How Industrial Leaders Can Avoid Buyer’s Remorse When Investing in New Technology

Investing in technology at the right time and when the company is ready can lead to higher success rates.

Dan Luttner, Managing Partner of Plantensive · September 26, 2024

The arms race for technological integration continues, leaving supply chain leaders in a bind on how to avoid falling behind their competitors.

We are living in an era of abundant choices, which presents both opportunities and challenges for business leaders as they navigate the complex landscape of selecting suitable technology solutions for their companies. Unfortunately, many fail to choose the most appropriate solution, with some reports indicating that nearly two-thirds of tech buyers experience buyer’s remorse shortly after investing in new software or platforms.

In this environment, supply chain organizations face three major pitfalls when evaluating new technologies: following industry or competitor trends without proper review, misjudging potential solutions, and lacking the necessary partnerships and internal buy-in to realize the full potential of their purchases.

Below are ways business leaders can avoid these mistakes and maximize return on investment.

Don’t Yield to Peer Pressure

The surge in AI tools makes it tempting to engage in competitive comparisons and rush to follow trends to maintain competitiveness. Don’t do this. The AI craze has sparked unprecedented excitement but also opened the door for opportunists looking to capitalize on companies’ eagerness to keep up with the latest trends.

It’s important to remember that AI is not a panacea. Identifying appropriate problems for specific use cases will guide how to implement the right AI tools—or whether they are even needed at all. Simply implementing AI for the sake of AI isn’t enough. Instead, it’s about choosing the right business problem and applying AI solutions that can drive business growth and/or savings.

Purchasing leaders should stick to fundamentals and “trust but verify.” If a software company lacks compelling real-world case studies to support its claims, include this in your risk-reward assessment. Are you prepared to take the risk of being a tester for an unproven solution, or would you prefer a more cautious approach?

Rely on Scenario Planning

A thorough return-on-investment analysis is often more complex than it initially appears. Beyond the initial cost of the solution, planners must accurately quantify the value of operational efficiencies. This makes it difficult to distinguish between empty promises and real benefits during the sales process. To successfully do this, two major factors in the assessment are financial feasibility and operational execution capability.

In the financial analysis, there are several important initial costs to consider. First, develop a performance metric to establish a baseline. This baseline, applied to factors such as forecast accuracy and holding costs, can provide meaningful evaluations of software claims to reduce costs. Once the baseline is established, planners can incorporate scenario analyses into their financial models to address questions like “How will the platform perform if demand for one of our products surges?” These insights will offer a clearer view of risk versus reward.

Implement Effective Change Management

After thoroughly assessing your business needs and setting clear benchmarks, the next step is selecting the most suitable solution. To increase the chances of making the right choice, consider hiring analysts or consultants to help identify software that aligns with your predictive analytics and automation goals.

Once a selection has been made, business leaders should focus on preparing their teams to maximize the potential of new solutions. Before implementation, develop detailed plans including training programs, communication channels for questions, and feedback loops to track progress and adjust processes in real-time. These steps will help ensure smoother integration and higher adoption rates.

Effective change management, often underestimated, is key to a successful rollout. After the consulting team leaves and the technology is in place, following prescribed workflows will enable your business to fully leverage the benefits of the software.

Conclusion

There’s no doubt that AI and other emerging technologies can propel businesses forward, but it must first be evaluated whether it’s the right time for your company. For example, if you rely on Excel spreadsheets and basic forecasting without advanced segmentation, improvements can be made with existing resources before adopting new technology. This is why business leaders should return to fundamentals and trust their instincts as proactive supply chain planners rather than passive buyers. Developing accurate benchmarks will reduce uncertainty and bolster confidence in your decisions, helping avoid premature entry into new technologies.

If you decide that your company is ready to integrate AI or other technological solutions, don’t hesitate to seek external experts with proven success stories. It’s equally important to ensure your team is prepared for the transition—because without strong buy-in, the potential return on investment of any new solution can never be fully realized.

About the Author:

Dan Luttner is a Managing Partner at supply chain consultancy Plantensive, which is part of MorganFranklin Corporation.

Technology investments can help businesses grow, but if the company isn’t ready, it only hinders progress. Plantensive’s Dan Luttner explains how to make the process more successful.

Source: New SCMR