With the advent of the digital economy, we find ourselves barraged with vast amounts of information readily available at our fingertips. Boundary-less Information Flow™, the vision of the Open Group, is more significant than ever from the macroeconomics of connected markets to the microeconomics of social media, mobile services & wearables. Digitization has greatly simplified business process and structures, but the technology surrounding it has become increasingly complex. This is particularly true for large enterprises.
So what is Digital Transformation (DT) and how does it impact enterprise architecture?
According to Wikipedia, Digital Transformation (DT) is the change associated with the application of digital technology in all aspects of human society. DT means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhancing and supporting the traditional methods. The most simplistic definition of DT is: To go paperless, but in reality it cuts through the fabric of society and has applications entrenched in government, mass communication, medicine and science. The definition of digital is continuously evolving. It is expected that in the near future Internet of Things (IoT) and cryptocurrency may well become part of DT.
Digitization is more than creating a responsive web site or a social media strategy. It can have varying definitions depending upon who you talk to. On one hand there is the ‘bolt-on’ strategy, which typically means adding new digital channels to existing touchpoints and on the other hand there is the ‘Digital Transformation’ approach which is a full on commencement of the business. It encompasses the formation of new business models & business processes, culture shifts, and re-evaluation of the very fundamentals of the enterprise.
Enterprise Architecture can be broken down into four major domains, that of Business, Application, Data and Technology. Generally speaking no domain is more important than the other but all architecture efforts are driven by the needs of the evolving business landscape. The heart of innovation for any business is the ability to recognize change and the ability to adapt to customer behavior & needs, new laws & regulations and benefits from new technologies. Business Transformation is the precursor to innovations in data, application and technology architectures. Business Transformation is primarily motivated by the desire to improve business processes. Business process being people centric are crucial to DT. DT is all about digitizing operations, products and services by getting to know customers better, improving service levels and digitizing customer experience. While the opportunities for digitization are numerous, a few examples of Business Transformation activities are covered in the next section (No surprises… it’s all about people)
Understanding Customers: understanding customers include delivering both a better customer experience as well as a better user experience. DT is an opportunity to carve out new experiences. Customers seek outcomes and experiences while organizations continue to sell products and services. Instead of reacting to technology the goal is to invest in informed models that help businesses recognize opportunities, overcome challenges, and make decisions to stay in step, if not ahead of digital customers
Customer Sales: Innovation in sales is not limited to inbound marketing. It’s about using analytics to understand customer’s purchasing habits, using location based lookups to recommend services or products or integrating myriad insignificant facts to provide a holistic experience that stitches together products and service offerings from diverse sources.
Multichannel Customer Touchpoints: Digital does not mean wholesale replacement of existing technologies. Digital does not mean just putting a mobile front end, adding a social collaboration feature or creation of multiple channels for communication. It means seamless integration of the different channels. The convergence of mobile, social, cloud, analytics (big data), and unified communications provide starting points. Bringing external data (Ex. From legacy systems) to internal systems creates new patterns that provide better data for testing out new business models. These are all opportunities to rethink the technology strategy so as to align with the business objectives of DT.
Digitizing the Business Process (Front and Back Office Functions): Automation can be anything from eliminating paper trails to the automation of a manufacturing plant to achieve economies of scale. The primary objective of automation is to unburden the employees from meaningless repetitive tasks so that they can focus on innovation and creativity.
Office Virtualization: More and more companies are offering their employees the option to work from home. With the advent of high speed communication and the internet, virtual work places, conferences and collaboration through popular applications (like Skype and slack) are becoming a popular option. Savings incurred by leveraging new technologies is significant both in terms of time and cost.
Informed Decisions: Data is at the heart of digital evolution. Every touch point, every click, every interaction provides a digital treasure trove of contextual information. Organizations need relevancy delivered in real time. Anticipating future behavior rests on relevance of data in the present. The goal is to move from data to decisions based on information.
Digital Ecosystem: No company can succeed on their own. Organizations should contribute to industry consortiums and also build their own ecosystems aligned around the organization’s self-interest. Organizations succeed when they are part of an ecosystem of co-creation and co-innovation.
Management Leadership: Success begins at the top. Digital DNA (Leadership, Talent, and Organizational Design) requires strong leaders who are not afraid of taking risks and identifying new approaches. DT requires solid leadership to motivate change. It also requires a vision for transformation. Using architectural frameworks for digital proficiency with a talent pool of digital artisans, organizations can infuse digital DNA throughout the organization’s culture.
TOGAF®, an Open Group standard recommends ADM as a good place to start all architecting efforts; other frameworks like, DODAF, FEA and methodologies around them can help to enrich the ADM. The important point to note is that ADM is an iterative method. Evaluating through the ADM helps one to consider the kinds of customizations that are required for the enterprise in scope. The key focus is to mature the architecture incrementally.
While there are many challenges in implementing DT in enterprises, due consideration given to some of the factors below will minimize letdowns and disappointments.
Managing Stakeholders: In a complex engagement like implementing DT, stakeholder management can be challenging. Understanding the stakeholder’s needs can be daunting. Organizations can get stuck in tackling stakeholders and not be able come out of the labyrinth for months or years. Having a communication model will be beneficial to recognize the various Enterprise Architecture Views required in meeting the objectives of different stakeholders.
Goals, drivers and vision: The Architecture Vision is essentially the architect’s “elevator pitch” – the key opportunity to sell the benefits of the proposed development to the decision-makers within the enterprise. The goal is to articulate an Architecture Vision that enables the business goals, responds to the strategic drivers, and conforms to architecture principles. The recommendation is to lay down the EA vision as a subset of the organizational vision; however, the alignment needs to be clear.
Laying down Milestones: The recommendation will be to execute the road mapping activities under the EA initiative of the DT. Architects engaging in projects allow the creation of transition architectures that will rightly align technology from a Business Perspective and will help to bind all the stakeholders to a common cause.
Enterprise Agility: Historically enterprise architecture work is disruptive and slow to progress. This is because EA’s are driven toward a bigger vision. As delivery cycles become shorter and faster the enterprise architecture needs to adjust to facilitate that. Business agility means being able to achieve diverse and dynamic business outcomes in changing business environments, without impeding individual business outcomes. Successful DT requires a solidly agile approach to architecture. Organizations must pull together Cloud, mobile, Agile development, and DevOps to drive rapid product development across multiple teams, each of which is responsible for its own continuous delivery. EA’s that can architect their organization for increased business agility can position themselves to influence and lead DT agenda, by providing the decision support system to focus and deliver on the right digital strategies. When the enterprise architecture group is directly involved in digital-transformation projects, the documentation and communication between business and IT stakeholders improves significantly. What’s more, organizations are likelier to focus on capturing tangible benefits from the transformation—an important factor in mitigating the risk of black swans—and to devote more time and attention to planning. They may also be able to launch products and services more frequently, given the reduced complexity.
TOGAF®’s, greatest successes are when enterprises use it to achieve specific, measurable business outcomes. As one moves from the initial to target architecture, it is important to have a clear vision of what needs to be achieved. Through architectural decomposition the solution is broken down into smaller blocks and the blocks implemented iteratively. Enterprise architecture helps to maintain the stability of the System, after each viable iteration. This is achieved in the transformation process by the seamless flow of information across all business functions with clear measurable benefits during each iteration. Architects engaging in projects move away from delivering architecture artifacts in the early phase of the project to a constant set of evolving decisions that are reevaluated throughout the course of the transformation.
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