Majority of consulting firms are now talking about the same topics: agile, AI, cloud, micro-services, ecosystem, and API. One would almost wonder if strategy, which is fundamentally about choices, is still relevant. In addition, with the integration of business and technology, many of the so-called digital consultants actually don’t know much about technology. Is technology strategy still relevant? What should companies consider when developing a technology strategy? And how should they pick technology strategy consultants?
Whenever I speak with a CEO about technology, I would hear that the CEO wants to embed technology into all parts of their businesses and become a technology-empowered company.
The companies have a long list of to-dos for their journeys to become technology empowered, including:
- Deploy technology-empowered products and services to keep up with customers’ insatiable need for technology
- Becoming agile to increase the enterprise metabolism and create the ability to react to market changes even faster
- Deploy AI and advanced analytics to take advantage of the vast amount of data, both internal and external
- Migrate monolithic applications to microservices so that new functionalities can be developed and deployed more quickly
- Move from on-premise IT infrastructure towards a cloud based model
- Develop internal technology skills and capabilities to ensure the core technology assets being developed and maintained in house
Given that the list is relatively universal across most companies, some may argue that technology strategy is no longer relevant. Reading a lot of companies’ technology strategy, they would all have those points. The points of views from various management and strategy consultants and systems integrators are getting extremely similar also. Across industries, everyone is discussing the same words of AI, Agile, Analytics, and Cloud.
On one hand, the list of what to do to become a technology empowered company might be relatively similar. On the other hand, there is an even bigger need for technology strategy. Strategy is about choices, about what to do and more importantly what NOT to do. Given that industries are different, and companies are different, it is impossible for every company to have the same technology strategy. At a minimum, a distinctive technology strategy must be able to answer the following questions, with unique answers that are specific to the industry and companies’ own situations:
- What is the value at stake? How would the value be generated across the entire company?
- All the things above require massive investment. Where can companies secure the funding to invest in those changes? This is even more relevant now after COVID-19 since many companies are dealing with significant cash flow and credit issues.
- The sequencing of the activities also becomes critical. With so much to change, how do we chunk the elephant and be able to change in a step by step fashion?
- What mistakes have other companies made during the transformation to become technology-empowered? How can the companies avoid such mistakes and adopt their own approaches to ensure successes?
- Furthermore, there are also companies who don’t have the same level of urgency. Some industries are more B2B and the underlying principles for the business are changing slower than consuming facing industries. What should companies in such industries do here?
Given this, many companies are still looking for technology strategy assistance from third party consultants.
In my past experiences working at a number of leading technology strategy firms, I will advise companies to watch out for the following challenges:
- Ulterior motive: Consulting firms know that for technology, “Strategy is for the show and implementation is for the dough”. Multi-year technology transformation and systems implementation are major revenue generators for many consulting companies. Given this, the line between strategy houses and systems integrators are getting blurred. More and more strategy consultants are going into execution and systems integration. Traditional technology implementation companies are moving upstream to go into strategy. Given this, many firms are willing to give away for free the strategy work to ensure that they secure the ongoing execution work. The old mantra of strategy consultants being objective and independent is not as true as it used to be.
- Skills & expertise: When companies engage technology strategy consultants, they are seeking external expertise and advice. Unfortunately, today’s technology strategy consultants don’t always offer such expertise and experience. Often, companies would get three different types of “wanna-be” technology strategy consultants: a) young consultants fresh out of business schools; b) business consultants who don’t know much about technology but now branding themselves as “digital” consultants; and c) technology consultants who have only done IT governance and IT cost review but no real hands on technology experiences.
- Cut & Paste answers: As I discussed at the beginning of the article, there are a lot of boilerplate answers on technology strategy that are being provided to clients today. Some companies would literally take the standard marketing brochure and cut and paste them into client deliverables.
- Involvement of experts: During the sales processes, clients would view the experts being paraded. However, once the projects start, clients don’t always get access to the experts that showed up during the sales meetings.
- Challenge the thinking: Consultants were supposed to provide objective advice. But not every consultant is willing to do that, or capable of doing that. Often, they just write down what the clients want and package them into the answer for the clients.
- Business & IT integrative consulting: If there is one issue many of the technology strategy firms have, it’s the ability to speak the technology language to the business. To make technology a core part of a business, technology strategy consultants must have the ability to cut across business and IT and be bi-lingual – speaking the languages of business and IT. Unfortunately, too many of the technology strategy consultants don’t have the ability to do this.
- Evolutionary technology strategy: With the speed of changes in technology, it’s going to be difficult to create a meaningful technology strategy. Most of the technology strategies are either too high level and won’t change with the advances. Or it’s too detailed and becomes obsolete overnight. The ability to create technology strategy that allows the evolution of the strategy with technology changes is far and few between.
Give the challenges, based on my experiences of working with many companies globally on technology strategy engagements, here are the 10 questions that I will ask any prospective consultants on technology strategy, if I were the buyer:
- What do you think our biggest challenges in Technology Strategy efforts are going to be? This question tests how knowledgeable the consultants are with the industries’ unique dynamics and the company’s specific situation. The key here is to understand if the consultants are giving the boilerplate answers or if they have distinctive insights into the company’ underlying challenges.
- What are the mistakes you have made in past Tech Strategy efforts? It’s easy to talk about how many projects the consultants have done. It‘s much more difficult for the consultants to discuss the mistakes they have made. Being able to reflect and identify the mistakes highlights the consultants’ willingness to admit mistakes and improve themselves. Follow up questions to this question on past mistakes could include “What did you learn from those mistakes?” Or more importantly, “How do you make sure that you don’t make the same mistakes with us?”
- How would you challenge our thinking and say no sometimes? With the investment that companies are making to engage third party experts to develop technology strategy, it’s critical to find advisors who are willing to stand up and state their true opinions. During the selection process, clients must aim to understand how willing the consultants are to say what they truly think. Follow up questions can be “Based on what you know of us, what are the areas and decisions that you already think that we are wrong about?” And “How would you prove to us that we are wrong in our current thinking?”, which highlights how the consultants can influence clients.
- How do you ensure that you stay objective? To avoid the consultants who just want to get the follow on work, this question on staying objective is another critical question. An alternative version of the question can be “If we would engage another firm to drive the implementation, how would you get them involved right now to work with you to ensure a smooth transition?”
- How do you help us so that we can take over the implementation of technology strategy? In the end, only the clients can own the execution of the technology strategy and make changes happen. But clients need to know what challenges are likely to occur and what missteps they need to avoid. This question on taking-over the implementation of technology strategy will help clients understand how consultants can help clients launch its own transformation.
- How do you help us avoid the perception of this as an IT effort and ensure that we can get business and IT to work together on this effort? To make technology a core part of companies’ business, it is no longer sufficient for CIO and IT to do the technology strategy on their own. Business must be co-leading the efforts. Hence it’s critical to ask the questions of how to get business and IT to co-lead the effort, e.g.,
- How much business engagement do you expect?
- How would you foster the collaboration between business and IT?
- How do we make sure we don’t get the same cut & paste answers from you? To ensure the output strategy is truly unique and solves the clients’ problems, I would push deep with the vendor candidates to understand where they think they need to create unique answers. Another way to ask this cut and paste question is “Where do you think we as a company and industry would most likely different from other companies and industries, in regard to technology strategy?”
- Do you have references who are similar to our situations? References, a tried-and-true way of vendor selection, are even more relevant now. With every consulting firm touting its ability on topics such as digital strategy, Artificial Intelligence, Agile transformation and cloud, client references from the vendors whom the vendors have done similar work for are essential to ensure the success of the strategy engagements.
- With the speed of advances in technology, how would you create a technology strategy that can evolve with such changes? Areas to probe here include which part of the technology strategy is going to stay relatively fixed and which part will need to be reviewed periodically. Also, it is important to understand how the execution results of the technology strategy are going to be factored back into the strategy. Should an annual strategy refresh be conducted?
- Last but not the least, if you were us, what would we do differently? This is the ultimate test of a consulting partner. The appropriate answers to this question, would demonstrate the consulting company’s understanding of the client’s unique situation and challenges they are facing. It would also underscore the consultants’ willingness to be unbiased and be objective.
True technology companies such as Amazon and Google don’t have internal lines between business and technology. Everyone is focusing on using technology available to solve specific user problems. In a technology-empowered enterprise, the line between business and IT will disappear too, just like the left brain and right brain inherently know how to work together to allow human beings to function.
Technology strategy efforts are challenging. The right advisory partner can be instrumental in understanding a client’s unique situation and craft a roadmap to help clients become a technology empowered company. The 10 questions listed here can help companies pick the right advisor. During my hiatus to act as my client’s interim Chief Digital Officer, I had the opportunities to pick vendors on a number of critical digital efforts, and I field tested those questions. They work!