We spoke about VistaPrint research showing that many business owners felt positive about growth during the year ahead. Tech and automation were one reason for that outlook because owners believed those tools could help them win customers and handle workloads more efficiently.
Now, a new survey from 3stepIT indicates that the enthusiasm has not disappeared, but businesses are struggling to explain and justify tech spending.
The company found a disconnect between what organisations expect tech to deliver and how investment decisions get made.
Many organisations view tech as one of the leading drivers of business value and many also struggle to relate spending decisions with long term business outcomes.
What Is Stopping Organisations From Justifying Spending?
The research found organisations have huge expectations for tech but often use different criteria when deciding where money goes.
According to the survey, 82% of organisations rank tech and people as the leading drivers of business value. Only 16% fully agree there is a connection between business strategy and tech procurement.
A total of 83% said tech drives efficiency but just 8% treat tech as a business critical investment consideration.
And the disconnect continues throughout other business areas, too.
Security shows the same thing throughout organisations. The survey found that 62% view security as a top business threat, but only 49% rate data protection as a high investment priority.
Those responses mean that organisations expect a great deal from tech but do not always use those expectations when making purchasing decisions.
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Are Organisations Buying Tech For The Wrong Reasons?
The research found that purchasing decisions often revolve around short term costs.
Many organisations make decisions using information available during purchase discussions rather than examining the entire lifespan of a tech investment.
Even though tech budgets continue getting larger, 64% said they rejected a superior tech solution because of initial cost. Another 67% said purchase price carries too much influence during procurement decisions.
That creates a problem for leaders who must explain spending outcomes later. Nearly 90% said they are evaluated on the overall business value created through tech. But still, 58% said they do not have an effective way to demonstrate long term value.
Jakob Lagander, CEO of 3stepIT, said, “Technology has shifted from a collection of operational tools to critical infrastructure that organisations fundamentally rely on. But the investment impact gap is undermining tech value and exposing organizations to critical business risks from procurement to retirement. Today, nearly 90% of leaders are evaluated on the overall business impact of technology, yet most are making investment decisions without visibility of their lifecycle consequences.”
What Happens After The Purchase?
The research found many organisations spend much more time evaluating purchase costs than examining what happens later as 74% prioritise the data security of active assets over retired assets when making investment decisions, and 26% recover no value from decommissioned tech assets.
Retirement, disposal, security and compliance all have financial consequences throughout a tech asset’s lifespan.
Carmen Ene, CEO of BNP Paribas 3 Step IT, said, “Tech investment decisions shape long-term value and risk. But too often, they are made with a transactional, short-term lens. Having a lifecycle view upfront can be the difference between locking in hidden costs and vulnerabilities, or building resilience and long-term competitive advantage.”
So, in short, the research is saying that many organisations are very much aware of what they’re doing when it comes to purchase costs, but less attention is paid to possible consequences arriving years later.
This is due to the fact that investment decisions are often made using information available at the point of purchase, such as price and immediate operational requirements, rather than considering the full lifecycle costs or risks, because like AI, the value of the tech asset is currently unknown for the years to come.
