Are technology and business visions merging?
May 19, 2021
The Accenture Technology Vision 2021 offers five key trends (Stack Strategically; The Mirrored World; I, Technologist; From Me to We; Anywhere, Everywhere) all of which point to technology becoming even more central for all organizations. The key message? Leadership is becoming indistinguishable from technology leadership.
Revenue agencies fit into this reality. While CIOs have almost never been considered for the Director General or equivalent post, as technology emerges as the core capability, it feels inevitable that more will follow the path of Markku Heikura once CIO, now Director General, at Vero (Finnish Tax) in taking the helm.
The Accenture Technology Vision points to why this will happen: business and technology strategies are converging in all industries. Whether vehicle manufacturers, retailers, media, utilities or indeed governments, technology capability is becoming a critical point of differentiation. Many revenue leaders agree. Our research found that:
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48%
of revenue respondents strongly agree their organization’s ability to generate business value will increasingly be based on the limitations and opportunities of technology architecture.1
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Stack Strategically
In this blog, I’ll look at the first of the five key trends: Stack Strategically. This addresses the core message that business strategies and technology strategies are becoming inseparable—even indistinguishable. At the same time, enterprises have more technology choices to make than ever before. With its emphasis on the more real-time connected tax agency, the OECD Tax 3.0 report echoes this message.2
So what’s changing? Custom development is undergoing a renaissance as businesses seek to differentiate through technology. Cloud providers offer faster, lower-cost platforms for development. COTs (commercial off-the-shelf) providers are expected to provide open APIs to enable access to logic and data layers. Technology is expanding its footprint to include natural language services, machine learning and many new “as-a-service” offerings. And of course, the functionality being provided by technology continues to grow and be ever-more mission-critical for businesses.
OECD Tax 3.0
Technology is paving the way for the realization of the OECD Tax 3.0 vision. However, the pace of change in taxation, business and lifestyles, means that we cannot anticipate future business and technology demands. Instead, architectures must be strategically layered to enable rapid extensions and revisions as needed.
The stack strategically message emphasizes the importance of carefully constructing the layers in the architecture to enable this adoption of new functions and technology. Microservices are broadly aligned with this thinking, as they offer the capacity to change and add services with minimal disturbance and maximum speed. Such thinking aligns with the direction being set by the industry-leading revenue clients we work with.
A complex proposition
Equally clear, however, is that it’s far from straightforward to construct applications based on such architectural principles. To start with, data needs to replicated in multiple place to fulfil the needs of microservices. Even more problematically, large monolithic applications (that may be custom builds or COTs products) were not constructed with such an open approach to sharing the user interface, the logic or the data, in mind.
Business and tech merge
This all sounds very technical – why should the business care and why is business strategy essential in resolving such architectural dilemmas? Consider first the huge challenge almost all revenue agencies face today to modernize their complex, typically custom, applications which date back decades. Then think about the significantly increased dependence on technology (real-time or near real-time technology at that) to increase taxpayer engagement, as implied in the Tax 3.0 vision.
Taking advantage of the promise of Tax 3.0 for government, taxpayers and tax agencies requires a massive renewal of technology. Tax 3.0 sets out a direction, a road which agencies will travel and also one where the precise outcome is unclear as the business context, technology, and indeed taxation principles, are all rapidly changing.
So, the architecture of the future will need to adopt to change at a greater pace than ever before. It will also have to provide the foundation for a suite of applications richer and broader in functionality and even more critical to an agencies’ future. The understanding of that business future is critical to ensuring the layers are stacked strategically so they can evolve and adapt. The coming generation of technology implementations need to solve not only the scope in focus today, but critically the technology choices required to be strategic tomorrow.
Leaders must master technology
Technology leadership and skills are critical to making the right choices in “stacking strategically”. So is understanding the business strategy of the agency. And that’s why we see the increasing convergence of business and technology strategies. Revenue leaders see it too, with:
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86%
agreeing or strongly agreeing that their organization’s business and technology strategies are becoming inseparable – even indistinguishable.3
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The Accenture Technology Vision 2021 challenges technology leadership to recognize that they are not only charged with technology strategy but also with business strategy. At the same time, business leadership must think strategically about technology. The revenue strategy is therefore now a business and technology strategy. Have you seen a convergence of technology and business in your agency? I’d be interested to learn more about your experiences.
The Accenture Technology Vision 2021 has other important trends for revenue agencies, and I will be looking at these in follow-up blogs.
