The financial services industry has seen significant IT spending, with banking and securities companies reaching $564 billion in 2021, as reported by Gartner. Digital transformation investments in the financial sector were also projected to reach $149.8 billion in the same year, according to IDC. Furthermore, 57% of financial services companies planned to increase their CX technology investments in 2020, highlighting the growing importance of customer experience. Amidst this environment, let’s explore five ideas on how large organizations can think creatively about capital budgeting for technology and CX programs in the coming year.
A Deeper Dive Into The New Ways to Think About Capital Budgeting
Let’s take a look at each of these areas and what to think about as you investigate and develop your budget
Focus on ROI in new ways
While ROI is a critical aspect of capital budgeting for technology and customer experience initiatives, it’s essential to look beyond traditional calculations. Consider allocating a portion of the capital budget towards innovative technologies that can transform your business and provide substantial returns. For instance, investing in artificial intelligence or machine learning can automate processes, reduce costs, and boost long-term profitability. Don’t limit yourself to spreadsheets—create proofs of concept or prototypes to demonstrate the value and functionality of new technologies. Consider partnering with leading universities or consulting firms like NovusNorth for research and assistance in creating proofs of concept.
Prioritize Customer Experience
In today’s competitive business landscape, customer experience takes center stage. Think creatively about capital budgeting to enhance your CX initiatives. Allocate funds to personalize experiences, invest in customer service training, and implement technology solutions that improve customer satisfaction. Social media platforms offer an excellent opportunity to engage with customers and gather real-time feedback. Leverage this feedback to develop and implement new customer experience initiatives. Conduct direct research with clients to understand pain points, wish lists, and competitor offerings. Including client quotes and feedback in your strategy and budget planning builds consensus on top investment priorities. Journey maps can visualize the end-to-end customer experience and highlight areas for improvement, both financially and operationally.
Explore New Funding Sources
In the current economic climate, exploring alternative funding sources for technology and customer experience initiatives is crucial. Consider forming joint ventures or consortia with peer firms to address common pain points. This collaborative approach allows all participants to pool resources and deploy funding towards agreed-upon priorities. Crowdfunding platforms like Kickstarter and Indiegogo are popular for raising capital, especially for small businesses and start-ups. These platforms not only provide funding but also help gauge market interest and build momentum before launching a product.
Consider Outsourcing
Outsourcing technology and customer experience initiatives can be a creative and cost-effective approach to capital budgeting. It provides access to specialized expertise and experience that may not be available in-house. For example, outsourcing customer service can improve efficiency and deliver better experiences through skilled professionals. Larger outsourcing deals involving transformation can be structured as self-funding, enhancing liquidity and efficiency ratios while freeing up working capital. Creative contracting approaches can also be utilized for strategic projects, establishing productive partnering models with shared risks and outcomes.
Monitor and Review Budgeting Strategies
Regular monitoring and reviewing of budgeting strategies are essential. Keep a close eye on technology and customer experience initiative expenses and their impact on the business. This enables you to identify areas for improvement and ensure optimal ROI for your investments. The approach you take to measurement of outcomes and business impact is important and enables you to align with your peer stakeholders.
In Summary
In summary, creative capital budgeting is vital for large firms in technology and customer experience initiatives. Prioritize ROI, customer experience, explore new funding sources, consider outsourcing, and regularly review and refine budgeting strategies. By embracing these considerations, businesses can invest their capital wisely, drive growth, and enhance profitability. To learn more about how NovusNorth has helped our clients use these approaches please contact us.
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About The Author
Michelle Palomera
Chief Growth Officer and Co-Founder of NovusNorth
With an extensive career in design, technology and consulting for 30 years, Michelle has helped global firms develop and create market-leading and award-winning digital products and customer experiences. A former leader in several start-ups and public firms herself, Michelle has also led various acquisition, integration and strategic partnership initiatives.
The financial services industry has seen significant IT spending, with banking and securities companies reaching $564 billion in 2021, as reported by Gartner. Digital transformation investments in the financial sector were also projected to reach $149.8 billion in the same year, according to IDC. Furthermore, 57% of financial services companies planned to increase their CX technology investments in 2020, highlighting the growing importance of customer experience. Amidst this environment, let’s explore five ideas on how large organizations can think creatively about capital budgeting for technology and CX programs in the coming year.
A Deeper Dive Into The New Ways to Think About Capital Budgeting
Let’s take a look at each of these areas and what to think about as you investigate and develop your budget
Focus on ROI in new ways
While ROI is a critical aspect of capital budgeting for technology and customer experience initiatives, it’s essential to look beyond traditional calculations. Consider allocating a portion of the capital budget towards innovative technologies that can transform your business and provide substantial returns. For instance, investing in artificial intelligence or machine learning can automate processes, reduce costs, and boost long-term profitability. Don’t limit yourself to spreadsheets—create proofs of concept or prototypes to demonstrate the value and functionality of new technologies. Consider partnering with leading universities or consulting firms like NovusNorth for research and assistance in creating proofs of concept.
Prioritize Customer Experience
In today’s competitive business landscape, customer experience takes center stage. Think creatively about capital budgeting to enhance your CX initiatives. Allocate funds to personalize experiences, invest in customer service training, and implement technology solutions that improve customer satisfaction. Social media platforms offer an excellent opportunity to engage with customers and gather real-time feedback. Leverage this feedback to develop and implement new customer experience initiatives. Conduct direct research with clients to understand pain points, wish lists, and competitor offerings. Including client quotes and feedback in your strategy and budget planning builds consensus on top investment priorities. Journey maps can visualize the end-to-end customer experience and highlight areas for improvement, both financially and operationally.
Explore New Funding Sources
In the current economic climate, exploring alternative funding sources for technology and customer experience initiatives is crucial. Consider forming joint ventures or consortia with peer firms to address common pain points. This collaborative approach allows all participants to pool resources and deploy funding towards agreed-upon priorities. Crowdfunding platforms like Kickstarter and Indiegogo are popular for raising capital, especially for small businesses and start-ups. These platforms not only provide funding but also help gauge market interest and build momentum before launching a product.
Consider Outsourcing
Outsourcing technology and customer experience initiatives can be a creative and cost-effective approach to capital budgeting. It provides access to specialized expertise and experience that may not be available in-house. For example, outsourcing customer service can improve efficiency and deliver better experiences through skilled professionals. Larger outsourcing deals involving transformation can be structured as self-funding, enhancing liquidity and efficiency ratios while freeing up working capital. Creative contracting approaches can also be utilized for strategic projects, establishing productive partnering models with shared risks and outcomes.
Monitor and Review Budgeting Strategies
Regular monitoring and reviewing of budgeting strategies are essential. Keep a close eye on technology and customer experience initiative expenses and their impact on the business. This enables you to identify areas for improvement and ensure optimal ROI for your investments. The approach you take to measurement of outcomes and business impact is important and enables you to align with your peer stakeholders.
In Summary
In summary, creative capital budgeting is vital for large firms in technology and customer experience initiatives. Prioritize ROI, customer experience, explore new funding sources, consider outsourcing, and regularly review and refine budgeting strategies. By embracing these considerations, businesses can invest their capital wisely, drive growth, and enhance profitability. To learn more about how NovusNorth has helped our clients use these approaches please contact us.
RELATED INSIGHTS
-
Product planning and management requires discipline, practical decision making, and flexibility. Learn how product roadmaps are used to achieve success for both short and long term value-added feature releases to customers for a community bank.
By NovusNorth
-
Most projects don’t achieve their goals. Here’s a framework that ensures you can exceed your business and customer goals in your digital product programs.
By Michelle Palomera
About The Author
Michelle Palomera
Chief Growth Officer and Co-Founder of NovusNorth
With an extensive career in design, technology and consulting for 30 years, Michelle has helped global firms develop and create market-leading and award-winning digital products and customer experiences. A former leader in several start-ups and public firms herself, Michelle has also led various acquisition, integration and strategic partnership initiatives.
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