Should Future Proofing Mean Companies Invest in Their People or Technology?

Challenging economic times, volatile world events and fast-changing technology are leaving organizations more vulnerable than ever. It’s much harder to predict where new risks will come from.

PwC – Future-proofing your business a framework for thinking differently about your risks.

Future proofing is ensuring your company survives during unexpected future challenges. We are not able to tell what will happen in the future, but we can take steps to prepare for the unexpected that comes with the fast changing environment that we live in. This involves combining aspects of people and technology.

Before we begin the analysis of which of the two is ideal for future proofing. Let’s first of all look at the major future proofing strategies companies are adopting in their search for success.

FUTURE PROOFING STRATEGIES

I.      Creating a diversified product portfolio

You may have achieved great profits with just one product, which is good, but to ensure survival in the event that the market changes against you, it is good to take advantage of your strengths and invest in other products or services. For example most Telecommunication Companies in Kenya, provide an array of products and services including; pre-paid and post-paid calling options, home and office internet options and mobile money. This is a good example of how a company can diversify. In case one product does not do well, the company will still have income coming in from the other products.

II.    Investing in Research and Development

Product diversification can be supported by creating an environment that allows for collaboration and innovation. Investing in research and development and having policies and a reward system that encourage staff to be creative and to give insights and ideas on new products, goes a long way in encouraging product diversification.

III.  Taking advantage of BIG DATA.

Big data is structured, unstructured and semi structured data that allows your people to analyze business information. Big Data can be purchased or mined through your existing data collection channels. Examples of Big Data currently being used is data on customer preferences. This allows you to look at how best you can provide a better customer experience, either through introducing a new product or service that will meet the changing customer needs or making the processes more efficient e.g. introducing online channels.

The more a company pleases its customer the more difficult it is for them to switch to the competitor e.g. Hospitals nowadays provide free Wi-Fi or TV as you wait to be seen by the doctor. This makes the waiting process more manageable.

Big data therefore enables you to see trends and patterns that can be used to forecast changes in the industry and keep your business in a position to take advantage of new opportunities.

IV. Cost optimization

In order to future proof your business you need to ensure that all company resources are being used in line with the company goals and objectives. Doing a review of your business operations is the first step to cost optimization. You will be able to identify and stop spending money on non-essential activities. This will free up resources that can be invested into preparing for the future.

V.   Identify and Manage Risks

As you conduct your review of operations, you need to identify the gaps/risks in your company processes and take steps to mitigate them before they turn into major problems. Examples of Risks include; Financial Risk, Operational Risk, Regulatory risk, Cyber security, Reputational risk, and Physical risk among others. For example companies operating over an internet connection, risk having a cyber-attack, if they have not put measures in place against this. In order to future proof your business it is prudent to have an audit of your operations and identify what can be solved/rectified before it turns into a major crisis that could potentially damage the company.

WHERE DOES TECHNOLOGY FIT IN WHEN FUTURE PROOFING?

Technology makes all the above strategies more efficient or makes it easier for the employees to execute their role e.g. fast internet connection, cloud computing, a reliable phone system and installation of updated and relevant software is an essential part of future proofing.

By leveraging on technology you increase efficiency in your business operations and reduce costs e.g. conducting promotions through online/social media channels which is relatively cheaper than the traditional Print or TV Commercials or opting for virtual meetings as opposed to face to face meetings, which have a lot of cost implications including cost of accommodation and travel. By using technology, you will be able to free resources/cash flow that can be invested in future proofing strategies that cushion your business in case of a future crisis.

Technology has also advanced immensely in the recent past and we can now find technology that supports almost all of our operations such as Cloud Computing, Artificial Intelligence (AI), Data Analytics, The internet of Things (IoT), Augmented reality (AR) and Virtual Reality (VR) among other kinds of technology.

Companies should take time to choose the right technology for their company, based on their overall strategy and goals and more specifically their future proofing strategies.

HOW ABOUT PEOPLE?

A company that has invested in its people can easily implement its future proofing strategies. This is because the staff is well motivated, willing to work for the company in the long term and willing to learn new skills.  

If you focus on technology and give your staff a back seat, you risk having a demotivated team. This may result to a high turnover, which causes you to constantly hire and train new staff and not give enough attention to put in place measures to keep the business afloat when crisis strikes.

SO IS FUTURE PROOFING ABOUT PEOPLE OR TECHNOLOGY?

Both people and technology are equally significant when it comes to future proofing of companies, but putting structures in place that support people precedes investing in technology. Once that is done, it then becomes easier to future proof. Then again, if you focus on the people and not provide the right technology to support their work, you also risk people who are frustrated and have lower productivity levels.

You can therefore future proof your business by having engaged people who have the expertise to develop future proofing strategies and have the willingness to implement the strategies. At the same time, balance this by investing in technology that supports the future proofing process.