Just how do you calculate the true digital transformation cost? And how do we overcome the uncertainty surrounding new technology implementations?
Previously, we discussed companies’ fear of new technologies and implementations. Tamping down fear of the unknown is the first step to correctly analyzing your tech requirements.
If you remain fearful, you never get to the analysis and requirements part – instead, it becomes very easy to rationalize doing nothing, or just poking around the edges without serious intent to understand the full potential of what new digital technologies could do for you and your business – as well as which tech you should be looking at in the first place.
Granted, there is good reason for caution. We all have stories of tech promises not achieved – with budget busting costs to wrangle the tech into something reasonable and useful. Typically, the reason for the wrangling is not having created a solid set of requirements before listening to marketing pitches or before buying the same thing another company uses.
But there is much more than the budget busting “fixing” costs and the original product/service price to look at.
First, as said before and which can’t be stated enough, create realistic requirements for how the tech will be used, what users expect from the experience, and what integrations are essential for working with your existing systems.
Second, get a real price quote.
While this certainly adds to the normal purchasing cost, better to know these costs up front than to use your budget later trying to patch things up.
You’re looking for total costs – but you’re not done yet.
Third, how much will it cost if you don’t add the technology?
This is the part where hand waiving opinion generally occurs. You have talented people in your company, get some data behind the opinions and uncover facts you need to know. For example:
With today’s digital technologies, when you cannot enunciate the cost of not having specific technology performance, you lose the ability to master the easy to see applications on your terms. You lose the ability to transform your business in ways you didn’t understand and couldn’t imaging at the beginning due to the capabilities and options each technology, and the synergy of multiple, carefully planned technology implementations and integrations, provides. It may be similar to other business options, but will definitely be unique to yours. You are creating value no one can copy.
For example: who would have thought a digital twin in maintenance could make your maintenance team a profit center? Seem impossibly big for your company? Not anymore.
Who would have thought your business, large or small, would be considered part of a customer value chain instead of the supplier of a product or service? Customers buy because you have something that provides value – it solves a problem. The value is in the problem solving, not the business name.
Gone are the days you could never go wrong if you just purchased IBM. IBM offers specific value to specific customers. What is your value?
What would it cost to be the value provider the customers you want are looking for?
Cost considerations have to advance with the advancement of technology. Gone are the days a single number is enough to make a buy or don’t buy decision.
Look closely and carefully: see the possibilities.
Then work the real costs.
Find out how to be the value provider customers are willing to spend money on Click here
Keywords and concepts: cost, digital technology, tech, advanced technology, supply chain, performance, digital transformation, strategy, innovation
Cynthia Kalina-Kaminsky is the President of Process & Strategy Solutions which helps businesses and supply chains of all sizes and varieties grow, optimize, and digitally transform Kickstart your reliable digital transformation – to learn how – click here