What trade-offs are you making, if any, between innovation investments and operational efficiency? How do you make the case for strategic investments when many are focused on cost containment?
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I believe there is a false dichotomy in viewing innovation investments and operational efficiency as mutually exclusive. In my experience, particularly at a private equity-owned firm where EBITDA is a primary focus, we can improve EBITDA by raising revenue, lowering costs, or sometimes both. AI, for example, can deliver greater value to customers or enable us to do more with fewer resources, which helps us maintain pricing and deliver additional benefits. Even when the focus is on cost containment, as long as it is not simply about slashing budgets, these efforts can be innovative and contribute to building the business in new ways.
For us, we are actually trying to do both, invest in innovation and maintain operational efficiency. Our financial situation has afforded us the opportunity to pursue both paths, but it really comes down to focus. As we scale the business, the key question is always, “How do we grow smarter?” Automation is a part of that answer, but we also need to establish foundational capabilities. We are working to put those in place, while also pursuing innovative initiatives that can drive short-term value without requiring extensive effort, though they may require investment.
The biggest challenge is prioritization: deciding where to place our bets. Some investments are critical baseline capabilities, while others are more advanced. Currently, we have significant projects underway, such as a major SAP implementation, a CRM upgrade, and a large field service initiative. We need to accomplish all of this while continuing to support growth. Ultimately, it is about determining what we can do within a constrained timeframe and with limited resources
I agree with everything Larry said; it really comes down to prioritization and evaluating what will deliver the best ROI, while also considering our capacity for new initiatives. There are always ongoing operational needs that must be addressed, so every year is a balancing act. This year, we have focused heavily on tool consolidation. In the early days of the company, many tools were purchased without much oversight, leading to inefficiencies. Over the past several years, our focus has shifted to adopting enterprise-level applications that can scale with the business. By consolidating tools, we are able to free up resources to fund future investments.
Prioritization is always a challenge in technology, especially with the increasing impact of AI. Recently, we established functional and technology Centers of Excellence (COEs) for areas like ERP, digital, and front-end support platforms. We also created an AI Factory COE to improve governance, security, and overall management as we integrate AI into our processes, people, and programs. This structure helps us avoid bottlenecks and ensures that while we leverage AI to elevate our operations, we are also controlling and aligning these efforts to create value for the customer.