“While new product innovation and market expansion have and will continue to be crucial elements to a technology company’s success, they alone are no longer sufficient to guarantee long-term survival and value creation.”

- John Ciacchella, Principal and U.S. Consulting Technology Leader, Deloitte Consulting LLP

Being competitive is the challenge in today’s technology industry. Companies are faced with continuous market and technology disruptions, more complex customer channels and demands that in turn are forcing fundamental changes to their traditional business and operating models. As a result, while enterprise-wide transformations are often complex and risky, they also are crucial to the long-term success and value of a technology company. To better understand the specific practices that successful companies use to translate boardroom strategies into results, Deloitte recently conducted a study, "Competitive Preparedness: Transforming Strategy into Results," to identify the practices that matter most to the successful implementation of enterprise-wide initiatives.

Second in our series looking at competitiveness in the technology industry, the study focused on understanding how tech managers successfully plan, design and execute enterprise-wide strategies such as acquisitions or divestitures, software implementations, restructuring  initiatives and more. This year’s study revealed that most companies understood what they needed to do and were, in fact, using the right practices during the right phase of the initiative. What actually differentiated successful initiatives from those that failed were not the practices used, but how well certain practices were used.

Key findings:

• Companies are shifting their focus toward internal improvements, with 59 percent of company-wide initiatives being internally focused
• The current economic downturn has not changed the reasons technology companies launch enterprise-wide changes. Of the companies surveyed, 36.4 percent cited achieving operational efficiencies as the primary driver of current initiatives, followed by entry into new markets at 27.2 percent and competitive threats at 15.2 percent.
• 76 percent of the respondents cited internal factors as the overall reason behind the initiative’s success/failure.
• Success of internal initiatives placed greater importance on the effective use of practices related to organizational support and collaboration, while success for external initiatives was more dependent on clear governance processes and knowledgeable and dedicated teams.
• 58 percent of respondents indicated that their company has either completed a major initiative in the last three months or is currently in the process of completing the initiative
• The majority of initiatives met (60 percent) or exceeded (23 percent) expectations, while comparatively few failed (5 perent) or only partially met (12 percent) expectations.

About the Study:
The study surveyed more than 150 technology industry executives working across a variety of technology industries, including telecommunications, semiconductors, original equipment manufacturers/hardware and software. The survey was conducted in mid-2008.

Related Content:
Press Release: Competition, Not Economic Downturn, Driving Major Changes for High-tech Companies
Article: 2007 Tech Competiveness Study – “Competition at the Crossroads”
Industry: Technology
Services: Strategy and Operations

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.