Traditionally, information technology has been seen as a supporting structure for business strategy. Tech strategy was a subordinate element that needed to mold itself to fit the existing business model.
But, as digital technology rapidly transforms how corporations meet market demands, there is a growing school of thought that IT should no longer be relegated to the role of functional silo. Rather, it is a central resource that can align all parts of the business, helping it interact more efficiently and effectively both inside and outside of the organization.
Goizueta Business School’s Anandhi Bharadwaj, a professor of information systems and operations management, is a leading advocate for this approach, dubbed digital business strategy. She discussed the concept at a recent Technology Association of Georgia CIO Roundtable held at Goizueta. TAG, one of the largest state technology trade associations in North America, hosted the roundtable. Centered on the theme “Digital Business… Reimagining the Future,” the event brought academic and industry leaders together in a session designed to consider IT’s role in a digitally intensive world.
At each CIO Roundtable session, CIO groups discuss today’s most concerning business topics and provide a look at the needs and wishes of today’s CIO. This program provides CIOs a place to network with peers, learn about new technologies, find out about new solutions and get advice from other CIOs.
“Under digital business strategy, the value comes from leveraging digital resources and capabilities to create differential value,” Bharadwaj said.
This new framework is a fusion of IT strategy and business strategy; it treats digital resources as a connective tissue that brings together functions and processes.
“It’s a holistic perspective,” Bharadwaj said.
A handful of attendees remarked that, today, any equation needed to keep consumers at the core is helpful. “[Strategy] now needs to align with the business and the customer,” one panelist said.
Many panelists agreed a great way to begin thinking through this transformation is to consider how IT can become a change agent — rather than a supporting structure — for a business.
“In that notion of alignment, we need to think of IT as a leader in driving value,” a panelist said.
Culture is a key concern for adopting any new approach to strategy.
One attendee stressed caution in viewing culture from a purely internal perspective. He’d seen at least one company build out an expensive digital platform only to realize too late that its customers favored a more personal experience.
Internally, the focus tends to be on whether a new way of doing things can be accepted by an old guard, but as organizations bring more digital natives into the fold, they’re seeing a new challenge emerge.
“As 30-somethings — that group that grew up with the Internet — enter higher ranks in management, what we’re seeing is more employees coming to us with ideas,” one panelist said. “The problem won’t be adoption; it will be staying ahead.”
It would be easy to say this challenge actually indicates there is a rosy future for digital business strategy: After-all, if anyone is going to understand the importance of embedding digital capability into the heart of strategy, it will be the people who have never known a world without it.