Why companies end up spending more on digital technologies than anticipated | Sherpas in Blue Shirts

Posted On August 6, 2018

Think about animals that travel and hunt in packs. Digital technologies seem to work the same way. Wolves, hyenas and wild dogs, for instance, are smaller and less powerful than larger animals such as mountain lions. Hunting in packs enables them to conquer animals larger than themselves. They work together to find the right opportunity. Similarly, digital technologies don’t come in isolation. They quickly demand a level of competence across a broad set of companion technologies – and some of these additional technologies also have their own sets of companion technologies. Typically, companies that adopt digital technologies end up spending much more time and money and building much more expertise than they initially anticipated. Consider the following three examples of what typically happens.

Example: Artificial Intelligence technology

Perhaps your company is like others that believe Artificial Intelligence (AI) can contribute to their business. But you’ll find that as soon as you start to think about AI, you start to think about data and data sources. That unleashes a substantial amount of work in building data warehouses. You may encounter a hurdle that many companies often find: data sources are less reliable and less precise than you had hoped. As a result, your company will need to build new data sources or improve the existing data sources. That effort will likely move your company to implement cloud technologies, along with the analytics software and data-management software that comes with cloud.

So, what appears to be a commitment to exploring just one digital technology leads to implementing a whole pack of other new technologies. The problem is that each technology requires a learning curve of its own and often sets up a cascading effect of its own. It’s like the “dominoes effect” – one thing leads to another, leads to another and leads to another.

Read more in my CIO blog: https://www.cio.com/article/3294994/budget/why-companies-end-up-spending-more-on-digital-technologies-than-anticipated.html

Everest Group Executive Viewpoints icon Related Articles