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Driving enterprise value with a three-dimensional tech strategy, enabled by cloud

Increase your digital transformation value

What does it take to run a successful digital transformation? It’s more than just the right technology—it requires alignment across your enterprise, from strategy to tech to change capacity. Our new report dives into the three-pronged approach, enabled by cloud, that delivers enterprise value and ROI when transforming your digital landscape.

Three tech strategies driving enterprise value and ROI

According to Deloitte Global research, organisations that deliver successful digital transformations bring together strategy, technology, and a strong change capability. However, many organisations—approximately 66% of Fortune 500s—still have not lined up tech and business objectives, leaving considerable room for better business and technology strategy alignment. This analysis discovered that a three-dimensional tech strategy—consisting of a mature tech focus; a platform strategy; and investment in technologies like AI, cloud, and cyber—can help drive enterprise value and increase your digital transformation ROI.

In this report, we examine the relationship among these three dimensions, market cap and stock returns.

  • Tech maturity: Explores how using established versus newer technologies has an impact on enterprise value and digital transformation by grouping financial statements into two categories:
    • those modernising their technology infrastructure by moving away from older technology and investing in mainframe, traditional ERP, data and analytics, and other approaches to modernise legacy strategies; and
    • those more focused on using new technologies like AI, IoT, cloud, blockchain, cloud-enabled ERP, and others to drive innovative strategies.
  • Tech theme/category: Considers the enterprise value seen from five common digital transformation themes: insights, experiences, platforms, connectivity, and integrity. It found that platform technologies, such as cloud, quantum, and edge computing, have a highly positive relationship to market value increases.
  • Individual technologies: Drills down one level deeper to understand how specific, discrete technologies like AI, cloud, cyber, ERP, IoT and blockchain individually relate to enterprise value. The analysis showed distinct value opportunities related to each technology, with value trend cycles and clear variances by industry.

Three technology strategy value drivers analysed in 10K market cap correlation analysis of 4,500+ organisations

Definition :- The extent to which the organisation has modernised away from legacy technologies and embraced innovation.

Example use case and technology
A global consumer products company could use a combination of new and innovative technologies like AI, cloud, cyber, and IoT to manage asset provenance across the supply chain to drive market value.

Correlation to market cap
High correlation for innovative technologies.

Definition :- The extent to which the organisation has brought together a class of related, functional technologies across its strategy.

Example use case and technology
A manufacturing company could enhance its computing infrastructure with cloud, edge, and blockchain platform technologies to drive market value.

Correlation to market cap
High correlation for platform technologies and other categories.

Definition :- The extent to which the organization has adopted and gained mastery of a specific technology and its related services immediately and over time.

Example use case and technology
A pharmaceutical company could develop a cloud native application to engage with patients and track health-related information.

Correlation to market cap
Highest correlation for cloud which is 3x cyber in the long term (3 years).

Cloud investments drive enterprise value and enable innovation

Together, these elements can create a more three-dimensional tech strategy—and cloud strategy and investments can be a considerable enabler of each.

Whether you are moving off mainframe systems, modernising your ERP strategy, or using data and analytics to create new business intelligence, our analysis shows that these initiatives are the baseline for achieving enterprise value (in market cap and stock returns). Value leaders, instead, are focused more on investing in and innovating with additional technologies like AI, cloud, cyber, blockchain, and IoT, seeing as much as 3x the market cap of others.

Importantly, we found that digital transformation strategies focused on platform modernisation and/or innovation investments directed at improving the flow of information across the organisation and/or its ecosystem—whether embracing cloud, IoT, edge, or quantum—saw the highest increase in market cap across four digital initiative themes. Of five digital imperatives that were the focus for this analysis, platformstechnologies enabling the flow of information across the organisation or its network—have the most significant positive relationship with market cap, with almost 3x the positive relationship to valuation compared with insights. This underscores the importance that core modernisation, cloud migration, and cloud native initiatives play in engineering advantage for your organisation.

When drilling down to look at individual technologies, cloud investments relate to the most significant market cap increases, with AI and cyber also contributing to positive valuations. Our analysis shows that investments in cloud migration, cloud native programs, and related cloud cyber and cloud ML services drive enterprise value and result in ~3x the value for market cap compared with cyber investments alone in the long term (three years) and ~2x the value for market cap comparatively in the short term (immediate). According to the 2023 Global Future of Cyber Survey, cyber investments also add significant value for organizations in their own right, but a solid cloud (and cloud cyber) strategy is important to any digital transformation.

Sustaining enterprise value through implementation

A value- or results-focused technology strategy can make or break a digital transformation and the market value an organisation sees from its investments. Leaders that fail to invest in innovation, think horizontally across technology categories, and connect individual technology programmes to strategic objectives may be missing opportunities to drive more market value. Importantly, cloud strategies can bring together these three dimensions to help drive significant market value for organisations undergoing digital transformation.

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