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Is aligning your business with technology investments enough? According to Straight Talk's data, co-evolution is the future of IT strategy. Companies need to do more than just alignment.
By Pragati Verma, Contributing Editor, Straight Talk
As a CIO, you must always align your technology investments with your business, right? Not quite, according to an expert panel of leading technology practitioners and thought leaders at the 2019 MIT Sloan CIO Symposium.
Joe Peppard, principal research scientist, MIT Sloan Center for Information Systems Research opened the discussion on Co-evolving is the Future of IT Strategy by challenging the notion of alignment. “Is the concept relevant today? Or has it actually outlived its usefulness?” he asked. According to him, the concept of co-evolution between portfolio of technology investments and strategy is more appropriate today. “You are not looking to co-evolve with business. You are looking to co-evolve with customers and ecosystems,” he added.
Get Ready for Algorithmic Age
Vivek Gurumurthy, senior vice president and CIO, Verizon Communications Inc.'s consumer group, who is leading a three-year modernization plan, explained why co-evolution is the more relevant concept: While technology is shaping business and customer experience, “technology itself is shifting” too. And as part of that journey, he expects to deliver a series of transformations simultaneously. “We have to transform our technology, customer experience and culture of the company. We need to reskill employees, be lockstep with the business and transform ourselves from a order-taker to a strategic partner. We want to take this to an IT-driven business strategy,” he elaborated.
At Verizon, these transformations have come with restructuring. “We are now organized by the customer rather than by the network and technology,” he said. Emphasizing that data drives their relationship with customers, he said, “We have moved past the digital age and we are now entering the algorithmic age.”
In this algorithmic age, it’s hard to separate IT strategy from business, according to Belkis Vasquez-McCall, a partner at McKinsey & Co.'s McKinsey Digital Labs. She said that she is seeing “more and more one end-to-end strategy within IT and business across sectors and industries.”
Gail Evans, previously CIO and now CDO at consulting company Mercer, agreed, “We want to be at the table, we want to be creative, we want to be innovative and we want to accelerate,” To her, their IT team is like a business partner thinking about strategy for their clients and “not some drive-by technology team that they might want to engage with sometimes.”
What comes first: Tech or Strategy?
Peppard triggered a fair bit of discussion, when he asked how do they keep technology investments relevant in the age of co-evolution. For Gurumurthy, the key is to anticipate the needs of the business. He went on to point out the best way to do that — “Put ourselves in the shoes of the customer” and “Think of what customer will like to see in future.” He explained, “If the business is headed in a certain direction, IT has to skate to where the puck is going and not start skating once the puck has passed. Otherwise we will always be late,” he explained.
Alkermes senior vice president IT and CIO, Tom Harvey, seemed a little skeptical. He cautioned, “If we get too far in front of the business, what we have chosen to do is usually not very well-aligned. So, you want to make sure that your capabilities are there as it relates to scale and if you can truly see something coming.” But, he added, “It’s important to ensure that you don’t get too far ahead or get too far behind.”
Gurumurthy continued to argue his case that technology needs to anticipate business needs. To him, it wouldn’t be a problem as long as technology and business are on the same page about what’s ahead. “Business strategy is influenced by where technology is going and we need a seat at the table to inform and advise our business on what can be possible with technology,” he said.
As lines between technology and business strategy blur, it is changing the way IT is organized and how technology developers are hired. “When we recruit, we usually look for cultural fit and business acumen as much as we look for technology [skills],” Harvey said.
Evans agreed and said, “You want engineers to think about business objectives.” She went on narrate a story about an email she received from a technical leader, informing her and a business partner that the company could save $800,000 by leveraging a data connector. “And that’s what you want,” she said, “When he knows [how] we can drive efficiency for the company, we all win.”
Vasquez-McCall explained how she knows that a company’s IT vision is successful: When she enters a meeting with a client and can’t tell who in the room is from the business side and who is from IT. “In the past, business defined how to solve a problem and looked to IT to solve it,” she said, “Now IT executives are co-defining the problem and leading the evolution around defining a solution. We have to come together to participate in the new economy.”
The New Shaper
What does this age of co-evolution mean for the future of IT strategy? All four panelists agreed: Technology and data will be pivotal for business strategy and will create value and new business models. Peppard perhaps summed it best when he said, “Technology was historically an enabler. Now it’s a shaper.”
Pragati Verma is a writer, editor, and storyteller exploring new and emerging technologies. She has been a business journalist and managed technology sections at India’s The Economic Times and The Financial Express. Today, she brings the same editorial thinking to thought leadership content designed to engage, entertain, and enlighten readers.