Like other IT leaders, Kathy Kay, senior vice president and CIO at Principal Financial Group, has felt the allure and pressure surrounding hyped-up technology. But focusing on business problems and how to solve them enables her to sidestep shiny-object syndrome and avoid tech hype.
That approach can serve other IT leaders well.
The excitement and the urge to jump on the latest and greatest technology comes with the IT territory. That's especially true as CIOs today are tasked with delivering innovation and agility in a constantly changing business landscape. Vendors are only too happy to position their technology as a panacea. Understanding how to avoid tech hype and approach software evaluations in the right way is critical -- missteps are costly.
The stakes are high: 87% of CIOs said they're feeling the pressure to digitally transform their organizations, according to Adobe's "CIO Perspectives Survey 2021."
Modern CIOs are juggling multiple priorities. They must balance long-term strategic objectives, new business opportunities, rapidly changing market dynamics and quickly evolving technologies, plus ongoing requests from their internal and external customers. Increasingly complex environments often generate competing priorities as well as pressure to move fast. Sidestepping hype and prioritizing the right tech is more challenging even as it becomes more necessary.
The right strategies can help keep IT investments on track. Here are three of them.
CIOs should lean on strategic plans to keep from falling prey to emerging tech hype, said John-David Lovelock, research vice president and analyst at Gartner.
"You need a plan of the things you're going to do and the time frame you're going to do it," he said. "[Then] you have an answer when the CEO or the board comes along with, 'This is the bright shiny object we want,'" he said.
The decision to invest in any particular technology depends on its strategic fit.
Kathy KaySenior vice president and CIO, Principal Financial Group
An enterprise technology plan that puts business outcomes first enables everyone to understand what technology the organization needs, Lovelock said. "If you have a plan and can say when and why and where it fits, you avoid [the technology hype pressure]."
That's the approach Kay takes.
"It is so important to first understand the problem we're trying to solve and the outcomes we're trying to achieve before getting attached to the technology," she said.
Principal Financial Group's enterprise architecture team regularly looks at emerging technologies and assesses how they might add value across the company, including piloting those solutions that appear promising for solving a business need or improving how the company serves customers.
"The decision to invest in any particular technology depends on its strategic fit, as well as the ability of the teams to execute and apply that technology," Kay said.
Think about overlooked costs
Investing in technology is not a one-and-done endeavor, so it's critical for CIOs to look at the various costs associated with an investment, such as the hidden cloud costs of a digital transformation.
CIOs, their IT organizations and their companies as a whole can strengthen their collective abilities to prioritize technology investments by focusing on key financials, said Bill Kirwin, chief of research at A3E (the Advanced Audio and Applications Exchange) and a member of thought leadership platform The Analyst Syndicate.
That starts with establishing an optimal budgeting process for IT, Kirwin said. He advocates for a strong chargeback or showback capability so that organizational leaders understand the costs of supporting an application over a particular time period.
"The budget needs to be bifurcated to look at incoming money and then at what IT needs as a business unit itself to meet its performance requirements for the year," he said.
Implementing that kind of structure is challenging, but it enables IT and the business to get to cost per service. That, in turn, allows enterprise leaders to better calculate whether a new technology is worth the investment.
Balance discernment with creativity
Rejecting technology -- for example, automation or blockchain -- because it's new or surrounded by hype is just as counterproductive as choosing technology just because of its hype.
CIOs should get creative, said Brian Jackson, analyst and research director in the CIO practice at Info-Tech Research Group. As part of that, they can investigate, experiment and evaluate new technologies for their business potential.
"It's easy to discount new technologies as hype, but it may be the solution you need, and you don't want to miss out on a competitive advantage because you have this idea that these new things are only hype," he said. "You want to be asking, 'If the sky's the limit, what would we like to do? What's the best possible outcome for the organization?' That's how you want to start setting your priorities."
However, CIOs must balance agility with governance to successfully lead their organizations.
"Most companies have an annual budgeting process, but that doesn't mean it's one-and-done," said Caren Shiozaki, CIO and executive vice president of financial services firm TMST Inc. "Prioritize change because the world changes, so you have to be able to pivot."
Shiozaki, who serves as a governance subject matter expert with the professional IT association ISACA, turns to her company's steering committee and its monthly meetings to discuss whether new needs or new technologies require adjustments in planned IT spending.
She pointed to a recent case where her firm faced a greater-than-expected increase in the volume of data that needed review to meet compliance regulations. At the same time, her team identified an analytics tool that could more efficiently process the data, thereby reducing the manual work required and cutting the risk of fines for noncompliance. After reviewing the business case, the steering committee endorsed the six-figure investment and reprioritized the IT spending plan to accommodate it.
In other words, flexibility is key.
To that point, companies that can be dynamic and adapt quickly are much more likely to succeed than those that are too cautious, Lovelock said. "Dynamism is the biggest indicator of success."
