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Digitalizing the Tech Function

The tech function must constantly adapt to support rapidly changing business needs. It is important to reduce complexity where it fails to add value, and to focus on technology risk management, cybersecurity, and setting large technology projects up for success. Technology also plays a crucial role in getting value from PMIs and divestitures—and can occasionally create a stumbling block.

The Tech Function Extends Beyond IT

In a digital economy, technology teams have a fundamental role to play in defining and driving innovation—one that extends beyond IT systems and equipment to the essential processes and strategies of the business itself. By working hand-in-hand with business units to deliver innovative products and services in today’s fast-changing environment, the tech function—encompassing IT and beyond—can do much more than keep the servers up and running. They can shape the company’s future.

Six Drivers to Simplify the Tech Function

Most established companies have a complex legacy of IT systems and processes that have grown organically and now represent a burden of higher cost and lower agility to react to changing business requirements. By significantly reducing unnecessary complexity, businesses can boost their agility, speed, and efficiency. Simplifying IT means eliminating non-value-creating complexity in IT itself and at the interface of business and IT. These six drivers can go a long way toward reducing complexity and simplifying IT:

  1. Intelligent Demand Management. Provide the business with the insight, enablers, and incentives to challenge business-driven IT complexity. This can cut demand by up to 15% and lower IT costs by up to 8% without reducing business value.
  2. Scenario-Based Application and Data Simplification. Consolidate and decommission applications. Simplify the data landscape through such measures as consolidating data sources and defining uniform enterprise-wide data objects. This approach lowers IT costs by up to 20%.
  3. Pattern-Based Infrastructure Simplification. Reduce and reuse infrastructure patterns across applications to minimize the variety of technology processes and skills needed for application delivery. Doing this also increases scalability to meet fluctuating demand, reduces maintenance and change efforts, and reduces IT cost by up to 15%.
  4. Simplified Organization and Enabled Workforce. Reduce organizational spans and layers, and ensure an appropriately sized and skilled IT staff. The result? Fewer skill bottlenecks and quality gaps, improved decision-making speed, and savings of up to 30% on management and overhead.
  5. Effective Governance and Simplified Processes. Apply lean process optimization and agile development methodologies to make IT delivery more streamlined and efficient. This increases development agility, decreases time-to-release by as much as 60%, and reduces delivery staff requirements by up to 40%.
  6. Optimized Location and Sourcing Setup. Leverage shared services for common IT functions and lower-cost locations for routine activities by optimizing the balance of “center vs. line” and “colleague vs. contractor” across the business. This increases resource flexibility and supplier collaboration quality while reducing IT costs by up to 30%.

In this video, Michael Grebe, BCG partner and managing director, explains how to identify and eliminate non-value-creating IT complexity, including dedicated processes and infrastructure.

Platinion

BCG Platinion

BCG Platinion, a core part of The Boston Consulting Group, brings together expertise in IT architecture, implementation, IT project management, and design to help our clients master complexity and deliver results. We connect with and extend BCG’s capabilities in implementation for IT, digital, and cybersecurity. We help our clients successfully complete and realize projects by accelerating implementation, reducing costs, and minimizing risk.

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