Tech Function

Disruptive digital technologies are, true to their name, massive drivers of change in business, but many organizations are not set up for digital success.

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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, the technology function is treated as a strategic partner and a digital business enabler, not a service provider.

How We Help Clients Design Their Tech Function

To establish a world-class tech function, business and technology must work together to define a joint vision of the six drivers of tech function excellence:

  • The Operating Model. Companies should drive explicit alignment between business and technology towards a joint vision through a new operating model and value-based roadmap. To ensure value delivery, companies need to apply consistent governance across business processes, applications, data, and sourcing. The operating model design must address performance measurement as well as how deeply to embed green initiatives.
  • AI and Data and Analytics. Many organizations have compelling use cases but find it difficult to scale them globally. Overcoming that difficulty requires high-quality data, a skilled workforce, and cloud adoption. Companies must also establish an enterprise data model and strategy that defines how data is stored. Ongoing governance is critical to maintaining quality and consistency.
  • Technology Landscape. Companies should apply API-centric design as they build a modern technology landscape. This design usually includes a data layer that decouples legacy IT systems from the smart business layer, which allows companies to insert new functionalities or make quick and efficient changes. Companies also need to decide how aggressively to migrate to the cloud (be it a public or private cloud) and how to build a more modular infrastructure.
  • Digital Talent and Processes. Organizations must build tech capabilities strategically. The tech function is core to the business, making the need to hire and retain tech talent critical. Companies need to rethink their employee value proposition and build critical and differentiating skills in-house.
  • Excellence in Sourcing. It’s imperative to efficiently manage external expertise and optimize the vendor landscape to align the sourcing model. Digital platforms and ecosystems offer innovative and compelling ways to collaborate externally, but benefit can be achieved using other approaches: consolidating vendors and services, better aligning vendors, and working to reduce unused licenses.
  • Cybersecurity. To get the most value from cybersecurity investments, companies need to understand the risks the company faces, its appetite for taking on more risk, and its defensive capabilities. But companies can’t afford to focus their investments and security efforts solely on their ability to ward off attacks. They must also ramp up to ensure that they can remain functional after they experience a breach.

The Three Phases of Our Tech Function Approach

Assess
We first assess the maturity of the tech function and interview key stakeholders about the tech function’s performance. On the basis of that analysis, we develop a heatmap to pinpoint strengths and weaknesses so that leaders can define their goals and target prime areas for optimization.
Execute
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, such as economic downturns.
Scale
Our approach 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.

Our Client Work on World-Class Tech Functions

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.

Insights on the Tech Function

Meet Our Tech Function Consultants

Managing Director & Senior Partner

Michael Grebe

Managing Director & Senior Partner
Munich

Partner & Director

Heiner Himmelreich

Partner & Director
Amsterdam

Managing Director & Senior Partner

Alexandre Aractingi

Managing Director & Senior Partner
Paris

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