Tech-enabled Business Strategy: Planning for the Future
Companies need to reimagine their relationship with IT in order to achieve true Digital Transformation.
Over the last three decades, the way companies do business has undergone radical change as a result of the evolution of digital technologies.
However, the vast majority of these changes have related to how companies operate: digitizing inventories and HR data, communicating through emails and videoconferences, remote work, e-commerce and digital marketing – the list goes on.
What this means is that digital technology has been used as a tool in order to better realize strategic goals and optimize operations – and not as a guiding influence on how to conceptualize and develop actual business strategies.
While this approach has served many businesses well until recently, for many companies it is no longer sufficient, if they are to thrive in the future, digital-dominated economic ecosystem.
The extent to which tech has evolved and infiltrated the way businesses, societies and the world in general operate, means that in order to succeed in the future, digital technology and its vast potentialities need to be more actively considered and factored into business strategies.
How can companies achieve this? Meet the Tech-enabled Business Strategy.
What is a Tech-enabled Business Strategy (and why is it needed)?
The conventional, most widespread approach companies apply in managing their digital strategy is to develop them in parallel to their broader business strategies.
However, the new, heavily digital global marketplace has made the need for a more unified, holistic approach more critical.
According to global consulting firm Deloitte, there are six key drivers that have made the need for a greater merger of technology and business strategies, which are:
- Convergence – the blurring of the lines between the digital and the physical market, creating entangled supply lines and value chains and breaking down pre-existing industry boundaries.
- Data proliferation – companies need to find ways to process, understand and apply insights from increasingly vast amounts of data generated through customer interactions and their own operations.
- Competing horizons – today’s business leaders often need to balance the management of their company with strategic planning for an unknown and disruptive future.
- Customer empowerment – digital technology has created a much more dynamic and multilateral ecosystem for customer engagement, presenting both challenges and opportunities for companies seeking to improve customer experience.
- Speed and volatility – as new disruptive technologies continue to emerge at increasing rates, businesses need to be prepared for continuous change and shifting business landscapes. They need to be able to take advantage of new opportunities, and to not rely too heavily on competitive advantages that can be quickly eroded by new developments.
Companies that have so far separated their technology strategy from their business strategy will need to find new ways to merge the two together, in order to be better organized, structured and directed towards succeeding in the digital world.
This can allow businesses to make better use of IT resources in order to efficiently utilize data, improve customer experiences, optimize supply chains, become more resilient to disruption, and ultimately improve their financial performance.
By successfully merging digital strategy with a broader business strategy, companies can use these assets to create value that cannot be captured if they are operating separately.
These are the basic principles of a tech-enabled business strategy.
The more complex question is: How to Achieve it?
By creating siloed business and digital strategies, companies often miss out on opportunities to better leverage technology in business operations. Merging digital and business strategies can allow a recalibration of strategy in a way that uses and serves the increasingly digital dynamics of different markets.
However, it’s not an easy task, or one that can be answered by outdated ideas about digital transformation.
While most business owners are aware of the need for a digital presence, optimized digital communications and operations, these initiatives are often pursued in an isolated manner that does not fully grasp the ‘big picture’ of how to recalibrate business strategy with digital.
In order to achieve this, companies need to reimagine their relationship with technology: how they understand and approach it, and how they use it to grow.
The first step is to identify a clear, high-level goal on how technology can be better used to serve your business strategy. For example, can technology be better used to improve customer experiences, use data or improve supply chain management?
Exploring these ideas will involve bringing in a company’s IT team to present and explore areas of a business’ operations that can benefit from tech, and ideas of how technology and business strategies can be better fused to serve each other.
Once these target areas have been identified, it will be time to begin exploring how digital technology can be used to improve them, and to factor these improvements into the overall business strategy.
This process can create a framework for planning business strategy in a way that leverages existing IT assets, and by identifying areas that can be improved or optimized by using the digital capabilities of a company.
The important point is that it creates a system of collaboration and communication between the IT backbone of a company and its management that constantly seeks to explore ways to better use digital in order to improve performance.
A Note on IT Assets
While large companies often have the resources and needs to maintain internal IT teams that they can work closely with on developing a tech-enabled business strategy, this is not the case for all – and one that we don’t believe is essential either.
Companies that partner with professional IT providers can just as effectively develop a more holistic digital-business strategy – the important point is that your IT provider understands your business needs, and is able to offer flexible and imaginative IT solutions for your specific needs.
Indeed, external IT providers are often even better placed to offer solutions that they have experience with through their work with other industries and clients, which may not be as accessible to internal teams that can get stuck in a fixed pattern of conceptualizing technology.
While the actual process of realizing a unified digital-business strategy can be a complex undertaking – and there are many different points and approaches to consider when attempting to realize it – the key point to remember is that it should involve a closer collaboration between your tech talent and your company’s strategic management.
At Bocasay, we work with a wide range of clients from different industries, helping them envision and build the digital assets that can form and guide their success in their respective markets.
Do you have an ambitious plan to create greater synergy between your digital and business strategies? Get in touch and we’ll be happy to discuss how we can make it happen.