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Tipping Point: Business and Technology Partnership

According to Deloitte, Fifty percent of CEOs said their CIO or tech leader will be the key driver of business strategy—more than everyone who named the CFO, COO, or CMO as their top partner, combined.

The current crisis has inflamed many chronic things. For quite a while, there has been a gap between business and technology teams, living in their silos.  Now the need to close this gap is more acute than ever.  According to West Monroe’s report, collaboration issues between business and technology cause delays in almost 71 percent of the projects, 43 percent projects are delivered with lower quality of work and almost 33 percent miss deadlines.

Malcolm Gladwell argues that the right intervention at just the right time — the ‘tipping point’–  can start a cascade of change and provide a method for developing strategies. To sustain business and survive, now in this down economy more than ever, organizations need solid strategies to bridge the gap between business and technology.Bridge the gap between technology and business

According to Boston Consulting Group, companies from all industries are moving into the tech sector because now it’s all “about becoming technology-driven enterprises with the capacity to capture and capitalize on vast lakes of customer  data and ultimately build the capability to create digitally enabled market-leading goods and services.”  Technology needs to go beyond the enabler function, from supporting personal computers to innovation labs to complex deal evaluations.  According to McKinsey’s 2018 IT strategy survey – “79 percent of companies are still at the early stages of their technology transformation.”  The mid-pandemic survey, however, may tell a different story.

This pandemic has fast-tracked digital transformation across the board and accelerated maturity of many emerging technologies such as Augmented and Virtual Reality, Blockchain, Edge Computing, Artificial Intelligence, and Machine Learning.  These technologies have the potential to create new revenue streams for businesses.  With technology being the main driver of business strategies, technology leaders should feel stronger about their roles in the organization; instead, they often worry about their jobs and live on the edge.  The average work tenure of CIOs is three to four years: they frequently become scapegoats for failed transformation projects.

While CIOs must take responsibility for those failures, the lack of business engagement and contribution in some cases should not be overlooked.  Business should share accountability and should develop a partnership mindset. Just as importantly, technology leaders should think beyond their IT function and extend their influence on the enterprise level.  They must communicate effectively with business partners and C-suites to drive mission-critical enterprise transformations.

Both business and technology are equally important for organizations to reach their full potential. Many of the dot-coms failed miserably in the 90s: they had innovative technology ideas but lacked sustainable business plans. On the other hand, companies without solid technology plans, especially in merger & acquisition deals, missed the target synergies due to increased IT costs.

One of the core reasons for the failed Mergers & Acquisitions was that the business neglected to involve technology from the very beginning, especially during the due diligence phase.  As a result, IT complexity was underestimated, and the necessary costs were overlooked.  Per McKinsey, IT is much likelier to share accountability for digital initiatives when it acts as a partner within the business.

Market leaders typically prioritize customers and innovations in their strategic roadmaps.  A recent report by Deloitte and WSJ Intelligence concludes that high-performing organizations are 2.5 times more likely to prioritize using technology to advance goals. The study also determined that visionary CEOs see CIOs and technology leaders as their primary business strategy partners.  Fifty percent of CEOs said their CIO or tech leader will be the key driver of business strategy—more than everyone who named the CFO, COO, or CMO as their top partner, combined!

Business spends countless hours in understanding consumer behavior, current and future market trends, threats, and growth opportunities. Technology provides the necessary tools and drives innovation.  This partnership does get incremental results, but speed is the demand of the hour for survival in this economy.  Companies can achieve this velocity by bridging the gap between business and technology, which will add efficiency to the process.

APM digest suggests that business and technology need to have better communication.  They should build mutual trust, where technology delivers on time, and business provides the required level of support.  Business leaders should help technology demonstrate business value creation.  Real-time visibility into key business performance indicators such as the end-user performance, resources consumed, service cost, lost revenue, cost of downtime, and the number of successful/failed transactions can keep the business engaged.  Technology should play the role of a strategic partner and enabler of business rather than old-fashioned functional support.

Business and technology should find common objectives and a common language.  They should break down the silo walls to seize the business sustainability and growth opportunities, or risk extinction.  To ensure success, companies must build a business-savvy technology workforce and train businesses to become more technology-savvy.