Good afternoon! When investing in IT, it can sometimes take a long time to see the downstream effects of organization-wide changes. But with this week's Braintrust question, we asked the experts to think about their experiences with generating quick — but still significant — wins, especially when broader (and slower) transformations are still in process. Questions or comments? Send us a note at firstname.lastname@example.org
Chief Information Officer at XPO Logistics Inc.
Technology initiatives that transform business operations can drive top-line revenue as well as bottom-line growth. When prioritizing short-term improvements, companies that leverage proprietary software give themselves a strategic advantage by creating strong feedback loops with operators and customers.
XPO's first-mover advantage as an industry innovator in freight transportation is rooted in the more than $3 billion we've spent on technology since 2011. As the industry evolves, customers want to de-risk their supply chains with more automation and better visibility. We focus on three key levers to deliver direct business value and ROI: volume, price and productivity. To meet customer demands, we've made several significant IT investments resulting in immediate ROI, including:
Volume: API integration allows our customers to receive quotes and place orders directly through the system, either by direct integration or by leveraging our integration with leading transportation management software providers. This enables us to grow our top line by getting more volume.
Price: Our dynamic demand-based pricing system uses machine learning to understand the ebbs and flows of capacity, elasticity and segmentation to capture higher-margin pricing opportunities and tailor sales strategies for customers of various sizes and supply chain needs.
Productivity: Automating repeated tasks allows the team to focus on more value-added activities. In our less-than-truckload business, we deployed XPO Smart workforce planning tools to enhance productivity. Our truckload brokerage business has achieved significant volume growth while expanding our margin by continually improving the experience of our customers and employees through automation on our digital freight marketplace, XPO Connect.
Three years ago I read "Atomic Habits" by James Clear. It transformed my way of thinking about my team's investment of time and money in our IT projects and activities. Essentially, the book made the case that significant improvements can be realized by making extremely small changes in how we do things. With this in mind, I encouraged my team to document and examine the complex workflows associated with our IT services delivery.
We prioritized the services that we delivered poorly — those that necessitated the most re-work. For each of those services, we identified one or two elements of their associated workflows or interaction designs that could be improved with the application of modern technology, and we discovered that we needed to automate some elements of our service delivery that were error-prone or time-consuming. We made a small investment in a machine learning/natural language processing tool, and another small investment in a low code/no code tool.
By automating the most inefficient steps of our most inefficient processes first, we dramatically reduced re-work, freed up significant capacity in our teams and directly improved productivity for all of our employees. In fact, by automating just five of our least efficient services, we freed up 25% of our team's capacity and increased overall service delivery velocity by 31% in the first 12 weeks of this process. Fast forward to today, and over 85% of our IT services are delivered fully autonomously, saving significant time and money for the company, while freeing our employees to do their jobs and freeing our IT team members to focus on more meaningful work.
Today, customer experience should be at the heart of innovation. Our customers want to remain competitive and fast-track innovation to meet the ever-evolving expectations of their customers, patients, etc. To create significant, immediate ROI, organizations should prioritize IT investments that answer the challenges that their customers are navigating.
While there has been understandable investment in back-end, digital infrastructure across industries like financial services or retail, those investments will never show true ROI, and certainly not quickly and at scale, if you don't put yourself in the shoes of your customer at the outset of an IT project.
Across financial services, no matter how solid the digital foundation is, if the user experience doesn't win with customers, development is a waste of time and resources. Can your customers seamlessly move from branch to application with a consistent and continued conversation?
In retail, the last two years have been especially challenging, but we have a good understanding of how digital ready businesses succeeded — those that prioritized ecommerce and stellar customer experience won.
Building modern applications on a trusted digital foundation, automating when possible and keeping the customer experience at the forefront of innovation is the quickest way to realize ROI in your IT investment.
When making large IT investments, organizations often focus on speed, outsized ROI expectations or the immediate delivery of benefits to customers, employees or other key stakeholders. As a result, rushed implementations are often done in silos and without a full consideration of the potential threats to an organization's greatest revenue-driving tool — stakeholder trust.
We find that the trust built between a company and its stakeholders is the ultimate business enabler, and implementing internal projects without fully partnering with risk and compliance can erode that trust. This better positions IT investments to achieve the desired ROI and helps prevent a worst-case scenario where the investment produces negative returns.
To provide an example, when our team consults on an IT build — from layering in AI functionality to monitoring potential fraud in cross-border payments to building more robust cybersecurity infrastructure — we begin by understanding who the stakeholders are, where the organization has built trust equity and how an IT investment will impact each uniquely. Starting from that perspective, it provides organizations the clarity to prioritize long-term ROI drivers over short-term gains that can be appealing in today's highly competitive and fast-moving business environment.
President, Global Enterprise Computing Solutions at Arrow Electronics
When thinking about ROI from IT investments, it is important to be clear on what type of return you're looking for: increased revenue, reduced cost and/or reduced risk. Each of these carries a different timeline for when you will see the benefits materialize. Regardless, all IT investments should be directly tied to your company's strategy. Throwing money at returns that may be quicker, but not strategic, is foolish.
Kevin McAllister ( @k__mcallister) is a Research Editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team.