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It’s ineffective to drive a vehicle with a brand-new set of tires that are misaligned. It also seems silly, then, to funnel more money into technology budgets without aligning those investments with business goals.
A vast majority (93%) of organizations are spending more on technology, yet just 27% said their tech is “fully aligned with business goals,” according to a Grant Thornton survey of more than 550 executives.
“Business leaders recognize the need to invest in technology to enhance the customer experience, improve operations, and drive profitability,” Nick Vellani, national managing principal of Grant Thornton’s technology modernization practice, said in the survey report. “But they are competing with their internal technology function’s priorities. These may include infrastructure and application cloud migration, cybersecurity, and data management—all of which are critical to ongoing operations but do not directly align to business priorities.”
Digging in. Respondents most commonly said their firms were increasing technology investments somewhere between 6%–10% this year. But there were some particularly big spenders in the survey cohort: Nearly one in 10 said their firms are upping tech investments by 20% or more.
Business leaders said their organizations plan to shovel the largest share of their tech spending (37%) into platforms such as ERPs and CRMs. Just over a quarter of tech spend (28%) is going to targeted third-party solutions, while 19% is earmarked for custom development with internal resources, and 16% is going toward custom development by third parties.
Does this sound like you? Companies with misaligned technology investments often share common traits, Grant Thornton found. They may be smaller firms that are using outdated systems. They could have made big tech investments without first laying out their business needs. Or they may have purchased multiple systems that aren’t compatible with each other.
Firms shouldn’t sleep on their data quality, either. About a third of respondents said “their data needs improvement to support technology initiatives.” Just 16% said their firms had “excellent” data quality.