In 2014, when I submitted my presentation titled, “Transforming Business-driven to Technology-driven Organizations” to an annual technology conference from Oracle, the title received some resistance from some business and technology leaders alike.
Their argument was “How can organizations be led by technology when technology is just an enabler? The technology provides solutions to business problems; therefore, organizations are business-driven.” This argument makes a lot of sense in organizations that think of technology (or IT) simply as their backbone of achieving operational excellence. Solving the business problem of accurately and expeditiously triaging customer contracts using OCR (Optical Character Recognition) technique, is an example of operational excellence.
However, just having operational excellence is not enough to respond to the threats of disruption or delighting customers. Organizations must be technology-driven to recognize disruptions, respond to them, and capture new markets. This requires current technology leaders to be business leaders. They must think about how to grow the company revenue while keeping an eye on their internal technical landscape and strengths.
Undeniably, we live in a digital economy where everything is hyperconnected and we have the tremendous computing power to process data. AWS, Microsoft Azure, and Google Cloud Platform have leveled the playing field, enabling the smallest of the companies to compete with large organizations. Top management schools provide programs in artificial intelligence (AI), blockchain, and data analytics, to prep the next generation of business leaders on technology.
Therefore, it is imperative for technology leaders to not pride themselves on building moats using technology. The new tech leader must focus on value creation and value realization. Value creation requires looking at how existing business models are getting disrupted in favor of new models that remove existing customer pain points and also attract new customer segments.
For example, the traditional auto insurance industry model of charging a monthly premium to individuals whether they drive regularly or occasionally was disrupted by a company called Milewise, later acquired by Allstate. Milewise from Allstate provides pay-per-mile car insurance catering to infrequent drivers. Technology leaders should be building innovation centers dedicated to experimenting with new business models. They should then demonstrate and test those learnings in the market, alongside startup companies to remain competitive.
Tech leaders in large organizations must pivot from their current role of just being custodians of IT to proactively understanding their customers to effectively design products and services around them. They must identify ways of using technology to tap into the next generation of customers.
For example, tech leaders may leverage different social media channels, such as Instagram and TikTok, and partner up with influencers in those channels to discover new customer behaviors and trends. Based on these trends, technology leaders must identify solutions that will delight their customers. Companies like Wayfair had started experimenting with emerging technologies such an augmented reality (AR) and now provides a mobile AR app for their consumers to visualize furniture in their homes before purchasing.
Keep in mind, ever-changing and evolving customer behavior has been accelerated by COVID-19. Besides changing customers’ purchasing capacity and channels of distribution, it has accelerated the adoption of the do-it-yourself (DIY) mindset. The new tech leader must account for changing geopolitical, socioeconomic, and diversity landscapes when launching new offerings into the market.
As technology leaders become business savvy, the partnership model changes from technology-business to simply a business partnership. The new tech leader has the onus of bringing together the talent across different silos to build integrated technology solutions that enable the organization’s agility to respond to current market trends. Additionally, the leader needs to look externally to establish partnerships with companies that can help bring new capabilities and augment internal talent.
As the new tech leader focuses on achieving operational excellence, responding to disruptions, and building partnerships, the overarching mission should be to enhance the customer value proposition.