For the last seven years, Forrester researchers have been busy trying to understand what makes successful companies successful. What they found was that companies that are obsessed with their customers’ success grow 1.8 times faster than all other businesses, regardless of industry or peer group.
According to a recent Forrester report, “The State of Future-Fit Technology Strategy, 2022,” only 3% of all businesses fall into this category. Forrester calls these companies “future-fit.”
“The goal of [future-fit] is to make the customer successful in whatever they’re trying to do,” said Bobby Cameron, a Forrester analyst and one of the report’s co-authors.
For future-fit companies, customer success is the first priority, according to Cameron. Amazon is a good example of this mindset in action—insofar as Amazon takes care of everything when an order is placed, so the customer almost never has to interact with the company’s tens of thousands of independent vendors. Customers may not even know that those vendors exist. The experience is seamless.
Future-Fit Companies Use Technology Differently
Unlike their peers, future-fit companies use technology to quickly pivot whenever their market or the needs of their customers change. As such, they take an outside-in approach to deploying customer-facing technologies. Outside-in technology deployments are usually platform-based and depend on fast user-feedback cycles to understand if the technology is working or not. Future-fit companies then check to see whether project goals were achieved—using data and KPIs to monitor customer interaction over time.
“If I am deploying technology that’s outside-in, I can’t tell customers to use my technology,” said Cameron. “I’ve got to test and discover what works, so I’m constantly putting stuff out there with metrics and checking, ‘Did this move me toward what the [customer’s] interests are?'”
Traditional and modern firms are less likely to take this approach. Traditional firms (44% of the businesses Forrester surveyed) tend to have siloed customer experiences. These firms, Forrester reports, look to technology for streamlining business processes, cost reduction, consolidation of technical debt, and other internal-facing activities.
Like future-fit companies, according to the report, “modern” firms (37% of surveyed businesses) deploy end-to-end solutions and are cloud-first, platform-based, and customer-committed. But, unlike future-fit firms, they prioritize functionality over enhancing the customer experience, according to Forrester.
“Technology is transforming in parallel with the organization’s level of customer obsession,” said Cameron. “What I mean by that is IT organizations are very important to the business’s success. It also means IT can’t do it by itself. It’s got to move with the business.”
Platforms, Practices, and Partners
“Future-fit organizations are oriented towards cloud-first platforms, like a content platform, so they’re not shaking the whole tech stack every time [changes need to be made],” said Cameron. “They’re putting thin layers of process and technology on top of continuous delivery. . . they can reconfigure the business rapidly without disrupting themselves or shutting the business down.”
The vast majority of future-fit (87%) and modern (80%) IT leaders plan to optimize the value they get from external partners and suppliers over the coming year, compared to just 58% of traditional firms. Most future-fit and modern organizations (90% vs. 79%, respectively) also report that they will be pursuing a multi-cloud strategy, compared to just 58% of traditional organizations. Similar percentages of future-fit and modern IT organizations plan to increase cloud-native development and decoupling applications from infrastructure while building reusable architectures. This compares to only about 57% of traditional firms that will also be pursuing these strategies.
“A lot of [traditional firms] will tell you, ‘Yeah, I’ve got a bunch of agile stuff,'” said Cameron. “Then you say, ‘Well, are you driving toward a project with fixed requirements that you have to deliver?’ Most of them will say, ‘Yes.’ That’s not agile. You can’t scale it.”
From a practical perspective, IT executives at future-fit firms share accountability for business outcomes with their business counterparts. Nearly all future-fit IT organizations (98%) organize by product—compared to 82% of modern and 62% of traditional IT organizations. And the vast majority—89%—manage technology budgets based on business outcomes. While an almost equal number of modern firms typically fund technology initiatives based on business outcomes, only 57% of traditional firms consider this a high priority.
“Business and customer value take an increasingly central place in tech strategies as organizations become more future-fit, with an associated increase in product-aligned practices,” the report said. “Shared accountability for a common business outcome frees individual teams to move forward based on progress toward the outcomes—without the burden of constant review and approval of changing requirements.”
Additionally, over the coming year, 94% of future-fit organizations plan to adopt agile and lean budgeting techniques for financial management. This compares to 89% of modern firms and 55% of traditional firms.
Co-innovation with outside technology partners, too, is an important component of future-fit firms’ technology and digital-transformation strategies. Almost all (98%) of IT executives at future-fit organizations agree that collaborating with partners and suppliers to build better products and services is a high priority. This compares to 92% at modern firms and 64% at traditional companies.
Over the coming year, most IT leaders at future-fit and modern organizations (78% and 67%, respectively) plan to develop co-innovation third-party partnerships with shared rewards designed to incentivize their partners to help them deliver better business outcomes. This compares to just 54% of traditional firms.
Adaptive, Creative, and Resilient
To this end, future-fit IT organizations use technology for more than improving cost efficiency and productivity. According to the report, they also use technology to make themselves more adaptive, more creative, and more resilient.
Over the coming year, 87% of future-fit IT leaders plan to upgrade, refresh, or consolidate hardware or software—compared to 82% of modern firms and just 58% of traditional companies, according to the report. Future-fit IT leaders also will be increasing their use of agile development teams (81%), prioritizing the use of open-source tools (80%), and bringing more development in-house (84%).
Modern firms boast similar numbers in all three categories, but traditional firms lag significantly; only 54% of traditional firms will be increasing their use of agile, only 57% will be using more open-source tools, and only 56% will be bringing development work in house.
Additionally, according to the report, future-fit firms lean heavily on data-driven decision making and predictive analytics to get a deeper understanding of existing customers’ needs and to go after new opportunities.
- 87% of surveyed IT executives indicated that they use data analytics and insights to create differentiated experiences, products, and services.
- 85% reported that they develop enterprise-wide standards for the management and use of data and analytics to drive cross-team collaboration.
- 72% reported that their company monetizes data assets through their products and services.
- 89% reported that their organization’s innovation strategy targets specific business-line objectives.
More than Tech
All of this said, Forrester nevertheless points out in its report that all the technology in the world is useless if organizations cannot adapt quickly enough to put it to work. As such, the overwhelming majority of modern and future-fit organizations believe innovation is critical to becoming more resilient; they nurture cooperation and collaboration, empower their teams to take risks, and they embrace change.
“Breaking down silos through cross-functional teams, encouraging collaboration, and creating a change-confident culture are crucial behaviors for the success of future-fit organizations . . . with 76% of business and technology professionals at future-fit organizations strongly agreeing that their organizations’ structures can easily absorb major changes to the business,” reads the report.
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