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Transformation in Tech

Moore’s Law, data explosion, the Internet of Things, software dependence, cloud computing—so much has changed, is changing, and will change that the industry can barely keep up. Yet many companies are following the same business models they’ve had for years, even decades. At key inflection points, business model innovation is necessary for survival.

People Are Becoming More Interconnected
According to the Consumer Electronics Association, the average household had 28 consumer electronic devices in 2013, up from 17.4 in 2000. As people and devices become more connected, the industry must respond with faster connections, greater interoperability, and increasingly widespread and untethered access to data.

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The first is funding the journey. It’s important to pull the right short-term levers in order to sustain the transformation and fund new growth engines. The second is winning in the mid-term. CEOs and their leadership teams must describe an aspirational, engaging, fundamentally different value proposition that leads to mid-term revenue and earnings growth. And the third is developing the right team, urgency, organization, and culture. It’s essential to prepare the organization to execute and sustain the transformation. 

BCG can help businesses successfully navigate these issues. We focus on five elements of enterprisewide transformation:

  1. Diagnostic. BCG’s extensive toolset allows for rapid diagnostic audits, such as strategy and profitability audits. A strategy audit can highlight gaps in the value proposition and business model. By analyzing a company’s market-segment attractiveness and competitive position, the strategy audit can identify key market trends, likely impacts on the business model, and potential areas of sustainable differentiation. A profitability audit is designed to highlight a company’s financial, operational, and organizational opportunities. The audit applies key profitability measures to determine whether the company is meeting market requirements
  2. Plan Development and Prioritization. Using building blocks that were defined in the diagnostic phase, companies can create a turnaround plan that will build an organization capable of supporting the new strategy. That includes people, structure, and processes. It’s important at this stage to prioritize the elements of the road map and consider variations of the plan.
  3. Implementation and Delivery. Companies can implement the plan using tools that can be applied throughout the organization. Specific areas ripe for change might include productivity, pricing, data and analytics, salesforce effectiveness, omnichannel strategies, innovation, and digital. For example, customer experience maps could prove valuable for sales and marketing. Other tools might be more applicable for a company’s operating model, organization, or culture.
  4. Smart Simplicity. Many organizations try to create value and achieve competitive advantage by layering on more procedures, structures, and scorecards. But in fact these methods lead businesses to spend more time managing work and less time focusing on value-producing activities. Smart Simplicity improves performance by managing complexity and improving agility. It ensures that transformation is successful over the long term by designing the right behaviors to support the organization’s strategic goals and make change stick.
  5. Project Management Office (PMO). There are risks involved in managing a turnaround. It’s important to approach the effort as a series of individual projects that can be executed independently. That will make it easier to evaluate initiatives and recommend stopping, accelerating, or combining existing efforts. Actively managing the risks allows you to maintain a forward-looking perspective of what might go wrong. It’s also vital to pay full attention to the human element. Create a clear picture of what the change is, why it’s needed, and how people will be impacted.

Read More About Digital Transformation in Tech

The TMT Digital Transformation Journey

The TMT Digital Transformation Journey

The greatest shortages at most companies are not in technological know-how but in leadership, the resolve to change, and the skills to rebuild around approaches such as agile.

Technology Industries
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