Collaboration between business and technology functions with joint accountability for technology-driven business initiatives can help companies deliver long-term sustainable value.
The impact of technology on business strategy, decision-making, and value creation is leading many organizations to rethink the role of technology and reconsider traditional operating models and organizational structures. A recent report from Deloitte LLP's U.S. CIO Program presents a new approach that reimagines technology as a common thread uniting business and technology objectives and helping those functions effectively collaborate, innovate, and cocreate new sources of value.
Joint Business-Technology Strategy
Many C-suite executives recognize technology 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—as they historically have been—cross-functional collaboration is often sparse and siloed execution is the norm. Businesses may define objectives and develop separate supporting technology strategies, and executives may be at odds over which technology projects to pursue. Lacking a macro perspective on 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.
For example, a company's CIO and chief digital officer (CDO) might be at loggerheads because the CIO's focus on reducing technical debt through core modernization appears at odds with the CDO's emphasis on customer experience. Both executives have identified a critical need but are unable to effectively prioritize because neither has considered the bigger strategic picture.
The new approach envisions the company as a multiple-geared engine in which every gear moves in unison so the engine operates efficiently. If a single gear breaks, the entire enterprise grinds to a halt.
This approach emphasizes three dimensions: key business drivers, strategy, and technology vision.
Internal and External Influencers
Key business drivers are internal and external factors that can help shape the future trajectory of an individual organization. These can include strategic imperatives and broader industry and market trends and disrupters that inform and influence business direction.
Strategic imperatives. Strategic imperatives are internal constraints on decisions and choices that business and technology leaders make about business operations. These business goals and KPIs—for example, operational expenses, ROI, earnings per share, profitability, margins, and revenue—are set by the business based on business context and industry and market conditions. C-suite executives juggle many of these imperatives—sometimes proactively, sometimes in response to evolving and often competing demands from shareholders, investors, or board members.
Trends and disrupters. External factors that influence the organization can include investor expectations, new technological advances, industry convergence, market shifts, and changes in customer preferences. Consider the impact of the gig economy, cloud computing, mobility, scientific breakthroughs, and a multigenerational workforce—and the resulting strategic decisions that might arise as a result.
Tech-Driven Business Opportunities
Key business drivers can spur business and technology leaders to collaborate on an agenda for business transformation and a cohesive business-technology strategy. A transformation agenda first uncovers business opportunities and identifies enabling technologies; a joint business-technology strategy can outline the best way to pursue these opportunities based on technology capabilities and investments.
Transformation agenda. A transformation agenda defines the technology-enabled aspirations, mission, and vision of the business and serves as the foundation of a joint business-technology strategy. Using Roger Martin's Strategy Choice Cascade as a guide, businesses can create a transformation agenda and business-technology strategy.
Begin with a bold, winning aspiration, enabled by technology, that identifies for whom the company creates value, the technology organization's ambition level in delivering value and maintaining operational efficiency, and the relationship of technology vision to corporate strategy.
Next, decide where to play. These are business opportunities for which technology can help create differentiated and sustainable value. For example, can technology help reinvent the supply chain, create new customer experiences, monetize the data stack, or improve the M&A process? Then, to determine how to win, consider technologies needed to achieve specific opportunities and, finally, identify required capabilities and enabling technology systems.
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.
A combined business-technology strategy can result in a road map for achieving each business opportunity fully aligned with technology capabilities, systems, and investments. The approach can limit the proliferation of ad hoc technology-driven initiatives that drain resources without furthering company objectives—and create the groundwork for the organization's technology vision.
—by Khalid Kark, research director, U.S. CIO Program, Deloitte LLP; and Bill Briggs, CTO, and John Tweardy, principal, Deloitte Consulting LLP
Next up: The second article in this series will explore the four components of technology vision: the future of work, technology operating model agility, risk and resiliency, and strategic technology investments.
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IT Operating Model
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As business and technology strategies merge and these once-separate functions collaborate to cocreate value for the organization, the traditional scope of IT work is likely no longer sustainable. To prepare for the future of work in technology, CIOs and other executives can focus on the big picture and imagine a three- to five-year future without constraints. This is the second story in a two-part series exploring the future of work.