The Key to Success in Tech Transformation

In this article, you will learn the components of a tech transformation and how to help the digital endeavours in a tech transformation create value. You will also discover the key to success in tech transformation.

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What is Tech Transformation?

Tech transformation, also known as 'digital transformation', is the cultural, organisational, and operational change of an organisation through the integration of and with technology, processes, and competencies.

Digital transformation uses technology to innovate products and processes, create value and new services for various stakeholders and acquire additional capability to quickly adapt to customers and the external environment. By reshuffling how your company works with products and platforms, a bridge between technology and business can be built.

The MIT Sloan Management Review argues that customer and user experience, operational processes, and business models are key areas when promoting tech transformation.

The development of new necessary skills and ways of working revolves around the ability to be more flexible, people-oriented, customer-centred, efficient, and capable of exploiting data's potential.

Tech Transformation: Teams, Products, and Platforms

Linking tech transformation with business operations is often challenging according to Boston Consulting Group. McKinsey suggests that the components of a successful endeavour consist of (1) involved teams focusing on technical products, (2) the transformation aligning with business objectives, and (3) the company helping teams prioritise tech work.

It may seem easier to create a silo of "tech innovation" that is detached from the rest of the company. In this silo, new ways of working and new ideas can flourish. However, the issue arises when the silo is not "plugged into" the company, leading to planning, coordination, and cooperation not functioning as efficiently.

With that said, the company should be prepared for and open to the possibility that tech transformation may necessitate new forms of governance and that the corporate culture both faces challenges and may need to evolve.

A key to success in your company's tech transformation may involve building agile groups within the IT department that are more cross-functional than before. It could also be beneficial to organise tech teams around products, with the user and the underlying platforms that enable them in focus.

It is also worth combining cross-functional teams that work agilely with new technology aimed at creating business value by improving the user experience, with more traditional IT specialists who develop and maintain the core business.

Companies with this type of integrated or digital business model are 30 percent less likely to encounter challenges in their digital transformation efforts and 60 percent more likely to say that their company's investments in technology create business value.

Map your company's technology activities and assets into two categories: (1) products and (2) platforms. Then create teams dedicated to specific products or platforms as much as possible.

"Products" are technology-based offerings that are purchased or used by customers and employees.

"Platforms" are back-end systems that drive and enable products and the company. Examples include Resource Planning software, CRM systems, databases, and integrations with suppliers.

Hypergene, which can be seen as both a product and a platform that aids your tech transformation with Strategic and Financial Planning, can act as a database and help you bind your data together through integrations with other suppliers.

How Tech Transformation is Managed

Your company likely has an existing governance model and processes for planning and monitoring operations. The governance model for tech transformation should fit within your existing governance model and may sometimes challenge it.

Therefore, you need a governance structure to be able to plan and focus the work within the technology organisation in relation to the other strategic priorities of the business.

Who is in Control?

The management team should include senior technical staff in Strategic Planning. Among companies that perform best in tech transformation, 57 percent say their "senior technical leaders" are heavily involved in strategic planning, compared to 17 percent of those who perform the worst.

Depending on what suits you, roles such as Product Manager, Platform Manager, and Infrastructure Manager may be important in the organisation. These roles can be seen as symbols of the balance required between IT and business.

Systems and infrastructure have often been at the helm when it comes to tech investment priorities, but today we are increasingly seeing infrastructure take a backseat in favour of (A) digitising the end-user experience and (B) data and analysis.

All teams in the new way of working should have a team leader. The product-oriented teams should have someone who is business-oriented and the platform-oriented should have someone who is technology-oriented. Ideally, they should also have experience of and/or a good understanding of the other perspective to ensure effective collaboration.

Key Performance Indicators (KPIs)

The KPIs are set together with those who strategically control the business and should be focused on measuring value creation and productivity.

Tracking and Reporting

Measurement can be performed at different levels. The team leader can, for example, be involved with staff planning and a Kanban view of the team's commitments, and those who see the measurement in relation to business goals should be able to see the tech transformation in relation to the rest of the organisation.

These individuals can be an analytics team, Controllers and/or managers throughout the organisation. Here, automated reports facilitate the review. The focus should jointly be on removing barriers that prevent the KPIs from being achieved.

New Model for Financing

Gradually moving away from an annual budget that is set annually to adopting a more Agile Budgeting and resource allocation is preferable. This way, your company can tie goal achievement to resource allocation in a way that can be adjusted over time - and also better justify the investments.

A more agile management of the budget ensures that money is not invested in the wrong areas because the budget has a lifespan that is too long in relation to the priorities.

Prioritise and Deliver Work

Prioritising and coordinating the delivery of value-creating digital activities is a challenge. There is often a scramble for internal digital competence. Therefore, prioritisation and structure are important for managing demand.

General Lessons

Transforming your company to be active and innovative in tech creates value. Even if your company does not sell consumer products, you have internal users and can enjoy the benefits of the tech transformation.

McKinsey highlights seven important lessons about what creates value in a tech transformation from a survey:

1. Technology investments create significant business value.
2. Human-focused initiatives provide the most value.
3. Attracting, activating, and retaining tech talents is both challenging and important.
4. The talent challenge requires looking outside the company.
5. Those who succeed see a snowball effect.
6. Broader use of advanced technology creates greater value.
7. Build partnerships between technology and business.

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