Embracing the latest technology can help companies advance their processes, expand to new markets, improve customer experiences, and even attract younger employees.
But what do you do when even the best technology on the market doesn’t quite meet your company’s needs? Many CEOs are opting to transform their organizations by developing new technologies in-house.
Companies that develop their own technology have more control over their strategic direction and can better respond to the needs of the market. This can mean a significant competitive advantage when a company develops a compulsory technology before the competition.
It has become easier than ever for companies today to develop their own in-house technology as access to resources and platforms has increased. Yet, developing technology is not a simple task. In fact, for companies without tech as part of their core business, it takes significant time and resource investments, the cost of which must be measured against the ROI of the new product.
Here are seven questions to ask before developing a proprietary technology in-house:
1. How can we incorporate tech into our existing strategy?
Technology is a means to achieving a business goal, similar to the way companies hire people to help meet specific business objectives. They don’t hire people just for the sake of hiring; they hire after establishing clear roles and responsibilities.
This should be also the case when developing technology. Your goals should be clear and aligned to your core business strategy. This strategic intent is the key to identifying the what and how of the new technology.
2. What should the specs be?
This is where bringing in an expert can be very helpful. Someone with tech experience can help you understand which of the different computing frameworks and languages will best fit your product, as well as whether the technology should be hosted locally or remotely.
You also need to consider where customers will use your technology (mobile or desktop), the availability and cost of the required technology stack, the development sequence that should be followed, and the time needed to develop the product.
3. Who should own adoption and development?
This can go several ways. Often the team that will benefit most from the technology advancements, or will be responsible for using the technology, may want to own the technology. In other cases, the IT department owns all technology in the organization. In some cases, the development is shared between the groups that are using the technology, and then one group is responsible for its maintenance.
4. How much expertise do we need internally?
Even if outside experts are brought in to help with development, there will be a certain amount of internal expertise needed. Tech development should be treated as a startup, meaning that there should be a clear funding and support strategy, as well as a dedicated team in place.
The level of expertise and manpower requirements will depend on the capital investment available and the complexity of the product. If you don’t have the in-house expertise, you must decide whether to bring in a temporary employee or a contractor for the development phase, or whether you will need to add other permanent employees to fulfill both development and operations roles.
5. How much will it cost, financially and culturally, to develop and adopt?
The budget for the new technology should include strategy, development, testing, support, training, equipment, and manpower. Regardless of the financial investment needed, a cultural adjustment will be required as well. Starting an internal technology team can introduce cultural and team dynamics issues that must be addressed along the way—not to mention the cultural adjustments of adapting to using the new technology, especially by employees who may be averse to the new way of doing things.
6. How long will it take to see ROI?
One common mistake that companies make is trying to go to market too quickly, ultimately coming out with an invalidated product that leaves customers dissatisfied or has too many bugs to fix efficiently after the launch. There is also the timing of customer education and the rate of adoption to consider. Taking the time to make educated and realistic projections on both time-to-market and positive market momentum will increase the chances of a successful product.
7. How can we minimize risk?
While tech development can create positive strategic value for an organization, it also represents a significant risk. There are multiple risk management strategies available, such as training, outsourcing, hiring consultants, and leasing-to-acquire an existing technology.
One common method is rolling out a plan-build with testing by stakeholders. This significantly reduces the risk of developing an inadequate product, while at the same time increasing accountability between the development team and the rest of the organization.
Developing Your In-House Technology
Companies must create their own unique strategies to address technology-driven disruptions. There is no one-size-fits-all methodology. One thing is clear: as customers continue to adopt digital technologies, companies must keep pace to stay relevant.
Originally published by AllBusiness. | Header Photo by Christopher Gower on Unsplash
