No organisation would claim that they have completed their digital transformation. Digital transformation has never been a one-off initiative – instead it is a continuous cycle for as long as the business has new objectives in sight, and these objectives will always evolve as new digital technologies and trends emerge, lest the organisation becomes stagnant and is overtaken by its competitors.
An IDC definition goes: “Digital Transformation is the approach by which enterprises drive changes in their business models and ecosystems by leveraging digital competencies.”
Notably, digital technologies are commonly associated with the purpose of achieving three goals – optimise internal operations, improve interaction within the organisation’s ecosystems, and create products, and services that customers want and expect.
However, the value of having digital transformation that leverages digital technologies, goes beyond these three goals. It can also be used to address, and strengthen five areas that are being digitally disrupted and for which, some change is necessary for the organisations to successfully adopt the right digital approach.
From the research house’s point of view, digital transformation is multi-faceted, involving five different types of transformation, for the whole initiative to be truly organisation-wide, pervasive and holistic.
Namely, these five areas are Leadership, the customers’ Omni-Experience, Information, Operating Model and Worksource.
Enter Digital Enterprise Architecture
According to IDC, managing and controlling complexity means having to understand all the different parts of the enterprise, and how they fit together, how to bring in new parts, and how to keep everything working efficiently.
Unlike the computerisation era where everything was much simpler, the complexity of managing changes in this digital era has increased exponentially.
Added with the fact that we have continuously, and blindly performed changes within our organisations using the same traditional approaches, IT environments have become more chaotic, resulting in ever-increasing costs, reduction in organisational responsiveness and speed to response, as well as decreasing flexibility and adaptability to disruptions.
Instead of ICT being a “saviour” when it was first introduced back in the computerisation era, it is commonly associated with being a “cost centre” nowadays – this is the real and painful experience that we face in today’s digital era.
Our traditional solution/approach is no longer effective, and it needs to change.
Hence, the reason why Digital Enterprise Architecture (Digital EA) is essential, because it provides better and clearer insights of internal and external forces, allowing better calculated decisions to be made. Examples of these decisions are like: how best to source and integrate digital technologies, which projects are most strategically aligned, most important, and has the highest return, how should a particular project or technology be implemented or if it needs to be suspended if necessary, and so on.
All these decisions that Digital EA can help organisations make, can be mapped back to each of the five areas of DX.
But where exactly, does Digital EA sit, within the bigger picture of an organisation?
According to Senior Research Manager at IDC Financial Insights, Handojo Triyanto, “IDC has created a leadership framework for business and IT leaders to deliver on the promise of digital transformation for their enterprises, that supports the Digital EA capability and innovation, as well as the realisation aspects to achieve a Connected Enterprise.
“The framework consists of three dimensions called Innovation, Integration, and Incorporation, and is called ‘Leading in 3D (dimensions)’. Strategic Architecture takes a role in the “Integration” dimension and becomes the key discipline in leading successful Digital Transformation journeys,” he explained.
I can’t emphasise enough, how important it is for an organisation’s leadership to foster enterprise-wide digital culture that embraces governance and change.
For a successful digital transformation, the leadership enables and empowers many things to happen, for example increasing awareness and insight of the business ecosystem, adopting innovation as a business model, adopting the Agile method for planning and governance, and last but not least, enforcing the valuation criteria to channel funding to strategic, enterprise-wide digital initiatives.
Therefore, without leadership transformation through Digital EA, it will be difficult to foster enterprise-wide digital culture, a very key component to have for the organisation to successfully navigate through the entire digital transformation journey.
Omni-Channel Experience Transformation
Consumption habits are evolving rapidly, enabled by new digital technologies and demand for simplicity, convenience, and instant gratification.
As a result, all the points of interaction with customers have to evolve along with customer needs. Over-the-counter communications made way for the telephone and online interactions; and it is in the online world where possibilities are developing exponentially with emails, mobile messaging, social media, robochats, video chats, and more.
An enterprise may lead the way forward by eliminating face-to-face customer on-boarding, with virtual customer service, a mobile apps that completely does away with physical service agents and physical branches; all customers need is a mobile phone and connectivity to complete their transaction requirements.
But in the meantime, what is happening with internal organisation processes which have to support all these?
Processes have traditionally been designed around departments, and they end up being siloed off from each other, as departments can be territorial, especially when it comes to functions and data. On top of that, online teams tend to be separated from offline teams as well, each with no idea what the other is doing, and how it will impact the organisation as a whole.
The digital trend has started to change these internal processes. Processes need to start to take into account the customer journey, whenever they engage with a company’s products and services, from the very beginning up to the end, in a digital way. As part of a Digital EA implementation, an organisation needs to think about the Digital Customer journey experience, and how digital processes could be incorporated to ultimately elevate their experience, and achieve wider organisational goals.
Management of data is one of the keys to supporting the omni-channel experience. To be able to extract insights and that can provide value and utility, data across all new and existing sources must be integrated and made consistent.
After applying big data and analytics technologies upon all this information related to customers, markets transactions, services, products, physical assets and business experiences, not only can new revenue streams be generated, but decision-making becomes informed and more impactful.
To achieve this, an organisation needs to have their information architecture modelled and connected, ideally as part of a more holistic Digital EA implementation.
Operating Model Transformation
As everything starts to come together, the next thing to work on is making business operations more responsive and effective, by leveraging digitally connected products/services, assets, people and trading partners.
One organisation’s operating model may not differ much from another business’ operating model. To the customer who is outside the organisation, they may just glance at the surface and not see anything unique about one particular company.
But, GRC or governance, risk, compliance, affects internal operations profoundly – how effective and efficient operations are depends on GRC – and GRC would be the one main element that sets you apart from your competitors.
Digital EA adheres to this framework and infrastructure to support higher levels of availability, reliability, and scalability while managing costs, complexity, risks, and redundancy.
Operating Model Transformation
People, are any organisation’s most valuable resource. Recognising who your internal and external contributors towards organisational values is one thing, but optimising their productivity and flexibility is another.
This requires taking into account, IT talent and skills management, as well as continuous competency development programme for them to achieve, and sustain the desired competency level required to perform their roles effectively in today’s digital workplace.
Using the right resource to achieve the right business objectives, is very important, especially if you want to leverage the myriad of cloud services and externally brokered services out there.
Hence, professionals need to acquire the relevant skillsets as defined by Iasa in its ITABoK skillsets library. This body of knowledge is also supported with professional certifications of CITA-F, CITA-A, CITA-S and CITA-P.
According to IDC, strategic architecture is essential for managing the complexity and change inherent in the digital economy.
IDC’s research vice president for Strategic Architecture in IDC’s IT executive program, Mike Rosen, said, “CIOs who want to participate and lead in their company’s digital transformation must have an effective, forward-looking architecture function.”
Adopting and applying Digital EA, can ensure a digital transformation is established as a culture that is truly connected, and covers all the important aspects of an organisation.
This is imperative so that the organisation will be able to achieve its business goals, within the required time, using the allocated required resources, by performing changes based on the organisation’s actual needs, instead of blind assumptions.
By Aaron Tan Dani, Chief Architect, ATD Solution