A Perspective on Defining Technology Strategies for Digital Transformation
Businesses around us are changing the way they look at the needs of their customers. Their products and services are adapting rapidly to demands of a much more connected, informed and demanding customer. The “Digital Age” we live in doesn’t just affect the way businesses respond to their customers but also how they collaborate with their suppliers and manage employee potential. Ability to access, store and analyze data from various sources to generate meaningful insights is redefining the way we think. Role of technology has never been more significant in fueling many of these perspectives.
The biggest change is that business leaders are far more willing to learn and adapt to technology led transformations. While at the same time, technology leadership can no longer be seen as specialists of software and hardware. It is in this context that technology leaders now increasingly look at their portfolio with a strategic mindset.
Perhaps one of the ways to see this is across “What value” a technology asset delivers against “How” it’s delivered. Let’s be aware that technology sourcing is now dramatically different from conventional outsourcing and technology leadership needs to evaluate its relationship in a fresh light of skills, innovation and associated costs.
Technology strategies can thus be centered on four quadrants or patterns that allow for establishing a long-term vision. These quadrants can further help a CIO define the enterpriser architecture, organizational model, skills requirements and sourcing strategies for the organization.
A) Enterprise or Legacy / In-house Portfolio: These are traditional enterprise applications established by organizations to store core business processes and information around customers, suppliers and products. While new investments in these systems would be very case driven, it is crucial for technology leadership to effectively maintain and transform legacy technologies to adapt to digital fronts.
Strategic Focus: Modernize for digital integration, leverage automation and consider cloud migration evaluating information security risks
B) Enterprise/On Cloud Portfolio: Over the last few years, companies have adopted cloud based “As a Service” propositions especially in enterprise functions such as HR and Payroll. Sales Forces platform has allowed companies to launch sales and customer services much faster in a scalable model. Benefits of cloud-based services supported by major players outweigh the perceived security risks driving organizations to adopt these “As a Service” models rapidly. Organizations, however, need to consider a robust integration strategy to plug and play these services.
Strategic Focus: Invest in business integration platforms, define information security controls
C) Emerging technologies / In-house Portfolio: This quadrant is really about the technologies and solutions that are trending in the industry, where business benefits, technological complexities and long-term usage is debated. One of the senior stakeholders represented these as “solutions that are awaiting a problem statement”. From an IT leadership standpoint you need to keep a close watch and invest carefully. Business today may be eager to hear and experiment with some of these ideas and would like their technology leadership to be at the cutting edge. Many of these areas are aimed at providing a competitive advantage and hence, most of the organizations may consider an in sourced model here.
Strategic Focus: Adopt fail fast mechanisms; go for POC approaches to establish business value
D) Emerging technologies / Remote Cloud Portfolio: Today, many business services are offered on technology platforms supported by associated business processes. Business leaders are keen to take advantage of the benefits of such services as the proposition revolves around low CAPEX and faster time to market. Technology leaders need to be wary about potential information security risks and the doubtful future of such businesses that are based on entrepreneurial startup models. On the other side, an interesting change is that technology organizations are now successfully inventing new revenue streams by creating multi-tenancy services that they sell, making IT contribute directly as revenue-generating business unit.
Strategic Focus: Define information security strategies after carefully identifying and protecting critical information such as customer credentials, create a backup redundancy plan for business continuity
The role of the modern CIO is changing to that of an evangelist who is able to influence the future business model. The “I” could stand for Innovation, Intelligence or Information but what remains common is the CIO’s ability to provide a competitive edge to the business.