*By Edenize Maron
Investments in new technologies are one of the most relevant business topics today, in the context of digital transformation, which increasingly puts pressure on companies to seek better margins and differentiated user experience initiatives. Good investments can be true game changers for organizations, bringing benefits such as improved operational efficiency and productivity, development of new business models, agility in data analysis and strategic decision-making, etc. All of this culminates in a significant improvement in customer experience, greater flexibility and adaptability to market changes and, therefore, increased competitiveness with companies in the sector.
With these results in mind, it is no surprise that investing in new technologies is essential for companies to improve their processes and be prepared for future market challenges. However, each organization has its own business objectives and not all investments are necessary or prudent at that specific moment in the organization's life. In this scenario, CPOs play a crucial role in maximizing the ROI of technological investments, as they know that applications in innovation and technology are priorities for organizations, but they need to prove themselves on a daily basis.
This way, C-Levels, including the CPO – or leader of the Purchasing area – will have in-depth knowledge of which business priority they want to achieve and how they can use relevant metrics, such as ROI, to analyze whether that investment should be postponed to another time or not. By aligning technological solutions with business needs, CPOs ensure real and sustainable benefits for their companies.
By understanding the needs of the business – and its customers – the CPO can identify technological solutions that not only meet current requirements but also drive innovation and business competitiveness. It is the role of this executive to have a strategic vision to ensure that the company remains agile and prepared for changes in the market.
In this regard, a recent survey by Rimini Street revealed that only 201% of CFOs are satisfied with the impact that current technology investments are having on their businesses. And, according to the same survey, financial executives are even willing to increase IT budgets, as long as they see ROI and real value from these technological investments for the company. This data highlights the need for a more strategic approach in choosing technological solutions, where the role of the CPO is fundamental.
In other words, it is possible to invest, but before that, it is necessary to prove the value of such investment. After all, the great revolutionary technology of the moment is not always interesting for the business. A few years ago, the cloud was the chosen one, today it is Artificial Intelligence. What will be next? In practice, before allocating millions of your IT budget to the current big news on the market, it is essential to analyze and diagnose the internal needs and processes, in order to understand the real demand and benefits that this innovation can bring.
The CPO must be provocative and questioning
CPOs must always stay ahead of market developments, understanding to what extent the application of such innovation in their own companies makes sense, both for the company and for customers. This requires transparent communication with the organization's leadership, as well as a deep understanding of the market situation and the current needs of their company in relation to the objectives set for that period.
A robust change management and ongoing training plan can ensure the conscious use of new technologies, guaranteeing the ability to manage technological resources efficiently and strategically. However, the CPO has the often thankless job of being the agent of disruption by understanding the needs conveyed by the technology area.
The Procurement area must be an absolute partner of the business, with ROI as a metric to guide and align the other areas. In this way, it becomes a protagonist and also a provocative agent, so that the choice of the most appropriate solution for the business always prevails, a fundamental perspective also in the Technology area. This was what Ubaldo Silva, CPO of CSN, commented at Street Smart 2023, an event by Rimini Street, when he talked about how these two areas are not just for support, but rather protagonists of the business, and the importance of bringing strategy as core to the decisions that the company needs to make.
By mapping technological needs and carrying out a careful analysis of technology investments, it is possible to understand business priorities, assessing the expected return, the costs involved and the associated risks. This assessment should consider not only the financial benefits, but also the operational, strategic and long-term impacts, instigating alternatives and better things that are linked to the company's strategy.
With proper planning and execution, investments in technology will most likely bring significant improvements to the company's performance and competitiveness. However, it is necessary to seek alternatives and challenge your peers in the search for the best options and, consequently, results. Only then will the new technology chosen truly meet expectations and meet the organization's demands and needs. And you, CPO, are you ready to be provocative in your organization?
*By Edenize Maron, CEO, Rimini Street Latin America
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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