Nearshore Americas

With High-Tech Commoditization Accelerating, Strategy is Everything

It is always the same. When something is new, there is a fascination with “the thing” and whether you have it. You see this trend with fashion, with new products, new methodologies, and yes, also with technology.

Take videoconferencing. A few pioneers such as Webex and GotoMeeting emerged in the last decade. If you were in business and you used these two, it was a sign that you were serious. Only the “big guys” were able to afford a deployment of those tools, and simply by having it, you positioned yourself among the leading edge of business technology.

Then came the rise of Zoom, which started to expand aggressively, thanks, in part, to low pricing. This year, the Covid-19 pandemic means a plethora of videoconferencing brands and different technologies have established themselves in the market. Now, it is nearly irrelevant whether you use Teams, Zoom, Skype, Webex or GotoMeeting, Jitsi, Google Meet or anything else. What has become important is whether you are using it well, for the right reasons, with the best practices to engage your team and to “digitize” your organizational culture. The “why?” and “how?” have become the relevant questions – the most important things to consider.

Just Having the “Thing” is No Longer Enough

Today, anyone can buy a cheap Zoom or Jitsi plan to provide videoconferencing for everyone in their organization. Having the “thing” is no longer relevant. The relevant question is why you use it (the business objectives) and how you implement it (the best practices and processes). These questions determine whether you add value by deploying videoconferencing technology across the board or just selectively direct it towards your critical processes or customer touchpoints. It is how you use it to enhance your customer journey that counts.

The same is true for any other technology. People define “technology” as equal to hardware plus software. But technology really means the application of scientific knowledge for practical purposes; whether this is computer technology, a branch of knowledge dealing with engineering, applied sciences or a methodology for doing something.

“the brand of automation technology you have or can afford is starting to become irrelevant”

Remember the balance scorecard? Twenty years ago, every serious board room had to do a balance scorecard for strategic planning, it was the “in” thing to do. Lean and six sigma was “the thing” until companies learned the hard way that change did not happen just by training everyone and giving away colored belts. It is not the methodology itself, it is why you chose to deploy it and how you do it that drives positive change.

In the same way, the brand of automation technology you have or can afford is starting to become irrelevant. Prices are going down, the pioneers are now being “cloned” and many automation capabilities are starting to look the same, with similar features. This is the world we live in post-Covid.

From State-of-the-Art to Regular Commodities

The pandemic has accelerated change by at least 10 years according to experts, and this also applies to automation technologies. Many companies paid thousands, even millions of dollars for “state of the art automation technologies” just a few years ago. These have suddenly become regular commodities in the “post-Covid” world and some of those companies are wondering if that investment at a premium price is going to last long enough to offset the initial down payment. Fast commoditization of formerly premium technologies are a headache for many CFOs and CIOs.

Before jumping into automation, it is crucial to spend time developing a clear strategy. Focus on the reasons why you need to automate. In my recent articles about the minimum viable business model and the need to re-think your business model, there are some ideas that might help you think about the “why” you need to automate and where to apply that technology in your organization. Make sure you have clear reasons and have identified where automation will create the most bang for your buck.

Devote time and effort to seize and scope the factors that define the “how-to” of automation. By this I mean:

  • Pay attention to the TCO (total cost of acquisition) over the whole expected lifetime. Austerity plays an important role in this post-Covid environment. I am not suggesting that you halt spending, but that you are rigorous in analyzing how you spend. Some ideas to start thinking about around this topic were outlined in my recent article about leveraging strategic procurement.
  • Learn from the mistakes of others when trying to implement automation. There are some tough lessons to be learned and it is best not to learn them through experimentation but by looking at others. Valuable insights can be obtained from looking at past experiences and focusing on customers and how to add real value to them.
  • Pay attention to your options when it comes to technology providers and the support they can give you. Are they just a reseller? Do they have industry expertise in what you do? How deep can they dive into implementation? Can they help you re-think your processes too and manage the change of mindset towards digital? Can they structure their fees with a success fee at the end of the journey? Your customer journey as a client of one of these providers can be very different depending on who you partner with to accompany in your transformation.

A Crisis is an Opportunity

The current times are tough for businesses and any other type of organization. Everyone is strapped for cash. On the other hand, there are windows of opportunity for those who choose to reinvent their business model and align them with the transformation of the customer, the employees, the behaviors of both and the changes in their expectations from their suppliers and their employers.

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These opportunities will not come back. Once the changes in society are settled and the dust clears, those who took the opportunities will be in a much better position that those who let them pass. This is the time for having a true commitment to innovation, for getting it wrong in a controlled manner, learning from the experience and re-thinking your approach.

With the commoditization of information technology, robotics, workflows and artificial intelligence, it is a time to take an critical look at your automation needs. Learn, try and experiment. There are dozens of options that were not there a year ago and this presents opportunities for faster and cheaper implementation.

As the commoditization of technology advances, the “how” and the “why” become even more critical, because you now have so many options to choose from.

I hope I have given you several ideas to think about. Let me know what you think of this? Connect with me on LinkedIn and share your feedback. These are challenging times but also great times for changes.

Otto Acuna

Otto Acuna is an Internationally Certified Management Consultant that helps organizations to work better through strategy, operational improvement and digital transformation.

He has over 20 years of experience in managerial and non-manufacturing processes and industries. His company, EXYGE.COM specializes in the Financial Services Industry, Shared Services and a wide variety of back office functions.

Otto is the first CMC-Certified Consultant in the Spanish Latin America region and also trained in ISO20700. He volunteers as the Chair of the Professional Development Committee at CMC-Global Institute the international chapter of CMC-Global, the organization that regulates the Management Consulting profession in more than 50 countries and territories worldwide. He recently joined also the Quality Assurance Committee at CMC-Global where he supports the tri-annual audit of management consulting institutes worldwide. Otto operates mainly in Latin America, the Caribbean and more recently in Portugal and Spain. You can contact Otto here.

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