WHY IT MATTERS: Digital Transformation

Enterprise architects still have an important role to play at large incumbents, but they need to evolve in three ways.

A global survey on Enterprise Architecture. Topics include IT Complexity, the evolution and scope of current EA practices, and the tangible benefits of investing in higher EA maturity.

Focusing on business processes can lead companies to end up with multiple systems that perform similar functions, such as customer-relationship management. Concentrating too much on technology can cause EA teams to organize their work around building applications rather than enabling the business.

Digital transformations are, by their very nature, complex. There are multiple moving parts, integrated processes and technologies, and the need for expertise that cannot already be found in the company. In most firms, however, there is a small cadre of technology professionals who can impose relative order on the proceedings. CEOs and CIOs should consider the benefits of pulling enterprise architects closer to the center: bringing them to the table with business leaders, devising metrics that reveal the value of their work, and creating the type of incentives that will challenge them and prompt them to stay for the long term. Such an approach is critical not just for limiting risk and protecting against the potential challenges and downsides of digital transformations but also for ensuring a clear upside—a close and lasting partnership between the business and IT.

Building on the expanded definition of the term “digital”, we introduce in figure 5 the Digital Transformation Framework (DTF), a frame of reference to guide digital transformations. At a high level, the (DTF) has one foundation layer and three pillars.

Starting from the bottom, the framework has its base rooted in cybersecurity, a critical dimension, given the degree to which the digital world and its underlying economy is consistently under attack. Moving to the top left corner of Figure 5, the first pillar of the frame of reference is defined. It is labeled “Digital theme”, and proposes six key categories to logically organize the levers that organizations can pull to become digital. The second pillar, labeled “Customer Orientation”, suggests that clients, whether internal or externally facing an enterprise, are at the heart of any digital transformation. Finally, the last pillar, labeled “Competency Level”, indicates the level of excellence and efficiency an organization would like to achieve, for a given digital theme, as a possible way to distinguish itself from its competitors. The Competency Level pillar offers three possible distinct values: “Competitive”, “Industry” and “Minimum”, as shown in the diagram below.

Digital transformation - extending and exposing business processes outside the organisation - by implementing a digital strategy – a statement about the organisation’s digital positioning, operating model, competitors and customer and collaborator needs and behaviour through the delivery of digital solutions defined in a digital architecture – a future state application, data and technology view to achieve digital operating status - is potentially (very) complex. Digital architecture does not exist in isolation entirely separate from an organisation’s overall enterprise architecture. Digital architecture must exist within the within the wider enterprise architecture context. Enterprise architecture provides the tools and the approaches to manage the complexity of digital transformation. 

The enterprise-architecture (EA) department can play a central role in reducing the complexity associated with digital transformations. Most companies have a dedicated EA group embedded within the larger IT organization. This group typically oversees the entire systems architecture, including business processes and IT infrastructure. It helps to establish rules for and processes around technology usage to ensure consistency across business units and functions. As such, this group can help the CEO and others on the senior leadership team redesign their companies’ business and IT architectures so that they can avoid some of the pitfalls cited earlier and compete more effectively in a digital era.