Focusing Your Technology Modernisation Investment Strategy

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Past experience with the cost and risks of technology modernisation projects is driving boards to be more selective about allocating capital and has increased the emphasis on the certainty of delivering tangible value.

Technology modernisation is a topic that has found its way into every C-suite and boardroom. In recent years, significant investments have been made by companies recognising a need to modernise to avoid losing market share to “born digital” entrants to the market. But the hype has since slowed down. In financial services, the winner-takes-all view has softened as fintechs are not crowding out incumbents. For companies across all sectors, the initial return on investment (ROI) associated with new technologies underdelivered. And, of course, the cost of capital jumped significantly, raising the hurdle rate for all investments.

Accordingly, an evaluation of the board’s framework for navigating technology investments relative to other business priorities is in order — with the objective of maximising value and minimising financial risk. To that end, directors may benefit from considering the following 10 questions underpinning a practical framework for addressing this objective:
 

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