When it comes to digital transformation, what do you think of? There are three common answers: adjust the organization chart, adjust the product line, upgrade the information system.
These methods may be right, but the transformation of enterprises is like “turning adults”, have to be based on the human body to deploy different prescriptions, the most people adopt the practice is not necessarily the most appropriate approach, and even if the drug list is the same, the proportion of prescriptions is not the same. Therefore, enterprises must first understand themselves, from the business, organization, information, technology and market-oriented assessment of self-physical fitness, in order to cure the disease. The pursuit of “Magic” is the most common enterprise transformation myth.
In addition, many business owners, fearing the fruits of their years of hard work, have been forced to “knock out the re-training” in the process of digital transformation. Harvard Business Review Global Chinese Traditional Edition: Total destruction is not the only approach, and numbers do not mean to knock back the practice.
Don’t knock out the re-practice
Building a fully digital enterprise is like planning urban re-engineering. It is of course a simpler and faster way to get rid of all the old areas and re-train them, just as architects like to design and build a building from scratch, without having to pull the skin of old houses without being limited to the “structural baggage” of old buildings, but it is not practical to recreate the city in a completely eliminated and re-trained manner. Enterprise transformation is like urban re-engineering, and there must be a trade-off between old baggage and new construction. Enterprise transformation is a high-complexity project, often involving a whole body, involving a wide range of levels, high-level power map, grass-roots organization staff, market business income and existing customer structure are affected. In order to achieve the goal of transformation, like urban re-engineering, fighting back is not the only way to transform enterprises. We believe that digital transformation is really about building digital capabilities by adapting enterprise architectures and mastering business opportunities in the digital age with data and technology. It’s not necessarily necessary to get rid of the re-practice.
Learn from urban re-engineering
Enterprise architecture is like a blueprint for a city, determining the future direction of the business. Therefore, the design of enterprise architecture must be from the market development, production processes, employee organization, enterprise functions, corporate culture, system architecture and other aspects of comprehensive analysis and consideration.
Harvard Business Review Global Chinese Traditional Edition, Digital Transformation Compares to Urban Planning The article suggests that the concept of urban planning can be used in enterprise architecture development strategies, for example, Dubai’s urban renewal strategy is to build striking landmark buildings, which in turn drive the business development of conservative societies, while Shanghai’s urban renewal strategy is to find a new hinterland that can be developed directly, starting from the horizon.
Enterprises to carry out “digital transformation” is bound to face a trade-off between the new and the old dilemma, need experts in various fields, jointly take stock of the status quo, sandboarding, the formulation of several development strategies, to the leadership to promote transformation.
Systemic problems with enterprise architecture
As with the structural problems accumulated in large cities with a long history, large enterprises generally accumulate structural problems between information systems and business models. In the case of banks, for example, branch desks and foreign currency counters operate independently, but are mutually causal with the core architecture of the bank’s systems, and if the information system is adjusted for the needs of one business unit, it may affect other business units, resulting in the following scenario cycle:
- Familiar business models face digital technology challenges
- Business models are highly dependent on established information systems
- The accumulation of large technical debts in the old information architecture has abducted the business architecture
The perennial accumulation of information architecture “technology debt” burden led to enterprises unable to adjust information systems flexibly, indirectly tied to the business model, so that the business end of the move, the past proud of the huge information systems but restrict the digital market needs of rapid response capacity.
Business and technology multi-head carriage
Business personnel do not understand the development of information technology, technical personnel do not understand the rationality of business needs, the former lack of technical knowledge, the latter behind closed doors to build cars, in the digital age, the need for close collaboration between the two.
If the enterprise manager lacks the architectural thinking, let the organization in the political and power sector, in the way of multi-headed carriage, not only the development of technology lack of practicality, business processes also lack the ability to adapt. Warm water boiled frogs, enterprises will eventually lose competitiveness.
Stacked bed frame house-style information system
Even if business and technology units collaborate frequently, success may not be guaranteed, and in enterprises, different business units tend to be independent, and the development of information systems focuses on improving their own business efficiency. If business and technical staff in the “I ask you to develop” way of collaboration, business units indirectly interfere with the system design, will eventually lead to a high degree of information system design, functions, difficult to maintain, this is the beginning of the barn effect .silo effect. When many different units of information functions in the entire enterprise’s information system in-layer interaction impact, even in the development of the system each business and technical units have been as flexible as possible, the future business units in response to market changes and adjust to each small change, the technical staff are involved in a big project.
Barn-style vertical architecture
The information systems generated by the barn effect can not only be highly overlapping (increasing costs), but also result in significantly reduced collaboration efficiency when the business requires a high degree of horizontal collaboration within the business, as political and technical issues are difficult to integrate. This vertical information system architecture to the era of digital boom, so that the system integration difficulties on the surface, if the future of foreign collaboration and ecosystem trends more frequent, the barn effect will make the brilliant enterprises fall to the bottom.
The Harvard Business Review Global Chinese Traditional article ” To build IT systems, the company needs blueprints” to explain the lack of architectural blueprints for information systems, “with the development of the chaos” under the metaphor of winchester mansions in San Jose, California. The solution to avoid this mess is to establish the principle of enterprise architecture (EA): to establish and implement a master plan for the creation of information technology systems.
If the development of enterprises lack of comprehensive architectural analysis of the output of “enterprise structure thinking”, headache, foot pain, will cause digital transformation is the mystery of information system transformation, and in the absence of architectural blueprint to directly start the transformation of information systems, it can be foreseen that the new system will still overlap bed frame house, stuck business development.
Once the problem is clarified, it is not difficult to find out the “secret” of digital transformation in enterprises.
Digital transformation requires a comprehensive vision of the enterprise architecture
Business leaders rely solely on familiar patterns that have made it difficult to successfully drive digital transformation, but can also create common blind spots such as:
Digital transformation is the transformation of information systems
Digital transformation should prioritize the replacement of the most complex and traditional core systems of the information architecture
- The development of digital channels is digital transformation
- Digital transformation is the massive introduction of digital software and information technology
- Wrong application of new technologies
Faced with complex business structure and rapid development of information technology, how can leaders effectively and clearly grasp the overall vision of the enterprise from an architectural point of view while at the same time?
The Open Group Architecture Framework is a specific set of enterprise architecture frameworks and methodologies proposed by the International Open Standards Organization in 1995, including the role and operating model of a complete enterprise architecture organization. Many large and medium-sized enterprises in Europe and the United States have used TOGAF and the framework extended by it, successfully to the height of leadership, to promote the development and implementation of enterprise structure.
These methodologies and frameworks mainly include the concept and thinking of enterprise architecture, the configuration of functions and roles of enterprise architecture, and the operating mechanism. The specific way to construct the enterprise architecture function is to cultivate and build a highly viewed enterprise architecture team, by the chief enterprise architect (Chief Enterprise Architect) through the enterprise architecture framework, organize architects in various areas of expertise, break away from the organizational division of labor, stand neutrally from the perspective of leaders at all levels, analyze and build a comprehensive enterprise architecture for leaders, clearly analyze the problems facing the development, put forward development strategies and planning recommendations, and provide decision analysis and decision support to assist leaders in making key transformation decisions. Figure 1 shows the organizational look of the enterprise architecture team in the case of a financial holding company.
Once leaders have a comprehensive architectural vision, the next challenge is to be able to start digital transformation correctly and robustly. The Harvard Business Review Global Chinese Traditional Article How to Successfully Achieve Digital Transformation the concept of a five-stage process for digital transformation, and the specific work of enterprise architects is highly consistent with these five-phase concepts:
- Analyze the enterprise business architecture in an enterprise architecture approach, “identify the starting points” and present the Business Domain Map
- Analyze the corresponding layers of architecture, “list” and generate the corresponding as Is Architecture
- In line with the direction of the possible development model, envision a blueprint for the future architecture . Sandboard plays into the symbiotic relationship between execution challenges and business transformation, and proposes Transformation Strategies
- Propose the Change Roadmap and start trying to “execute”
- Establish the Transformation Planning Office to “track” the progress of the transformation programme and maintain architectural integrity and consistency of transformation objectives through Enterprise Architecture Governance
Enterprise architecture thinking and ability can not guarantee the success of enterprise transformation, but stand at the top of the enterprise commanding heights from top to bottom, to carry out the whole analysis, accurate positioning, provide and master the transformation plan, in order to organize and systematically “touch the stone across the river.”
Please free to contact me for any fruther information or clearifications.