ArticleMay 10, 2023 · 5 min read time
Navigating the technology landscape is not an easy task, and to build a successful technological strategy, one needs to ensure a solid foundation is in place. Otherwise, it is easy to waste money, effort, and time – but why is it so common to fall into that trap?
As digitalisation accelerates, organisations find that their technology landscape becomes more complex. The boost in IT productivity adds complexity as new systems spring up like mushrooms. One of the main drivers are SaaS solutions that can be adopted rapidly and with ease. Another factor are the modern cloud platforms that enable increased productivity in custom development.
This leads to a vast and diverse technology landscape, that has become a challenge to manage. The number of systems and software often grows faster than the actual business. Even mid-size organisations can easily have hundreds of systems in their IT portfolio. The larger the organisation is, the more likely it will have severe issues in comprehending the technology landscape they are working with – let alone developing the portfolio in the desired direction.
In this article, we cover the importance of a solid technology foundation as the solution to ensure development stays forward-focused and efficient.
The missing foundation for digital development
The most important benefit of the technology landscape is how it prepares the organisation for the future.
New initiatives are significantly easier and faster to develop when an existing and solid foundation is in place. In an ideal situation, that foundation is a mesh of technology capabilities that flexibly enable the business strategy. Of course, organisations need to maintain basic delivery capabilities constantly, but once the foundation matures, they can shift the focus to differentiation and innovation.
The organisation’s strategic competitive advantage areas should drive buy-vs-build decisions. It’s often a tough fight between funding the capability foundation, tactical cost savings, and business-driven point solutions. Those who succeed understand that cost savings are a side effect of reuse. While point solutions have their place, organisations can achieve significant benefits, like shorter development lead times, by focusing on foundational strategic capabilities.
However, companies often deal with a mess of overlapping and missing pieces in their technology landscape puzzle. It's easy to draw attention to non-differentiating capabilities, such as identity management or basic ecommerce features. When the foundation is missing, all development initiatives start from square one. Everything needs to be built from scratch, leading to unnecessarily complex projects focusing on generic capabilities alone. New projects do not add to building the foundation incrementally, and every solution or tool is disposable, serving one purpose or use alone.
Business implications: It’s challenging to build a competitive advantage without the foundation
If you don't have a good grasp of your organisation's technology strategy, you're likely adding to your technical debt with each seemingly successful IT delivery. Various development initiatives will head in their own directions, but the foundation will be thin or nonexistent.
Every needed solution takes longer to launch due to teams having to work on redundant features that should have been a part of the foundation from the get-go. This, in turn, leads to unnecessarily long time-to-market for necessary business features.
The IT system map will have scattered islands of success but need something to tie them together. Challenges in data reuse can reveal the technical debt when each solution requires the same information in its own format. Thinking of data in terms of data products (Gartner's Packaged Business Capabilities or PBCs) helps establish a standard foundation.
Another revealing example is to think of customer identities. Does your technology foundation have a single identity for each customer, or is the same customer represented by multiple identities across a scattered system landscape? A step in the right direction would be establishing a single customer identity management solution as part of the standard foundational capabilities.
One great example of the business implications of lacking technology foundation comes from e-commerce. The rapid growth and constant change due to global events would lead to thinking companies already have strong technology capabilities in place to ensure adapting to the ever-evolving landscape takes no unnecessary effort. In reality, many ongoing e-commerce initiatives start from square one instead of building on an existing foundation and integrations.
Challenges in technology leadership
Too often, the primary focus is on direct cost savings. A solid foundation is a balanced mix of commercial services and custom-developed components. But building the mesh of capabilities requires vision and strategic technology competence.
Developing a technology landscape that acts as an incrementally growing foundation for business is a challenging task. Success requires a solid vision and a strong technology background combined with business strategy thinking.
The need for technology leadership is higher than ever as the complexity keeps increasing and the pace of change accelerates. Modern technology leadership needs to base on hands-on knowledge and a good grasp of the entire technology landscape.
Technology leadership is an area where smaller organisations are often more equipped than their larger counterparts. While smaller companies operate in the same digital ecosystem and complexities, they have been much more hands-on in their technology decision-making. Thus, they are making decisions that better fit the purpose.
Additionally, smaller organisations often have a better understanding of realistic technology opportunities and how they fit into a specific context. They are good at utilising the opportunities provided by cloud services to save time on undifferentiated infrastructure efforts. Much of the advantage comes from their hands-on technical competence.
Sometimes, the technology competence is lacking within an organisation. That gives additional benefits to vendors, which only accelerates the problem. In many cases, vendors sell a promise of their extensive solution to overcome every possible issue once and for all. A SaaS service providing limited possibilities for differentiation doesn't cater well to innovative business development.
On the other hand, spending time on in-house development of non-differentiated basic capabilities leaves less time and money to address the strategic differentiators for competitive advantage. Again, everything boils down to the healthy balance of commercial services and custom-developed components, but building that mesh takes skills and effort.