perspectives on developing a technology strategy

Perspectives on developing a technology strategy

prepared for MIDMRKT GroupOctober 2020

Strictly private and confidential

This document does not constitute a contract to perform services. Final acceptance of this engagement by PricewaterhouseCoopers is contingent upon successful completion of PricewaterhouseCoopers' acceptance procedures. Any engagement arising out of this proposal will be subject to the execution of our formal engagement contract, including our standard terms and conditions and fees and billing rates established therein.

Points-of-view on technology roadmapping efforts1

PwC | Private Company Services Advisory 3

Many organizations seek to undertake a technology roadmapping effort in support of more effectively leveraging and utilizing technology as a platform for further enabling the growing needs of the enterprise.

• Develop a plan to leverage technology to meet business needs and strategic goals

• Define the justification for making investments that significantly increases the value of technology to the organization

• Design a future-state technology architecture that is scalable and dynamic

• Identify impacts to both business and technology opportunities to operate more efficiently and effectively

• Design an operating model for IT that is appropriately skilled, flexible, and motivated

• Balance strategic goals, industry trends, technology direction, business patterns/ cycles, and organizational culture

• Create an achievable and agreed-upon roadmap for going-forward

PwC IT strategy framework Potential objectives and outcomes

Management & governance

Technology & architecture

Strategy &business alignment

Organization & skills

Typical objectives and outcomes of a technology roadmapping effort


Managing IT resources and operations to ensure effective and efficient support of business and financial goals

Defining the technology solutions, underlying architecture and processes for IT’s long-term support of business capabilities

❏ Program and Project Lifecycle Management❏ IT Vendors and Partners❏ Technology Governance and Risk Management❏ IT-Specific Finance and Accounting❏ Communications

❏ Development❏ Execution/ Infrastructure❏ Application(s)❏ Data❏ Operations❏ Security❏ Integrations❏ Network

Ensuring that the IT organization is aligned with the business throughout the entire cycle of innovation, planning and delivery

Aligning the IT organization’s structure, skills and sourcing strategy with the needs of the business, while promoting employee learning and satisfaction

❏ Business/IT Relationship❏ Technology Adoption❏ Business/IT Service Levels❏ Strategic IT Planning and Investment❏ Technology Portfolio Management❏ Experience Design and Usability

❏ Organization❏ Outsourcing and Insourcing❏ Skills and Competencies❏ Learning❏ IT Specific HR and Recruiting ❏ Facilities and Work Environment

Focusing on understanding business’s needs and how IT addresses them

Focusing on the oversight and management of IT

Focusing on IT’s roles, responsibilities, processes

Focusing on the technologies, data, and related support considerations

We recommend taking a holistic approach in development of a technology roadmap, though mindful that not all aspects are in scope.

Management and governance Technology and architecture

Strategy and business alignment Organization and skills

Holistic considerations in developing a technology roadmap❏ Potential scope considerations


Business process and stakeholder involvement

Record to ReportFinancial & Management Reporting

Subledger & GL Financial Controls Fixed AssetsConsolidations &

Inter-companyProject Accounting, Time & Expense Taxes Management

Inventory to Deliver

Idea to Obsolescence

Manufacture to Completion

Lead to Cash

Source to Pay

Deliver to Replace

Hire to Retire

Inbound Processing Outbound ProcessingInventory Data Transportation

ManagementWarehouse Management

Manufacturing & Production Execution

Quality ManagementBill-of-Material Data Facilities Management

Environmental Health & Safety

Call Center Service Agreements Field Service ManagementService Center Warranty

Product ConfigurationProduct Data Product Lifecycle

Management

Quoting and Sales Orders

Pricing and Promotions

Master Customer Data Customer FeedbackBillings / AR Sales Reporting

Strategic SourcingPurchasing Master Supplier Data

Supplier ManagementAccounts Payable

HR Core Admin Talent DevelopmentTalent Acquisition Workforce Planning and AnalysisTalent Retention

Treasury and Cash Management

Forecast to Plan Master Supply Planning Inventory PlanningDemand

PlanningMaster Prod Scheduling

Sales and Ops Planning

Budgeting & Forecasting

Product Data Management

Engineering, Design,& Test

Reverse Logistics

Project Management

Payroll

Point-of-Sale and Sales Transactions

Business stakeholder involvement and alignment throughout the roadmapping effort is essential. Part of this is to identify applicable business unit leaders and functional influencers, obtaining their buy-in throughout the process.

Model not indicative of all organizational business processes, nor is directly reflective to a particular business..


Efficiency & cost reduction (below the line)Establish backup and disaster recovery optimization and testing

Improve Help/ Support Desk user-end satisfaction

Minimize hosting costs via cloud infrastructure

Illustrative OpportunitiesImproving the Value of IT

Business enablement (above the line)“Touchless” orders

Improved business forecasting

M&A target diligence and acquisition integration

1

2

3

A

Current State Future State?

Valu

e

D (5

0%)

D (3

0%)

ND

(5

0%)

ND

(70%

)

Cos

t

3

A+B

+C

C

D = Discretionary, ND = Non-Discretionary

Typically as a part of an IT roadmapping effort, there will likely be a need to make decisions on the IT organization’s positioning as a proactive enabler of the business’s strategy in relation to how they provide operating excellence.

Key consideration: IT’s focus today vs. tomorrow?

2

1

B

Recommended approach and artifacts for developing a technology roadmap2


Strategy & Business Alignment

Organization & Skills

Management & Governance

Technology & Architecture

• Identify future state processes, capabilities, and proposed objectives

• Develop logical solution architecture, calling out platform-independent technologies for addressing capabilities

• Define high-level future state IT operating model (roles, responsibilities and processes)

• Develop technology and IT organizational gaps analysis

• Develop, prioritize, and sequence a prioritized, and sequenced roadmap; identifying IT capabilities that that will be enabled over time

• Document constraints and dependencies affecting initiative sequencing and duration

• Call out key risks and issues• Provide high-level effort

estimates and benefit drivers • Set investment and cost

take-out points, as needed

IT Landscape• Review current technology

environment and challenges• Refine understanding of

current IT organization and governance pain points

Business Strategy• Refine understanding of

current business operations gaps and pain points

• Confirm business strategy, goals, and objectives

• Establish objectives, scope, timeline, workshops, and status reporting cadence

• Gather and review initial baseline documentation

• Agree on stakeholders and schedule interviews/ meetings

• Establish hypotheses

Our recommended approach – at its core – is to create a holistic technology strategy that is driven by and directly traceable to business needs.

RoadmapSolutionAlignMobilize0 1 2 3

Recommended approach for developing a technology roadmap

Typically 6-9 weeks as a dedicated effort

• Business goals and objectives codified for IT

• Identification of aspirations and challenges with business functions, processes, technology, and IT support

Steering committee readout/ working session

• Business capability architecture

• Logical architecture of potential platforms and systems

• High-level IT operating model

• Sequenced technology roadmap and supporting detail

• Week-by-week planTypical work products and outcomes


Clearly defined goals and objectives will allow for the technology strategy to be shaped and directly traceable to the needs of the business.

Specific and measurable objectives allow the technology strategy to be actionable; with an understanding of “what success looks like”.

Example IT goals and objectivesMobilize0

1Align1

2Solution2

32

Roadmap3

Illustrative


Business process and capability groups can help appropriately scope priority improvement areas.

Pragmatic and well-defined capabilities help describe and prioritize what is necessary for undertaking technology improvements.

Example capability architecture

Illustrative

Dialogue on capabilities can highlight where the organization should be “world-class” and differentiated versus areas where a standard capability is sufficient.

Mobilize0 Align1 Solution2 Roadmap3


Recommend organizational functions broken out into logical groupings to support required IT capabilities and processes.

Recommend sourcing considerations for roles based on market capabilities, hiring/retention trends, and benchmarks

Identify capability-based roles and responsibilities aligned to specific functions but also working across functional areas.

A organization-related recommendation typically focuses on the IT roles, responsibilities, and processes for better supporting current business needs and future growth. Ideally, this is aligned to an industry framework like ITIL.

Example IT operating modelMobilize0 Align1 Solution2 Roadmap3

Illustrative


Logical solution components (applications, infrastructure, data, integrations) are called out and organized to address desired business capabilities.

Logical architectures can identify the technical system-to-system implementation and related support considerations for an organization.

Example logical architecture

Existing/ remaining and new anticipated systems can be identified. Specific branded and/or vendor agnostic technologies can be identified.

Mobilize0 Align1 Solution2 Roadmap3

Illustrative


Practical projects and activities logically sequenced taking into account priority, constraints, and dependencies.

Various deployment approaches can be explored; driving roadmap sequencing, timing and related risks.

Successful capabilities are reliant on “foundational” and “supporting” projects and activities

The roadmap will consist of multi-year initiatives driven off of people, process, and technology improvements; providing an incrementally phased view of how the future-state will come to be.

Example roadmapMobilize0 Align1 Solution2 Roadmap3

System capabilities will be delivered – partially or fully -- as work tracks are executed over time.

Decision milestones for new technologies and other considerations are set, along with anticipated sunsetting/ decommissioning of legacy systems.

Illustrative


Not all decisions will be made as a part of the roadmap development process. However, there will be key milestones in the roadmap that will call-out when certain decisions will need to be made by.

Roadmapping effort will contain

Roadmapping effort could include

Typically not performed during Roadmapping

• Realistic high-level plan to take IT from the current state to the future state

• A way to align both business and IT stakeholders on what capabilities need to be developed and when they can be delivered

• Guide for investment decisions by defining the high-level justification of the capabilities

• Views of how the solution components will be changing over time

• High-level timing expectations for when capabilities are anticipated to be (or must be) delivered

• Detailed steps, actions, and activities for undertaking projects and programs

• A rigorous cost-benefit analysis or budget

• The selection of specific new technologies and vendors

Appropriate level of detail for a technology roadmapping effort

PwC’s technology strategy capabilities and qualifications3


PwC strategic technology consulting overview

236Kemployees worldwide at 758 locations, 158 countries

12K+technology consulting professionals worldwide

4550+professionals in the Americas specializing in ERP and technology-driven business transformations

Provenpractices, methodologies and accelerators; delivering quantifiable results through collaboration and knowledge transfer

Insightfulwith tax, risk, and compliance considerations

35+ratings by industry analysts recognizing PwC a leader in business transformation (2013-2020)

Leader in technology enabled business transformation (per Gartner, IDC, Kennedy, Forrester)

Expertsacross industries and in organizational change management

Further information on PwC, our history, and our financial position can be found at our Global Annual Review.

From strategy through execution, PwC is one of the most accomplished and recognized enablers of business transformation using technology.

https://www.pwc.com/gx/en/about/global-annual-review-2017.html


PwC private company services

Digital & Tech Operations Deals Pricing EffectivenessEnable growth by embracing new technology-driven capabilities to streamline business functions, improve decision-making and develop new product/service offerings.

Improve operational efficiencies throughout your supply chain, whether in sourcing and procurement, logistics or overall strategy. Our practices will unlock value, immediately impact the bottom line and create competitive advantages.

Drive growth that develops a more profitable future through realizing the potential of your mergers, acquisitions, divestitures and capital markets transactions.

Identify areas of opportunity to minimize leakage and realize value, at scale, through transactional pricing, value pricing, channel pricing, strategic pricing services and pricing tool implementations.

Marketing Sales Finance Effectiveness Workforce of the FutureUnderstand how to best use and orchestrate teams, technology and data to deliver the most relevant experiences across all customer touchpoints.

Grow revenue while improving your overall customer experience by using data and leading technologies to increase productivity on your marketing, sales and service teams.

Develop high performing, cost-effective finance functions with streamlined and standardized processes that focus on adding insight to the business while delivering effective controls and increased efficiency.

Create a future-ready workforce and lead in new ways, so they can inspire their people to adopt new ways of working and build a culture of innovation and growth.

Grow the business

Grow the business

Workforce of the Future

Digital & Tech

Operations

Deals

PricingEffectiveness

Marketing

Sales

FinanceEffectiveness

Excellence

Operational

PwC’s Private Company Services (PCS) serves the needs of privately-held businesses, including global enterprises investing in the US. We specialize in delivering relevant and right-sized engagements to our middle-market clients.


Select case studies

$125M provider of traffic control contract

services

Technology platform strategy and roadmap - To support client’s aggressive growth plans, PwC was engaged to assess client’s current and anticipated business need related to a custom-built human capital recruitment, management, and deployment platform. PwC delivered a 2 year roadmap and technology architecture that consisted of both ERP platform and best-of-breed vendor solution components. Effort also involved pivoting the technology organization from a focus solely on application development and deployment to one that address broader support and business relationship needs.

$300M parts retailer and servicer of commercial

trucks

Holistic technology strategy - PwC developed an IT strategy focused on helping the organization undertake and achieve an ambitious set of strategic goals. Key to this was defining what the IT organization should look like (e.g., roles, responsibilities, job descriptions, processes, outsourcing considerations, etc.), and defining the infrastructure components and technologies (e.g., cloud) to position the organization for scale. Following this, PwC led the organization-wide effort to implement the strategy; which included sourcing candidates for new roles, implementing IT management tools and processes, and migrating key technologies to the cloud.

$650M global provider of on-location

broadcast services

Technology-enabled business strategy - PwC structured and led a strategic joint business and IT initiative with the goal to optimize and manage the lifecycle of operational assets (labor and equipment). The effort involved developing a target business/solution architecture, identifying relevant platform vendors, and developing economic justification for the initiative. The result was a multi-year roadmap for increasing asset utilization, reducing operational costs, generating additional revenue, and providing a platform for further international growth. PwC also led the vendor selection and contract negotiations efforts for the technology platform and implementation provider.

$1.3B manufacturer of specialized valves and

regulators

IT organization strategy and roadmap - PwC led an IT strategy effort to support an ambitious multi-year ERP migration. Complicating the success of the program was an IT workforce that had a high percentage of retirement-eligible employees with specialized skill sets and pockets of knowledge. To mitigate this risk, PwC developed an IT operating model and competency development framework to help facilitate knowledge and grow IT talent. In conjunction with this, PwC developed a roadmap for moving the organization to a service-based model that better engages business stakeholders. In addition, PwC worked with IT and Product Engineering leadership to define how to interface IT with product development (engineering) for incorporating and supporting software, firmware,data, and security into the growing line of connected products.

PwC helps privately-held operations-centric organizations with their most challenging business and technology efforts.


PwC PCS technology strategy leadership

Dan MosesPrivate Company Services, Digital and Technology [email protected]

Dan specializes in IT and technology-driven business considerations for privately-held organizations; including IT roadmapping, IT organization, technology vendor selection, ERP, e-commerce, and the use of cloud technologies.

Dan also performs due diligence in deals where technology is a key factor; advising clients and financial buyers in pre-and post-deal situations on matters such as the realization of technology-oriented synergies, carve-out plans, and realignment of IT strategies based on new business direction.

He has worked across several industries and has proven results working with senior management on setting IT strategies; developing enterprise and solution architectures; managing IT portfolios, vendors, and governance functions; and delivering high-risk and complex programs.

mailto:[email protected]


Typical technology strategy engagement outcomes

Our success comes from your deriving tangible value from a executable plan moving forward.

Our clients expect our technology strategy advisory outcomes to include...

● a catalyst for establishing alignment on business planning and execution.

● business justification and timeline for the capabilities and talent that will drive competitive differentiation.

● an architecture for technology enabled business capabilities that scale in tandem with business growth.

● a structure for effectively supporting, evolving, and securing technology services in a meaningful and cost-effective manner.

● a process and artifacts for supporting future strategic planning efforts.

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perspectives on developing a technology strategy

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