A survey of more than 500 international C-Suite executives undertaken by Mazars shows that economic and technology-related trends are expected to shape the business outlook over the next three to five years, with 50 per cent of respondents expecting their business to go through technology transformations.
“Technology and innovation are key drivers of growth,” says Mazars audit and business advisory partner Lorcan Colclough. “Technology has influenced consumer expectations and behaviour in recent years, while innovation has changed how we develop and deliver products and service offerings. For example, when launching new products and services, organisations with integrated digital platforms can use advanced analytics to test assumptions they had or receive feedback from customers, reducing the time to market. It may also provide actionable insights to ensure that the customer has a positive experience.”
Businesses can also use advanced analytics to predict and adjust to changing customer demands or purchase patterns, he adds. “Successfully integrating technology and innovation in your organisation can ensure that these trends are identified. Organisations can assess existing innovation projects based on incremental value-added and risks. This ensures that innovation is aligned with the strategic objectives of the business and resources, including competencies and skills, can be allocated to initiatives that have the most value.”
Refine goals
Irish businesses beginning their technology transformation journeys should look at how high-performance businesses exploit technology to achieve their goals. “Senior business leaders can refine these goals into targets and KPIs, ensuring progress is tracked and iterations made to fine-tune products or services,” says Colclough. “Organisations should identify key drivers of revenue and growth and consider initiatives that replenish these drivers and deliver continued growth over time.”
He advises business leaders to focus on outcomes rather than processes when on the technology transformation journey. “Resource allocation constraints often inhibit innovation,” he explains. “Resources should be allocated to new initiatives that will help the business achieve its goals. Once the organisation has identified new initiatives to support growth, business leaders should also review their digital strategy to ensure that capability building is a priority and not an afterthought. Do you have flexible and scalable technology solutions? Do you have the right people to ensure that implementation will be a success? Do you need to upskill staff or hire additional resource?”
Tone at the top is important for fostering a culture of innovation. “Leaders set the tone and create an environment where a collaborative ambitious growth culture benefits from an inclusive approach to problem-solving,” he points out. “When implementing new initiatives, tracking progress is important. However, this can lead to excessive analysis in some organisations. Businesses should ensure that the culture allows progress to be tracked and changes made quickly if needed while focusing on the key deliverables.”
Diversity and inclusion will also help foster a culture of innovation. “Businesses are operating in diverse markets, and the most diverse companies are more likely to outperform those who aren’t,” says Colclough. “Diverse and inclusive organisations also attract top talent and enhance their organisations’ capabilities.”
Technology enablement enhance the value of a business. “It will lead to increased efficiency, reduced risk and will maximise return on capital investment. When it comes to innovation, perfection is the enemy of the good. Speed is more important than precision. However, business leaders must track progress, make decisions and drive accountability.”
He points to a study from McKinsey and Co that shows a strong correlation between innovation and financial performance. “Organisations that can use innovation to drive financial performance ensure that their initiatives have an economic value that couldn’t otherwise be delivered. They also ensure that resources are allocated to initiatives that deliver the most value. The valuations of technology and technology-enabled businesses have increased during the pandemic, and this trend is likely to continue. These businesses that have shown an ability to transform and scale are attractive investment opportunities for peer and fund investments.”
New markets
There is also an investor appetite for technology IPOs to raise money for expansion into new markets, and for developing and launching new products, he notes.
“Organisations that have successfully completed their transformation journey have taken a pragmatic and co-ordinated approach to achieve their goals and objectives,” Colclough concludes. “Businesses must ensure that they have the correct capital and management structures when beginning their transformation journey. It’s essential to understand local legal and tax rules as well as transfer pricing issues. Mazars have helped several organisations with these requirements and have also provided support in research and development tax credits, data security and strategic planning.”