Does Your Technology Roadmap Have a Financial Roadmap?

Does Your Technology
Roadmap Have a
Financial Roadmap?
By Russell Villemez
https://by.dialexa.com/technology-roadmap-financial-
roadmap

Dialexa
We are on a mission to make every company
a great technology company.
We work with organizations to define and
execute digital transformation strategies to
improve business operations and customer
experiences. Our services include:
• Multi-Year Technology Roadmap
• Platform Engineering
• User Experience Design
• Custom Software Development
• Hardware Prototyping /IoT

Technology lifecycles are
getting shorter and shorter,
pushing CIOs to innovate faster
to help their companies keep
up with competition. Get the full write up of this slideshare at https://by.dialexa.com/technology-
roadmap-financial-roadmap

As the second wave of
digital transformation rises,
it’s easy for companies to
become enamored by the
prospects of adding
virtual/augmented reality,
Internet of Things, machine
learning and more to their
technology roadmaps.Get the full write up of this slideshare at https://by.dialexa.com/technology-

But there’s an important question to
ask when considering all this new
technology…
Get the full write up of this slideshare at https://by.dialexa.com/technology-

Does your technology
roadmap have a financial
roadmap?

As you fill out your financial roadmap, there
are three main themes to keep in mind—

1) Justifying a long-term plan,
2) Focusing on operating levers
rather than financial levers, and
3) The interlocking models
necessary for success.

JUSTIFYING A
LONG-TERM
ROADMAP

The day-to-day life of a CIO is filled with
constant pitches for new project ideas.

Sometimes these new ideas are pitched in the
greater context of the business and sometimes
they aren’t—

—but all of them are pitched as singular
projects.

The collection of individual projects
eventually leads to a complicated mess
of technology that makes it increasingly
difficult to adapt to new trends in the
long term.

One budget cycle and a handful of
projects won’t be enough to untangle
the technology complexity within your
organization while also capitalizing on
emerging technology opportunities.

This is why you need to build a
strategic, multi-year financial
plan to accompany your
technology roadmap.

But it’s important to note that the purpose of
your long-term financial roadmap isn’t to
reject every new project request.

Rather, you can use the financial roadmap to
shape project requests to fit the proposed
multiyear plan.

Shaping project requests rather
than approving/denying them is a
fundamental shift in your daily
operations.

However, the shift helps you remain
flexible as new opportunities emerge
so you can grow your business
without losing accountability.

FOCUSING ON OPERATING LEVERS
RATHER THAN FINANCIAL LEVERS

Your financial levers are the metrics controlled by
the CFO—debt to equity ratio, accounts receivable
turnover, P&L statements, etc.

While these are
important, technology
transformation usually
addresses the structural
cost components of how
a company makes
revenue.

The revenue/profit formula will vary
by industry and even by company, but
it’s something that all executives
intrinsically understand.Get the full write up of this slideshare at https://by.dialexa.com/technology-

For a services
business, the
financial lever
might be the cost
of customer
acquisition.

But the operating lever is the sales/marketing
process that grows your customer base—if you
can reduce acquisition costs while growing the
customer base, you will be more profitable.

Basically, focusing on operating levers instead
of financial levers means understanding the
formula for how your business profits and
competes in the marketplace.

Once you have this understanding,
you can align the capabilities of
your technology organization to
focus on the capabilities necessary
to achieve business metrics.

This applies directly to your IT
budget.

Your CFO has likely reviewed your spending
on things like travel, entertainment, bonuses,
training, and more—but these don’t drive
productivity in the tech organization.

By focusing on operating levers, you should
ask, “how much does my existing landscape
of tech assets cost to run every day?”.

When you have a roadmap to address this
question through something like automation or
virtualization, you can use the budget you’ve freed
up to align with the CFO’s formula for a profitable
business.

The key here is for CIOs to
work with the financial
roadmap in a way that
constantly focuses on
improving operating levers,
whether they are on the
business side or the
technology side.

When you focus on these operating levers, you
inherently achieve the necessary financial
outcomes that many companies currently focus
their roadmaps on.

THE INTERLOCKING MODELS TO CREATE A
FINANCIAL ROADMAP

There are three models in play here—the
technology model, the financial plan, and the
business model.

For a multiyear financial roadmap to successfully
support your technology roadmap, all three of
these models have to work together to build
momentum.

There has to be a cross-organizational
understanding that long-term success could
mean short-term difficulties.

For instance, the first year of the roadmap
will see low productivity in IT as investments
are made in the technology layer to reduce
operational costs.

But then once you
reach year 2 and
beyond, you build
momentum for
business/financial
success as more
budget is available to
address business
needs.

Once you get going with
all 3 models interlocked,
you will see ongoing
improvements in IT
budget productivity that
will translate directly to
business value.

Don’t fall into the trap of
thinking the success of all 3
models is linear—there will
be ups and downs at first
and executives (not just the
CIO) must adjust business
unit expectations
accordingly.

This will likely be the most
challenging theme as you try to
align a financial roadmap with your
technology roadmap.

As a CIO, your job is to find a
way to set up a dialogue with
your business partners and a
create an agenda for
executing in a way that isn’t
just valuable for the
technology organization.

You have to bring value to the
business itself.

This is partially going to be an
exercise in storytelling—painting a
picture of the current tech
complexity in the organization to
convey how important it is to align
the financial and technology
roadmaps.

P R O P E R T Y O F D I A L E X A L L C © 2 0 1 7 - C O N F I D E N T I A L & P R O P R I E T A R Y
Doug Platts
VP of Marketing
marketing@dialexa.com
If you are looking to undertake
a digital transformation
initiative, contact Dialexa today
and see how we can help make
your company a great
technology company.
Get the full write up of this slideshare at
https://by.dialexa.com/technology-roadmap-
financial-roadmap

Does Your Technology Roadmap Have a Financial Roadmap?

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