The democratization of new technologies has brought the same growth opportunities within the reach of small and medium-sized companies as those of Fortune 500 companies. This represents an enormous opportunity for mid-size companies to position themselves differently and expand their reach, potentially reaching any corner of the world with their products and services. The levels of competition that mid-market companies are experiencing puts them in a challenging position: they must modernize their foundations to be able to innovate and beat new, disruptive startups, and avoid future slowdowns for their growth.
However, there is no reason to go for the “or” when you can opt for the “and”. The elaboration of a technological roadmap with a strategic vision allows tackling both problems in an orderly manner, with clear prioritizations, continually listening to what the market is asking for at any given moment. One of the great obstacles faced by medium-sized companies is how to reshape or break guidelines that brought them to where they are today and allowed them to grow, or as the saying goes: “What got you here won’t get you there”. We are talking about companies with up to two or three decades in the market, usually with a very strong presence of their founder and a remarkable tendency to say “we have always done it this way” when faced with any suggestion of change.
The roadmap also supports the way we face the customers and could bring new opportunities with private equity investors, two of the key pieces of this puzzle of success.
On the client’s side, the market is changing and the consumer is transforming. No user is willing to wait 45 days to be approved for an insurance policy, within the framework of a company that has dozens of manual and error-prone processes in the middle – credit assessment of the applicant, history, data entry, approval, paperwork that comes and goes – if they know that a startup will take them to the same result in a few days and in just a few clicks, thanks to the availability of an app that digitizes and automates the entire flow. Leaders of mid-size companies should have in mind that startups have access to the same technologies as they do, but they lack the market share and years of experience. Capitalizing on these last two thanks to innovation could be a clear differentiator and a competitive advantage for these companies.
One of the big problems we usually find is that the medium-sized company doesn’t see this situation until it’s too late. Confident of the strategies that yielded successful results in the past, they seem to operate forgetting to look over their shoulders until it is too late. For example, they might find themselves in tricky situations like an unexpected drop in revenue or number of customers, or a competitor gaining market share.
Fear of losing customers cannot be an excuse to take false steps. If the company is truly established in the market, it can leverage its strengths to go through a thoughtful and strategic technological roadmap. Having a strategy is a must, not an option.
The technological roadmap helps to avoid the gap between good results and surprises because it keeps the company in a competitive shape. At the same time, it also shows the order and vision for the future of a company that wants to evolve from a small business into a bigger enterprise.
This projection is a good sign for investors looking for organizations where they can inject capital and unleash the potential of the firm.
Private Equity investments are an external factor that generates pressure on the C-level and allows the company to “force” itself to rethink processes, review opportunities, and rethink everything that is performing poorly or sub-optimally. This brings about the change of mindset necessary to adapt to the new paradigms and presents a new scenario in which technology is applied and modernization is embraced thoroughly. This results in the improvement of internal processes, the increase in the quality of the user experience, and the appropriate time-to-market strategy to get the results in different stages of the customer lifecycle.
Relying on differentiating factors, such as market insights or the customer database, the challenge, then, is to find the balance between scaling the type of technology used and, at the same time, offering innovation to the end customer. It’s not a matter of implementing Artificial Intelligence or machine learning on day one. There must be a robust plan aimed at reducing risks, understanding what value each of these technologies will provide, and incorporating them when appropriate. Another factor that adds fundamental value is having a technology partner’s perspective on the matter: the experience of how similar problems have been solved in other companies, the ability to analyze outside the box, and the ability to build a long-term project from smaller to larger blocks – perhaps starting with a zero-risk proof of concept – are key elements when applying technological innovation to a company.
The project is considered a success not only when innovation is implemented, but also when there is a change in the mindset that makes it possible to constantly focus on the iteration of products, proposals, services, etc., regardless of the size. All of this is done in an agile context: test, gather feedback, evaluate, and execute again. Having a technology roadmap is a must for every company that wants to stay competitive and have the necessary tools to be ready to act accordingly when markets evolve. And the evidence suggests they are always on the move.