Digital Insights: Businesses could benefit from engineering investments
According to Deloitte’s report,’ Focusing on the Foundation: How Digital Transformation Investments Have Changed in 2024’, US businesses have budgeted more than 7.5% of their revenue in 2024 for digital transformation, yet many struggle to define its value and measure returns effectively.
Digital Insights: Businesses could benefit from engineering investments
According to Deloitte’s report,’ Focusing on the Foundation: How Digital Transformation Investments Have Changed in 2024’, US businesses have budgeted more than 7.5% of their revenue in 2024 for digital transformation, yet many struggle to define its value and measure returns effectively.
Diana Kearns-Manolatos, Technology Transformation Research Leader, Deloitte Center for Integrated Research
dkearnsmanolatos@deloitte.com
Broadly, digital initiatives can be categorised into digitisation, which focuses on the optimisation of internal data and platforms, and digital transformation, which aims for strategic growth and innovation. A digital strategy can be crucial to gain an advantage from both types of change programs.
However, only 44% of organisations have one in place, according to a separate Deloitte analysis of more than 4,600 business and financial filings. Aligning technology investments with enterprise strategy is the strongest value creator among those organisations, yet only 34% show this alignment. There’s an opportunity for additional considerations from businesses as they develop strategies for digital products and software engineering.
Closing the strategy and technology alignment gap asks for strategic action across leadership. Marketers, as much as any business function, can use technology to create stronger experiences, generate new insights, enhance their platform strategies, connect more seamlessly with customers, and do it with integrity. If it sounds like a tall order, it often is, and many don’t even know where to start.
Deloitte’s research breaks it down into five considerations that can help guide leaders as they chart their digital transformation strategies.
Source: Deloitte Center for Integrated Research Analysis
Marketing leaders can guide their digital strategies by asking five questions based on what their organisation is trying to achieve as a strategic north star:
- What experiences am I trying to create for my team, my customers, and my stakeholders?
- What insights do I and others need to generate to support that strategy?
- Do we have the platforms in place today to enable it all? If not, what’s holding us back, and how do we need information to flow more effectively across our organisation?
- Who needs to be connected to that information and how am I connecting them?
- What integrity fundamentals need to be met for regulatory, security, trust and purpose goals?
What’s more, these questions can help leaders recalibrate the conversation related to what they want to get out of their technology investments, better guiding and aligning product, design, engineering, and technology leaders as they create and bring to market new digital capabilities.
According to a Deloitte analysis of organisations' investment reporting and returns over a decade, a strong platform strategy, which helps enable the seamless flow of information across and outside the organization, has a high positive relationship with market value of all five considerations.
Among the enabling platform technologies, cloud investments have proven immediate and long-term market value gains for many companies analyzed, underscoring its effectiveness and how integral the technology has become to modern engineering.
“Marketers, as much as any business function, can use technology to create stronger experiences, generate new insights, enhance their platform strategies, connect more seamlessly with customers, and do it with integrity. If it sounds like a tall order, it often is, and many don’t even know where to start.”
What does this mean for marketers?
Technology investments should align with business strategy to maximise market value and drive growth. Here are a few examples of what that might look like.
- A global chief experience officer wants to create a better and more transparent customer experience by allowing consumers of their packaged goods to have better insight into where/how ingredients are sourced in the products they’re using. This requires them to track the materials going to their production facilities across their digital supply chain, even in rural geographies and across countries. They also need to ensure those ingredients meet regulatory standards to qualify as organic products. That’s a digital strategy that covers all the considerations and is a first step to having a conversation about the right technologies and functionalities needed to achieve it.
- A chief marketing officer wants greater brand consistency across digital assets, allowing franchises to quickly adapt the master brand. Their goal is to reduce friction for marketing teams with a better design experience that decentralises the creative design and approval process, while maintaining brand standards.
- A product marketer is looking to create hyper-personalised customer experiences for a loyalty programme this holiday season. The recommendations need to be real-time, targeting that specific user based on daily mobile app usage stats and relative to intelligence from other customers collected over time, with the proper privacy controls. The programme should also consider elements of community giving to support the organisation's social purpose and climate pledge strategy. Greater clarity into the business goals can help product and engineering leaders be more agile in working toward this cloud-native app and data platform vision.
Digital transformations cut across many functions. Clear business requirements at the outset can help set the goalposts for everyone. From there, leaders should also consider adopting a comprehensive approach to measure digital transformation value by considering financial, customer, process, workforce, and purpose KPIs help to ensure technology investments are driving their intended ROI.
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