The Digital Transformation Path Must be Chosen on the Combined Impact of Technologies on the Enterprise Big Picture
A problem for the digital transformation today is that Board of Directors do not understand technology. But, should the Board of Directors be selected on technology acumen too?
That companies seldom have technology savvy leaders we already know because the technology background has been, more often than not, looked down upon. Technology was considered, until recently, only a costly implement. Well, the Board members were not chosen on the technology acumen criteria anyway. But, the truth is that it is hard enough for technologists, consultants and analysts to keep up with the digital technology progress, nevermind the business directors.
Nevertheless, the problem the executive lot is confronted with today is not only that without the latest technology their business can hardly survive the competition race, but also that the digital evolution is increasingly outpacing the current business rate of change. That is, we are going through a digital revolution rather than an evolution. Some suggest that technologists or CIOs should sit on the company boards. But, to start with, the board meetings are for making business rather than technology decisions.
Anyway, since digital innovation and transformation come rather in conflict with the IT mission to keep the business lights on, which in practice means the fewer changes the better, CIOs have an inherent conflict of interest and, as such, they should be the last people considered to make such technology decisions or sit on the board. The CIO’s main task and skills are to make sure that the IT operates five nines rather than plotting the digital future of the enterprise.
Yet neither the Strategy Directors, CMOs, nor the technologists can decide on the technologies adopted in the digital transformation. Strategy Directors do understand the business needs enough to establish the strategic directions, but they would not be able to pinpoint the technologies which realize the best the direction until the technology impacts are translated into business impacts. The CMO’s scope is products, sales and marketing strategies, rather than the technology of operation of the enterprise. Technologists have the know-how, but not the big picture of how well technologies serve the enterprise. And so on.
In any case, what the executive lot has to make sure is that the Digital Transformation path is chosen on the combined impact of the new technologies on the big picture of the enterprise rather than on the merits of technologies taken in isolation. That is because the digital impact is not so much in IT, but on the future products, business models, processes and the enterprise organization itself.
Think of the new enterprise business models imposed by technology progress such as:
1) The sharing business model or in other words enterprises such as Uber, AirBnB, consisting of participating resources supplied by many rather independent participants, usually geographically dispersed so that they can provide local services. The digital technology enables an enterprise to coordinate the geographically spread participant labor and the resources into the virtual enterprise.
2) The outsourcing of IT to the Cloud
3) The outsourcing of an entire business process to suppliers
Nevermind the new remote work business model pioneered during this crisis, but which is set to stay for the benefit of all parties and in particular, the environment.
Hence, the up and coming Cloud Enterprise is a virtual enterprise which Value Chain consists mainly of services outsourced to a Cloud of IT, Business Services and remote Labor & Resources suppliers.
The point, so far, is that all the above is made possible by the digital technology today. In this context Enterprise Architecture and Security become crucial. Because, how can you outsource a service if you don’t know its dependencies on other services or if you cannot protect the remote interactions?
So, what the board and the executive lot need to understand and agree upon is not the technologies themselves, but the projected enterprise big pictures realized by technologies in various end architectures. Drawing this big picture, architecture is not a job though for the Board, Strategy Director, CIO, CMO (Chief Marketing Officer) or technologists.
The digital, rather than becoming a top management expertise, should be the task for the new Emerging Technologies and Enterprise Architecture functions.
A team of technologists should produce a knowledge database with the emerging technologies relevant to the enterprise. A technology record would consist of descriptions, sources. position in the hype cycle, associated costs, risks… value propositions and recommendations. The better the technologies records the better the decision making.
The Chief Digital Officer will lead the new emerging technologies function. The role of the Digital Chief Officer is to create and manage an Emerging Technologies knowledgeable in order to:
.- Analyse all technologies and sift them
.- Categorize technologies on impacts on the enterprise automation, communication and collaboration, decision making, data and content management, products…
.- Produce value propositions for each technology
.- Promote technologies on the path of acceptance
.- Organize trials with go/no-go stages of realization
Yet, even with the new Chief Digital Officer and the emerging technologies function, the enterprise is no wiser with regard to the digital transformation. That is because to be evaluated in context, the technologies must be first projected onto various target architectures for the enterprise taking into account not only all the technology interactions, dependencies, redundancies and roadmaps, but also the future end to end business flows and organization.
Hence, the Enterprise Architect, who must chose, map and combine all new technologies on the future enterprise picture in various scenarios, becomes the key player in the digital transformation.
The role of the Enterprise Architect in the digital transformation is not only to map and integrate the technologies in the enterprise big picture in various scenarios agreed with stakeholders, but to ultimately produce the report for the executive lot and board examining choices, exhibiting business cases and business models and making recommendations.
Yet, as a note, the Enterprise Architect is not the usual enterprise wide IT Authority of today as often assumed, but the Modeler of the Enterprise.
Yet, while the Digital Technologies will change the future, the reality is that the enterprise needs to focus on its business rather than on the ever changing digital technologies landscape.
That is because not every company can afford the investment in technology and its expensive eco system of specialists, training that had to be maintained.
Thus, the enterprise should become as technology agnostic as possible. But, the digital enables the technology agnostic approach as well.
Here are the principles of digital transformation that insulate the enterprise from technology change:
1) Encapsulate technology behind interfaces in SOA like services that hide the technology
That is because complexity, in order to be conquered, must be divided and encapsulated in modules which can be dealt with in separation by different parties.
2) Outsource the most challenging technology services to specialist/cloud companies
Discover Past Posts