Conserving ROI - How to make money out of your digital investments

In 2020, remote work became a business imperative, and investing in new technology went from being ‘nice-to-have' to ‘must-have' practically overnight. But digital change isn't a new phenomenon. In the months before the pandemic, many companies were finding that, after a decade of investment in digital change, they weren't seeing the tangible ROI they had expected.

As we build a path out of the pandemic, businesses are now once again looking to digital change to enable long-term business growth. But as we learned before the pandemic, simply investing in technology doesn't guarantee ROI. To succeed, it's important to make the right investments - those that afford businesses the opportunity to not only survive, but also thrive through innovation.

So how can you do that? And what lessons can businesses learn from the mistakes made before the pandemic, to avoid making them again? How can today's business leaders use technology to enable genuinely exponential growth?

To get to the bottom of that question, I spoke with Michael Davison, Deputy CEO at global law firm Hogan Lovells, and an expert on the front line of digital change, to see what he had to say.

Digital transformation - then and now

The term digital transformation has been with us for a good ten years. In fact, it's become a bit of a buzzword - and that's a problem. When digital investment becomes divorced from tangible business goals, it ceases to deliver on its promise. And in fact, IDC data backs this up:

• Between 2018-2019, businesses invested some $543 billion in digital transformation

• Yet only 1 in 4 businesses (26%) were able to demonstrate a tangible ROI from their investment

This situation came as no surprise to Michael, because he understands instinctively how important it is to get digital transformation right. He says:

Digital transformation should be about better outcomes for customers and teams. It's not tech for tech's sake, or transformation for transformation's sake. It must be business outcome focused.

But before the pandemic, this wasn't the case for many businesses. After a decade of talk about digital transformation as a catch-all solution, these statistics may come as a shock for many. Digital transformation, for many businesses, had become a means to an end, rather than a tool to achieve genuine business improvement and growth. And before the pandemic, board rooms were beginning to ask serious questions about why their investments hadn't paid off.

Investing in long-term growth

This conversation was understandably swept aside during the pandemic, but it's a question that businesses will increasingly return to over the coming weeks and months as we plan for the future. Most organisations are continuing to invest - and they're doing that with one eye towards real returns now, and another towards delivering long-term business growth. 

For Michael, a lot of this resonates with his experience. At the start of the pandemic, his priorities were very different than they are today. He explains:

When the pandemic started, the real focus was on the immediate business imperative - to move remote and continue to serve our clients. That required some tough choices. But one year on, the situation is different, and there's now a renewed focus on "demonstrating ROI for our partners.

But as we learned before the pandemic started, if you want to achieve ROI tomorrow, it's important to make the right choices today.

A business model set for the future

For Hogan Lovells, their digital transformation strategy is about more than just delivering value today. In the legal market, demand is largely flat, so they need to focus on increasing market share if they're going to achieve their growth goals. That's where digital transformation comes in. Michael says: 

We need to think about how we can improve what we're selling. That drives us towards digital and data. How can we gain a competitive edge by improving our service, and then track it to learn more? These are the questions we're asking.

And it's not just Hogan Lovells making this journey. From car dealerships to large chemical organizations, businesses everywhere are looking to technology to help carve out sustainable, long-term business growth. However, to reach the ultimate goal to transform requires entirely reassessing how they do business - only then can tech become the tool to enable this.

But not every digital change is a success. So, if you're looking to technology to secure your company's future, what decisions do you need to make today to enable this success?

How digital can make a real impact on your bottom line

Much of achieving success in digital transformation comes down to mindset. It's about engaging in an ongoing process and adopting a digital-first approach. Companies that get a tangible ROI from their digital investments acknowledge that this change isn't just about short-term transformation. It's a journey, not a destination.

But mindset is only one part of digital transformation success. Information silos can be a significant barrier to achieving tangible ROI from your technological change. Digital transformation therefore works best when it's implemented on a business-wide level, eliminating silos by connecting disparate processes, departments, and systems.

At the end of the day, digital innovation is about people and processes, as much as it is about systems. As Michael explains, the last thing you want is:

one business unit off generating a fantastic thing, but you can't plug that data into your overall strategy. Quite a lot of work we've done over the last few years is simply joining systems together into a coherent approach.

Many failed digital transformation projects focus too much on individual problems in specific departments or locations, rather than focusing on the wider business priorities. For instance, the flashy new app or system might help your HR team in the UK - but if it doesn't benefit the wider company then you won't see the true benefits reflected elsewhere. And ultimately, it's the bottom line that suffers.

Making the right decisions today

Many lessons have been learned over the past decade - especially this last year. As we look forward to a post-pandemic world, it's clear what organizations need to do in order to gain the ROI they expect from their investment.

Making targeted investments in the right technology is vital. But technology is only one part of the story. Focusing on tangible outcomes that affect the whole organization is the key to achieving long term ROI and business growth.

It's those organisations who focus on a combination of ROI, productivity, and innovation that are coming out on top. Through this, they can avoid the pitfalls of the past and realise the true benefits of digital transformation across their entire business.

If you want to hear my complete conversation about digital transformation with Michael, check out the full fireside chat here.