B2B Payments

The Dangers Of Leaping Before Looking In Digital Transformations

Enterprises must embrace technology to remain competitive and efficient, yet research suggests they’re struggling.

Data from the Association for Financial Professionals (AFP) in its AFP MindShift survey, published last year, found just 6 percent of corporate treasurers have implemented robotic process automation, only 2 percent have integrated artificial intelligence (AI) and just 1 percent have adopted some type of blockchain tool.

PYMNTS’ latest SMB Technology Adoption Index similarly found evidence that smaller companies also struggle to embrace technology, with just 13 percent saying they were willing to adopt the latest innovations.

But as the pressure to adopt cutting-edge solutions intensifies, new research from PointSource suggests some organizations are making hasty, rash decisions in their digitization efforts — and it could be making things worse for their operations and customer experiences.

“We’re finding that many organizations are making the same mistakes twice when approaching digital transformation,” said PointSource VP of Digital Transformation Greg Ng in a recent statement announcing the firm’s “2018 Digital Transformation Report.” “They’re rushing to make huge investments in technologies that are perceived to have high ROI and then failing because they aren’t prepared — leaving them with technologies that don’t work as intended or conflict with existing systems.”

 

Feeling the Heat

The race to adopt new technologies is a result of organizations feeling increased pressure to do so. According to PointSource’s analysis, 94 percent of businesses surveyed said their focus on digital growth has increased in the last year, while 90 percent agree their digitization efforts are an integral role in overall business goals.

But these companies also acknowledge the need to embrace technology for the sake of improving operations. Most senior-level professionals (57 percent) said they know the existing technologies in their organizations are falling short and are unsatisfied with at least one of the technologies on which their employees rely. This challenge is even more acute at companies that have been in operation for less than a decade, with 65 percent reporting similar dissatisfaction with current tools.

Most businesses told researchers they feel “digitally outdated,” said PointSource, while 45 percent of decision-makers at these firms feel their companies’ digital progress falls short compared to their competitors.

 

Digital Disconnect

While organizations understand the need to digitize their operations, PointSource’s report suggests their strategies for doing so don’t always align with what the c-suite wants, or what is best for their firm.

A quarter of businesses surveyed said they plan to invest more than 25 percent of their budgets in AI, blockchain and biometric solutions. But the report warned that senior managers and c-suite executives aren’t identifying these technologies as a top priority or the tools that will drive growth this year.

Further, the executives that procure these technologies aren’t necessarily in the most qualified position to do so. Chief technology officers only lead technology purchasing decisions 11 percent of the time, researchers found; PointSource noted this could contribute to the fact that most companies aren’t prepared for the technologies they’re deploying.

“It’s important that when organizations feel the pressure to go digital, they take time to make sure they’re making rational technology choices rather than just investing based on hype or what their competitors are doing,” PointSource’s Ng added. “History doesn’t have to repeat itself if organizations are proactive about these technology investments.”

In another statement, PointSource Chief Digital Officer and Chief Operations Officer Stephanie Trunzo said decision-makers have to identify a problem or opportunity before they can begin the digital investment process.

“Too often companies attempt to start a transformation journey with technology first or in a silo of a single department,” the executive stated. “Starting with small incubators is frequently a necessary and practical way to start; however, those incubators need to use success as a spark to blaze a bigger fire. Eventually, companies need to collaborate across departments, focus on where they are going and then allow technology decisions to be the subplot supporting their primary narrative.”

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 AML/KYC Tracker provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

TRENDING RIGHT NOW

To Top