprise platforms improves with maturity, and drops for digital laggards.