Four Steps to Get More Value From Tech Investments
Learn how to assess core functionality execution with tech maturity frameworks.
Carly French, marketing technology strategy consultant at Merkle, explains why leaders should prioritize new tech investment. Despite ROI challenges, establishing a unified language for measurement to bridge between technology capabilities and business gaps.
Is your leadership team prioritizing new tech, or is there a need for new capabilities? Most, if not all, C-Suite execs agree that their organization needs to invest in modern, scalable technologies to stay competitive in their market.
According to Forrester’s 2023 Priorities Survey report, 68% of tech professionals say linking IT investments/operations to strategic business objectives is a high priority. However, quantifying the return on investment of those technologies continues to be a challenge across all industries, halting many tech purchases or causing crippling buyer’s remorse.
Let’s dive into the four-step approach organizations should follow to get the most value from their technology investment.
1. Understand Priority Business Use Cases
Step one is to understand how your organization will use the technology. Business use cases to solve a broad business and capability challenge and contain one or more channels, tools, or audiences designed to accomplish a tangible future state vision or goal.
Inputs to developing strong business use cases include customer expectations or needs, current pain points, business outcomes, employee or marketer experience, and, most importantly, technology needs.
Examples of priority use cases could be something as simple as being able to trigger relevant messaging based on a user’s actions, or it could be more complex, like the ability for a customer to use an AI-powered personal shopper on your digital store.
2. Get the Right Data and Technology to Power Use Cases
Ok, so you know what you want to do with your technology. It’s time to assess your current utilization and the maturity of your existing technologies and data infrastructure. Leveraging a maturity framework for each technology or capability area, rank your organization’s ability to execute core functionality.
You may be surprised at how immature your organization is when it comes to your tools, but you wouldn’t be alone. Recently, Gartner uncovered that, on average, organizations only use 33% of their martech stack capabilities.
One approach is to evaluate your capabilities on a scale of 1-5, with 1 being the most rudimentary and 5 being the most advanced. For example, to assess your identity resolution capabilities, a level one might have a function like capturing some personally identifiable information (PII) across systems but no framework or process to link identities to a user across digital and physical spaces.
A 5 could be that you have a structured approach and formal processes for linking terrestrial, digital, and device IDs across all owned properties, media, and devices with a clear identity strategy owner.
This connection point between technology capabilities and business use cases will be the baseline for quantifying value.
See More: Why CIOs Are Focusing More on Software Spend and Up-leveling
3. Bridging the Measurement Gap: Establishing a Unified Language
Building standard definitions and terminology for technology investments and business outcomes is essential for organizational alignment and adoption. Think about defining value criteria across both quantitative metrics and qualitative metrics.
For example, quantitative could be like revenue, such as a social ad click that converted into a $45 sale. Qualitative criteria could be customer experience-based, such as time saved by the customer ordering in the app vs. in the browser.
These criteria should connect to the inputs to develop your business use case, like solving a customer need or addressing an internal operational challenge. Then, define scores for both quantitative and qualitative criteria.
For instance, in improving customer experience, you might use scores and terms like this:
Source: Merkle
Once you’ve established the criteria, the definitions, and the score ranges, you can begin to score your business use cases. For more qualitative ones, like the above, building more specificity to your definitions or even providing justification for why an outcome is scored in a level helps.
For example, a retail clothing store could consider investing in AR technology for an at-home, virtual fitting room. They might rate the Customer Experience Impact as a level 5, meaning it has an outstanding impact due to generating new sales from at-home try-ons. In contrast, a common business use case like adding a BOPIS option may only result in a moderate positive brand association, not significantly higher.
For quantitative scores, collect baseline metrics for the business use cases like operating costs, software costs, or revenue gains by business outcomes. If, for example, an organization is thinking about improving its loyalty program with rewards, it should establish baseline metrics for the existing loyalty program and then estimate the incremental lift across the core quantitative metrics. This could look like today: without a loyalty platform, it takes a marketer 100 hours to create an offer, but with a platform, we reduce it to 10 hours, saving the company $20,000.
4. Value Score Shapes Technology, Driving Business Use Cases
The output will allow an organization to correlate technologies with a projected value score through business use cases. This is beneficial for justifying ongoing investment in existing technologies or projecting the value of new investments. Establishing this framework also allows an organization to build a repeatable, standardized process for technology valuation.
My team and I have worked to implement this approach, and some key outcomes include:
- Reduced software spending through de-duplication and consolidation of tasks.
- Increased team efficiency through better use of software to automate tasks and eliminate manual work.
- Increased tech utilization by identifying new use cases and applications.
- Lowered costs to perform or deliver key activities.
- Improved organizational visibility of the technology ecosystem and how the technology delivers on marketing goals.
- Consistency in value criteria and definitions created a common language across finance, marketing, and IT.
The brands that invest time and effort in establishing these foundations reap enduring benefits from their tech investments in the long run.
How has your organization allocated a budget for technology expenditures? What steps have you taken to overcome the challenges of ROI? Let us know on Facebook, X, and LinkedIn. We’d love to hear from you!
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