Technology is the heart of strategy development and execution. The research conducted in the past decade revealed a growing awareness of the need to incorporate technological issues within strategic decision making. Organizations today have increasingly discovered that technology and strategy are inseparable. For technology has an inner logic that simply must be considered in a company’s strategic planning – that process of creating a concept of the business it is in, identifying its goals and objectives and the long-term policies to meet them, and formulating plans of action.
Technology’s role in today’s business on strategy, decision-making, and value creation are posing companies to reimagine it. That means it’s making them reconsider the traditional operating models and organizational structures.
A recent report as updated in the latest news by Deloitte LLP’s U.S. CIO Program presents a new approach. It reimagines technology as a common thread uniting business and technology objectives. It also helps those functions effectively collaborate, innovate, and co-create new sources of value.
The need for change in the era of Information Technology:
Technological innovation and disruption have rapidly influenced & influencing our business strategy, strategic choices, and value-creation models. Deloitte’s Report cites 5 technology-driven forces that impact all major organization’s decisions. They are as follows:
The fusion of physical and digital worlds has blurred industry boundaries, tangled value chains, and disrupted traditional value creation models.
2. Data proliferation:
Mountains of data and applied intelligence can inform decisions that allow businesses to adapt and remain ahead of disruption.
3. Competing horizons:
C-suite leaders must simultaneously manage today’s business while building the company of the future. Strategic choices made today have long-lasting implications and should be made in the context of a broader and fast-moving ecosystem.
4. Customer empowerment:
Technology has created rapidly evolving norms for engaging customers, triggering turnover and fragmentation in customer experience.
5. Speed and volatility:
The cloud and other technologies have lowered barriers to entry, allowing new business models to be developed and launched in weeks and drastically reducing the shelf life of both competitive advantage and existing business models.
Collaboration between business and IT can help enterprises deliver long-term sustainable value. As per the technology news, many C-suite executives recognize technology today as a force that’s transforming customer expectations; the work, workforce, and workplace; and the way companies are managed. For instance, leaders might correctly identify the need for technology-driven initiatives—such as digital transformation, workforce skills development, cyber issues, or a new technology operating model—that drive business value discretely.
Yet when business and technology functions are separate: cross-functional collaboration is often scarce and siloed execution is the norm. Businesses may define objectives and develop separate supporting technology strategies, and executives may evaluate which technology projects to pursue. Lacking a macro perspective on the latest technology’s capability to transform the enterprise, these leaders may be missing the opportunity to collaborate on, prioritize, and integrate ad hoc technology-driven initiatives to deliver sustainable value.
To maximize the value of technology investments, remain competitive, and drive shareholder value, companies should fuse the business and technology strategies. This would require a new both the functions to partner and co-create new sources of value, data, agility, speed, transparency, and digital experiences. With technology being the catalyst, organizations have the opportunity to either disrupt and transform – or fall behind.
Rethinking technology’s role in today’s business
In the approach suggested by Deloitte in the latest news, which emphasizes three dimensions: key drivers, strategy, and technology vision – the company is envisioned as an engine with multiple gears. Here, every gear moves in unison so that the engine operates efficiently. If a single gear breaks, the entire enterprise grinds to a halt.
Most C-suite executives view technology’s role in today’s business as a source that transforms customer expectations, workforce, and the way companies are managed. However, because many leaders lack a macro perspective on the reimagined role of technology, they’re less clear on how business and technology functions can co-create value synergistically.
Also, executives’ ideas on how to reimagine technology can sometimes be at odds. For example, the chief information officer (CIO) and chief data officer (CDO) of one Fortune 500 company were at loggerheads because the CDO’s emphasis on customer experience was seemingly at odds with the CIO’s focus on reducing technical debt through core modernization. In fact, Each initiative was a potential entry point for the company’s journey toward reimagining technology. Both executives had identified a critical need, but they were unable to effectively prioritize because neither had considered the bigger strategic picture.
The latest news cites the 2 crucial vehicles of change that enable business transformation:
1. Strategic imperatives:
They are key business goals and KPIs—such as operational expenses, return on investment, earnings per share, profitability, margins, and revenue. They help direct and constrain the decisions that business and technology leaders make about how a business should operate today and in the future.
2. Trends and disrupters:
They are external factors such as investor expectations, new technological advances, industry convergence, market shifts, and changes in customer preference.
The significance of strategy-powered & tech-driven cocreation:
A collaborative strategy development process between business and technology leaders can help ensure that technology investments fit into the bigger picture and that business opportunities can be supported by technology capabilities and investments.
1. Transformation agenda:
The transformation agenda defines the technology-enabled aspirations, mission, and vision of the business and serves as the foundation of a joint business–technology strategy.
2. Joint business-technology strategy:
A transformation agenda can unlock many exciting potential opportunities, but leadership may soon recognize the lack of resources or alignment with overarching business goals. In a joint business-technology strategy, they can prioritize opportunities based on differentiation and value. The transformation agenda first uncovers business opportunities and identifies enabling technologies; the joint business–technology strategy outlines the best way to pursue these opportunities within the company.
This creates the foundation for the organization’s technology vision – Tools in the toolbox. This talks about the need to shift to four dimensions:
1. Future of technology work, workforce, and workplace:
As the role of technology changes, so will the technology function. Market dynamics and technological advances are reshaping three major dimensions of work: the work itself, who does the work, and where the work is done. As technology work evolves, the workforce and workplace will likely evolve in tandem.
2. Technology operating model agility:
Changing the operating structure can be an important first step. Next is developing a product mindset. Many organizations have begun this journey by adopting agile and DevOps processes/methodologies but are not yet fully co-creating value in partnership with the business function. But, this would require the joint accountability and seamless blending of the technology & business operating models/processes.
3. Risk and resiliency:
As technology today becomes more integrated, cyber risks often rapidly increase, moving beyond an organization’s walls and IT environments and into its products, factories, other workspaces, and customer locations. Today’s attack surface is larger, and the business impact of cyber risk is far greater than in the past. In the event of a cyber incident, businesses should have a robust capability to detect and respond to threats and ensure operations are minimally affected. Integrating security into product design and development can help minimize unpleasant surprises.
4. Strategic technology investments:
Business leaders often consider technology investments to be a “black box;” they know how much is being spent on technology but may not have a deep understanding of budget allocation or the value or ROI delivered. Technology’s role in today’s business should provide a solid foundation for future business growth, with strategic capital allocation and transparent investments that have clear metrics and accountability.
When technology and business leaders mutually agree to co-create and engage in innovation – they begin to reinvent what technology can do for the business and view technology as an opportunity to enable business disruption and create sustainable competitive advantage.
You can do this by creating sustainable business value and actively engaging business functions with ideas and prototypes that help stimulate innovation. This will happen only when you acknowledge that technology’s impact goes beyond the company’s IT function, and that technology is the heart of strategy development & execution.
Technology today demands you to stay on your toes when it comes to adapting to all the recent technological developments. TechVersions is on a constant mission to help you stay updated with the latest technology news and trends.