Disruptive digital technologies are, true to their name, massive drivers of change in business, but many organizations are not set up for digital success.
Despite ambitious digitization efforts, many leaders are disappointed to find that their IT function isn’t prepared to leverage the emerging technologies that drive digital disruption and economic change. As a result, their companies are struggling to reinvent products and services, meet changing customer demands, and keep pace with digital competitors.
IT functions must be transformed into world-class technology functions. To do this, digital must go beyond IT. Companies need to build up digital capabilities and increase efficiency and simplification, across the board. By embarking on this journey, leaders don’t just envision the company of the future—they create it. Crucially, IT systems are treated as a strategic partner and a digital business enabler, not a service provider.
Companies can improve their IT efficiency, agility, capabilities, and security with a world-class tech function.
When working with clients, we first assess the maturity of the tech function, especially the company’s baseline digital capabilities—including the clients’ levels of efficiency and simplification—and compare the results against benchmarks. Next, we interview key business-side stakeholders about the tech function’s performance. On the basis of that analysis, we develop a heatmap to pinpoint digital strengths and weaknesses so that leaders can define their goals and target prime areas for optimization. Our world-class tech function assessment has been applied to more than a thousand clients around the world and across industries.
Our digital maturity assessment, the Digital Acceleration Index, complements the world-class tech function by allowing companies to assess their overall digital maturity across 36 categories (beyond the tech function) and compare their digital performance with that of peers, the industry average, and best-in-class digital leaders.
In the execution phase, our tech function consultants work collaboratively with clients to build new digital capabilities while simplifying IT systems to drive cost savings. We focus on boosting resilience to a variety of adverse developments, including cyber attacks, crises, and economic downturns.
Our data and digital platform offering allows companies to modernize IT and launch digital services without revamping all of their IT architecture at once. A data and digital platform generates value quickly so that organizations can create digital capabilities and avoid getting bogged down in large IT systems.
Our approach starts with pilots and rapidly scales up to a comprehensive digital transformation. All new initiatives and adjustments are embedded in a transformation roadmap for the tech function, and the company selects KPIs to track the progress of individual initiatives and the success of the transformation. We also activate our specialty businesses in the execution phase:
BCG Platinion, accelerates digital excellence by designing and engineering new digital products and services as well as architecting scalable platforms to enable digital technology capabilities for clients across industries.
BCG Digital Ventures goes beyond providing consulting, design, and technology services to form strategic venture teams in order to rapidly develop, launch, and grow transformational digital products, platforms, and businesses.
DigitalBCG Immersion Centers take clients beyond a traditional experience. They allow you to see firsthand how digital will impact your company and your strategy—and the changes you will confront along the way.
Tech efficiency, or IT simplification, is becoming a high priority for the C-suite, as IT represents 0.5% to 15% of revenues. With our approach, and with funds yielded by efficiency improvements and increased effectiveness, companies can also rapidly adjust tech function priorities and budgets to support the digital transformation needed during this unprecedented economic uncertainty. A world-class tech function ensures this rapid “tech or IT cost takeout,” which can reduce IT costs by 5% to 15% within 12 months.
Working with BCG’s tech function consulting team, clients have achieved a rise in customer satisfaction and return on digital investment, delivery times (including faster time to market and shorter cycle time) that are two to four times faster than was previously possibly, a 15% to 25% reduction in software development costs, and a 15% to 20% shift from indirect technology activities (such as overhead) to direct technology activities that add immediate value.
With artificial intelligence, companies can more proactively—and more efficiently—manage IT incidents, saving time, reducing costs, and sparing users a lot of frustration.
Companies must begin treating the department as a strategic business partner instead of a service provider—fundamentally changing their mindset.
It will be virtually impossible for traditional ERP to manage the anticipated huge growth in e-commerce and the need for flexibility and speed.
Simplifying IT is an essential task for any IT organization that wants to stay competitive. It is also a critical foundation of digital transformation.
