Cost Center to Profit Center

How Strategic IT Investments Leads to New Lines of Business

By    |    April 28th, 2021

In the post-pandemic global economy, CIOs profile as strategic collaborators continues to rise. And with that often comes larger budgets and bigger KPIs. Add to this the increased focus on the transformative powers of a digital transformation, IT leaders can feel the pressure from both the top-down and the bottom-up.

Technology can often be seen as a necessary evil; a cost center consisting of a patchwork of programs running in the background, keeping track of payroll, SKUs and engineering documents. But what we at Configit have seen with our customers is technology being the catalyst to new product lines, greater productivity and additional revenue streams.

McKinsey’s latest IT strategy survey [1] lays out seven lessons on how technology transformations can deliver real value, with the first one being, “Technology investments are creating significant business value.”

Specifically, respondents noted “…more than three-quarters of the initiatives their companies pursued have yielded some or significant cost reductions and improvements to employee experience. What’s more, more than two-thirds of respondents say these change efforts increased revenue from existing streams, and more than half cite the creation of new revenue streams: for example, a new product line or new business.”

Archive

If you are familiar with Configit at all, you will recognize that this is something we have been preaching for the last 20 years. Our customers have achieved ROIs from 76% to 121%, in just the first year, by aligning their technologies, breaking down data silos and creating a platform for cross-functional collaboration.

This was also corroborated by the McKinsey survey in Lesson #6, “The broader use of advanced technologies supports greater value creation,” with respondents reporting that advanced technologies can generate outsized value in tech transformations. Likewise, Lesson #7, “Bridging the business-technology chasm is critical to outperformance,” focuses on the importance of IT and business teams working together to both develop strategy and deliver technology.

By mapping the role of data across the organization, understanding how data plays a role in customer engagement and business operations over time, you can then map the right technology to the right strategy. This process will help IT leaders manage conversations about how these technology investments ultimately affect costs and revenue models.

Since we first developed the concept of Configuration Lifecycle Management (CLM) in 2001 we have been leading the charge to inform the market on the benefits of creating a collaborative platform that aligns a company’s functions to one single source of configuration truth.

You can learn more about CLM, and how it has made quantifiable impacts for our customers, at our upcoming CLM Summit.

Held virtually on May 17 and 18, the Summit will feature keynotes, use-cases and in-depth discussions from leading manufacturers on how aligning and optimizing cross-functional collaboration to a single source of configuration truth drives growth.

With three tracks, including dedicated tracks with a Sales and Engineering focus, this event will provide a breadth and depth of insight and knowledge to help your organization shorten sales cycles, accelerate product development and create exceptional customer experiences.

Configuration Lifecycle Management (CLM) Virtual Summit 2021

Read more

References

[1] McKinsey Digital, A. Dhasarathy, R. Frazier, N. Khan, K. Steagall, Seven Lessons on How Technology Transformations Can Deliver Value.