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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, 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: (1) 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 (2) 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.
A three-dimensional tech strategy, enabled by cloud, can drive market value
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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.
Maturity matters and can lead to 3x the market cap:
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.
A platform focus can supercharge value, showing 3x market cap increases:
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.
Cloud investments show 2x the immediate and 3x the long-term value for market cap versus cyber investments alone—with cloud cyber strategies important to any digital transformation:
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.
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Read the full report, A three-dimensional tech strategy, enabled by cloud, can drive market value, to learn more.
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