For many tech companies, especially start-ups, the relationship between technology and business can often be fraught with misunderstandings and disconnects. This gap becomes evident when stakeholders view technology purely as a cost centre rather than a driver for growth. The challenge is particularly acute in early-stage companies but is not absent in larger enterprises. Understanding and addressing these disconnects is critical for businesses aiming to innovate and grow sustainably. In this podcast we talk with Aviv Ben-Yosef about how CTOs can go about aligning the tech and the business.
Common Issues in Technology Management
Misalignment of Goals
One prominent issue is the misalignment of goals between tech teams and business units. Tech teams often focus on perfecting the codebase, eliminating technical debt, and maintaining clean, efficient systems. While these are essential, there’s a frequent oversight: the ultimate impact on the business and end-users. Teams might celebrate having zero tech debt and efficient pull requests, yet they may be unaware of how their work impacts the users or drives business growth.
This misalignment often stems from a lack of integrated communication. Tech teams may have internal metrics like Dora metrics or velocity, which measure the development processes but don’t necessarily align with business success metrics. Business leaders, on the other hand, may measure success by revenue, user growth, or market penetration. When these two sets of metrics are out of sync, it becomes challenging to gauge the real success of the tech initiatives.
Stakeholder Perception
Stakeholder Perception
There’s also a general perception that tech teams are just another operational cost, much like office cleaning or administrative tasks. This view minimizes the strategic importance of tech initiatives. When tech is seen merely as a cost, there’s little incentive to invest in innovative projects that could drive significant business value.
This perception issue often results in underfunding tech projects or reluctance to take risks with new technologies. As a result, companies may miss out on crucial opportunities for innovation and market leadership.
Methodologies for Aligning Tech and Business
Collaborative Integration
One effective approach to bridging the gap is fostering a collaborative culture where tech and business teams work closely together. This involves more than just meetings and updates; it requires both sides to understand each other’s challenges and communicate at an even level.
For example, tech teams need to appreciate the business implications of their work. They should be involved in discussions about market needs, customer feedback, and business strategy. On the flip side, business leaders should gain a fundamental understanding of the technology landscape and its potential impact on business operations.
Joint Metrics and KPIs
Implementing joint key performance indicators (KPIs) is another powerful strategy. Instead of measuring tech success by traditional internal metrics alone, integrate business outcomes into these evaluations. For instance:
- User Adoption Rates: Measure how new features impact user engagement and retention.
- Revenue Impact: Assess how tech improvements translate into revenue growth or cost savings.
- Customer Satisfaction: Use metrics like Net Promoter Score (NPS) to link tech performance directly to customer happiness.
By aligning KPIs, both tech and business teams can work towards common goals, fostering a sense of shared responsibility and achievement.
Realigning Perspectives on Tech Investment
Viewing Tech as an Innovation Center
For businesses to thrive, it’s crucial to shift the perception of tech from a cost center to an innovation center. This involves recognizing the potential for tech initiatives to drive significant business transformation. Investments in technology should be seen as strategic moves that can lead to market disruption and competitive advantage.
Engaging in conversations about innovation can help stakeholders understand the long-term benefits of tech investments. Highlighting successful case studies where tech has played a crucial role in business growth can also foster this shift in perspective.
Encouraging Continuous Improvement
Continuous improvement should be a cornerstone of tech strategy. This approach not only focuses on maintaining current systems but also on exploring new technologies and methods to enhance business outcomes. Encouraging a culture of learning and experimentation within tech teams can lead to groundbreaking innovations that propel business growth.
Conclusion
Addressing the disconnect between tech and business is essential for any company aiming to innovate and grow. By fostering a collaborative culture, aligning KPIs, and shifting the perception of technology investments, businesses can bridge this gap and harness the full potential of their tech initiatives. Through sustained effort and strategic alignment, tech can truly become a driver of business success, capable of disrupting markets and delivering significant value.