EY Tech Connect

On this episode of EY Tech Connect, members of the EY Strategy and Transactions team, experts on capital allocation, explore the successes and pain points tech companies are experiencing and what needs to change.

We’ve seen the tech sector hit near record highs as tech companies increase their value chain exposure, drive disruption and transformation across sectors; on the surface, everything looks great. But are there hidden challenges that some of the recent successes may be obscuring?

The EY Team explains why now is the time for Tech Companies to pause, reflect and strategize differently.

Capital allocations is a broad topic; when we talk about capital allocations, our focus is on assessing, planning, reviewing, and prioritizing the uses of financial resources across an organization. Some categories we explore are; debt repayment, dividends, capital investment, sales and marketing expenditures, share repurchases, acquisitions, and R&D. EY finds that it’s imperative to develop a framework that consistently evaluates these investment decisions and monitor the progress on the basis that really allows executives to prioritize the many choices and demands on their capital.

Join Barak Ravid, EY Global TMT leader for Strategy and Transactions, Ryan Citro, EY Partner, Erika Maymon, and Akhilesh Kulkarni from the EY Strategy and Transactions team to discuss capital allocations and the actions Tech companies should be taking now. Hosted by our EY Tech Connect Moderators, Adrian Baschnonga, Lead Analyst for Telecommunications and Christina Winquist, TMT go-to-market strategy lead.

Key Takeaways include:

• For additional information: EY.com/techcapitalallocation.
• What do high-performing tech companies need to consider when thinking about their capital allocation decisions?
• Have a rigorous, well-defined process that includes governance.
• Review the company's long and short-term objectives, risk appetite, and return requirements.
• Have a live tool to continuously enter new data and adjust assumptions to stay responsive and agile.
• Aligned data to your business drivers and KPIs to allow ongoing tracking and performance monitoring.
• The process should ultimately be applied in a consistent manner through the company to ensure it remains sustainable with data you can interpret across the organization.