The enterprise must level up to make room for tech-driven innovation and changing business models, according to a new Forrester report.
The constant and clearly obvious tech industry refrain is poised for change, and a just-updated report from Forrester, "Connect Business And Technology Governance For A Future Fit Technology Strategy," reviews the critical importance for tech leaders to make changes in the existing tech governance "to serve as the platform for tech-driven innovation and changing business models—unlocking new business value across the enterprise and the ecosystem."
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At the forefront for a technology business is the ability to demonstrate it continuously operates as an adaptive enterprise. Organizations in the advanced stages of IT transformation need to merge their tech governance with the company's overall business governance for funding, risk management, and metrics.
Just as technology is ever evolving, with the fear of not meeting challenges, being behind competitors instead of in front of them, and in the extreme, obsolescence, it has to adopt a future-fit tech strategy and address business outcomes "that span the enterprise and external ecosystems," the Forrester report stated.
Key takeaways from the report include how imperative it is for businesses to "create matrixed tech funding through strategic theme teams." In other words, a matrixed organization will divide employees into groups, based on their role in the company, as well as their current project(s). A matrix can be structured with tech pros working simultaneously on multiple projects, with team leaders and managers overseeing the different teams.
The proliferation of digital capabilities render security and risk as core to businesses' strategies, so "a future fit tech strategy must be resilient," as risk management must become a competitive differentiator. An organization can set itself apart from competitors when tech governance makes risk a rote, daily discussion with company leaders making informed decisions to make their businesses stand out among the competition.
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It's imperative that metrics provide more information than performance feedback, and instead focus on "dynamically" driving outcomes in which tech and business connect.
Despite the fact that most companies position themselves as "customer-obsessed" and use that as an operating model, only 15% of businesses have found success by using one. And successful organizations create scalable digital platforms, and adapt business models as they connect customers to evolving combinations of suppliers and assets across enterprises.
An advanced firm puts technology at the forefront "with tech leaders driving tech-led business innovation in pursuit of a customers' future business needs." Organizations that govern tech "serially and separately" from overall business are slowing down opportunities for change; traditional IT thinking now only serves to suppress a firm's advancement.
There is a tendency, Forrester found, for different "operating units" to clash with each other on how to innovate shared tech-based investments. The needs and expectations of "the entire enterprise and its ecosystems" are more effective and valuable when working together. Organizations need to avoid the common problem of infighting and make informed decisions for all teams.
Firms cannot provide quick fixes to problems because they "stall as they fund entire tech stacks to address volatile business changes." All changes should not be treated equally, but assessed appropriately.
According to Forrester's data, tech leaders must use four matrixed governance practices to innovate:
- Fund outcomes with shared accountability across operating units (establish strategic theme teams to advocate for cross-operating unit outcomes, invite active external partner engagement in tech governance reviews, create enterprise-wide governance for multifunction services, fund the experimentation for tech-driven business innovation).
- Set policy to drive adaptive, platform-based solutions (collaborate on architectural standards for multifunction services, create contracts that support flexible sourcing, enable shielded innovation spaces for disruptive tech-driven innovations).
- Position risk as a competitive advantage (foster cultural change, incentivize a speak-up culture, and "automate, automate, automate").
- Use strategic, theme-based metrics to drive integrated tech and business governance (reinforce shared goals that span the enterprise and the ecosystem, reflect customer outcomes, apply dynamic insights metrics to drive actions across value streams and evolve market insights to foreshadow customer's future needs).
Organizations need to "treat advanced tech governance as part of a new operating model" by making advanced, customer-obsessed, adaptive tech governance a strategic objective, and integrate business outcomes into governance-related activities such as strategy.
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