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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.

David Linthicum
Garima Dhasmana
Ranjit Bawa
Diana Kearns-Manolatos
Ahmed Alibage
Cloud tech enabled enterprise value
1 MB PDF

Three tech strategies driving enterprise value and ROI

According to Deloitte Global research, organizations that deliver successful digital transformations bring together strategy, technology, and a strong change capability. However, many organizations—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 modernizing their technology infrastructure by moving away from older technology and investing in mainframe, traditional ERP, data and analytics, and other approaches to modernize 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 analyzed in 10K market cap correlation analysis of 4,500+ organizations

Definition :- The extent to which the organization has modernized 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 organization 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, modernizing 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 modernization and/or innovation investments directed at improving the flow of information across the organization 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, platforms—technologies enabling the flow of information across the organization 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 modernization, cloud migration, and cloud native initiatives play in engineering advantage for your organization.

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 organization sees from its investments. Leaders that fail to invest in innovation, think horizontally across technology categories, and connect individual technology programs 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 organizations undergoing digital transformation.

Download the full research report:

Read the full report, A three-dimensional tech strategy, enabled by cloud, can drive market value, to learn more.

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Get in touch

David Linthicum

Deloitte - United States
As the chief cloud strategy officer for Deloitte Consulting LLP, David is responsible for building innovative technologies that help clients operate more efficiently while delivering strategies that enable them to disrupt their markets. David is widely respected as a visionary in cloud computing—he was recently named the number one cloud influencer in a report by Apollo Research. For more than 20 years, he has inspired corporations and start-ups to innovate and use resources more productively. As the author of more than 13 books and 5,000 articles, David’s thought leadership has appeared in InfoWorld, Wall Street Journal, Forbes, NPR, Gigaom, and Lynda.com. Prior to joining Deloitte, David served as senior vice president at Cloud Technology Partners, where he grew the practice into a major force in the cloud computing market. Previously, he led Blue Mountain Labs, helping organizations find value in cloud and other emerging technologies. He is a graduate of George Mason University.
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Garima Dhasmana

Deloitte - United States
Garima is a Principal in Deloitte Consulting’s Banking & Capital Markets practice with over 14 years of experience and expertise in shaping and executing large complex global transformation journeys for Banks – from advisory (strategy, vision, business case and roadmap) to implementations of innovative solutions and governance frameworks. She has led and delivered extensively across a multitude of technology priorities including legacy modernizations related to Cloud, innovations leveraging Cloud native and AI/ML capabilities as well as efficiency plays in tech with a process and cost lens. Garima’s thought leadership has helped Banks evaluate their technology estates, identify opportunities, and develop value propositions to shape their technology first long-term strategies and roadmaps.
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Ranjit Bawa

Deloitte - United States
As Deloitte Consulting LLP’s US Cloud leader, Ranjit brings the perspective that some of the most powerful opportunities for disruption come when new technology solutions enable the transformation of core operational processes and financial models. It's a perspective sharpened over the course of nearly two decades spent designing solutions for some of the world's most technology-centered enterprises, including leading global financial institutions where technology is the foundation of the service delivery model. Ranjit's educational background—he has degrees in electrical engineering and finance—gives him a rounded understanding of the interrelated dynamics of technology and economics. His early career in aircraft engineering operations steeped him in an environment where every decision impacts a complex, mission-critical system. Today he applies that perspective to help organizations reimagine themselves at every step along the cloud journey.
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Diana Kearns-Manolatos

Deloitte - United States
Diana is a senior manager in the Deloitte Center for Integrated Research where she analyzes market shifts and emerging trends across industries. She leads Deloitte’s global digital transformation research and focuses on topics including digital strategy, cloud, AI, cyber, blockchain, IoT, experiential technologies, and the future of workforce. Additionally, She draws on more than 15 years of award-winning marketing communications expertise to align insights with business strategy. She speaks on technology and women in leadership and holds a bachelor’s and master’s degrees from Fordham University.
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Ahmed Alibage

Deloitte - United States
Ahmed is a manager in the Deloitte Center for Integrated Research where he works for Deloitte’s digital transformation research and focuses on topics including digital strategy, cloud, AI, and IoT. Besides analyzing complex data and designing executable and credible research studies, Ahmed develops, plans, and executes global thought leadership agendas and initiatives and contributes to the broader thought leadership community at Deloitte by sharing ideas, methodologies, and best practices. Before joining Deloitte, he worked as a postdoctoral research fellow and senior research associate at Portland State University, where he earned his Ph.D. in Technology Management, with a focus on designing system thinking techniques, known as Fuzzy Cognitive Maps (FCMs) to model and manage high-reliability organizations (HROs). Previously, Ahmed worked as a change management specialist, change leader, safety manager, and field engineer.
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