Organisations today must compete in an environment where traditional methods of conducting business are being replaced with new, innovative and disruptive models. Cloud, mobility and Big Data analytics are just some of the technologies that can help them do that. But how can they successfully augment or transform their legacy business infrastructure to keep pace? The answer is found in taking in a holistic approach – one that aligns technology to business needs.
The shift to digital goes deeper than adopting new technologies – business transformation is required. As new, often all-digital competitors emerge, business needs to rethink how they can bring their products and services to market faster, aligning their operations, processes and resources to engage with digitally enabled customers that have new expectations, as well as with supply chain and ecosystem partners who increasingly leverage the new information-driven and collaborative approaches that ‘digital’ makes possible.
For each business the pace of digital transformation will be different. It may depend on the maturity of the sector. Manufacturers will, for example, be driven by the digitisation of supply chains, which positively impacts end-to-end effort and maximises returns, but may also demand a radical change to core operations. Consider how massive global same-day launches of top tier mobile devices might impact the operations of a device maker. Other companies, such as those supplying products and services may be driven by other factors, such as the need to serve a certain segment of rapidly digitising customers, by competitors’ digitisation strategies or the opportunity to penetrate new markets.
However, whatever decisions prompt the move to a digitised environment, the final decisions around technologies and how the enterprise adapts its architecture to serve the business need to be driven from the inside out, not outside in.
Make the business case
The nature of the business will also impact digitisation decisions. For example, financial services or government organisations that deal with a lot of sensitive information may not want to adopt a cloud strategy. Security, risk and regulations may influence their decisions. Building a solid business case for the adoption of any new technology is also important.
Evaluation of the business requirement and the existing infrastructure are first steps. The next consideration is: how will digitisation affect business operations and processes? Do these need to be adapted? Is there an opportunity to also use the new technology to improve processes?
For many businesses the changing behaviour of their target customers is the ultimate catalyst. A new generation of customers consume information differently and they want to engage with businesses differently. An older generation of customers want the convenience of digital. For businesses this may mean that everything – from the way they approach the customer to how they engage and transact – must change.
Often, a hybrid infrastructure will continue to serve the business well enough. Some banks, for example, still make use of legacy mainframe systems. The business case to switch to more modern infrastructure is not favoured due the sunk costs and complexity of the legacy systems. On the front end, however, all leading banks have mobile app enables their clients to engage and transact.
Choosing the right technology
Once the business case is clear, the challenge moves to choosing the right technology. If that choice is left to the ICT department, the very best, most stable technology will be selected – it may not be what you need. The primary challenge is aligning the technology with the business.
Business needs an optimal solution, one that will bridge the gap between what the business has in place and where the business wants to go. Similarly, adoption of standards and best practices can only be done in the context of the business.
One client that fell into this trap selected and implemented a leading ERP solution. While the implementation itself was applauded, the solution did nothing for the business. Efficiencies were not achieved, and headcounts actually increased. The reason: processes were simply enabled; the functionality and capabilities of the solution were not leveraged and no automation or efficiencies were built into business processes.
The shift to digital means transformation. It may also mean growth. ICT and the business need to share a common vision and goals – and that means aligning technology to business needs, from software to hardware and the type of resources employed.
Four steps to successful enterprise architecture transformation
A simple four-step check for any digital infrastructure decision is B-DAT!
Business – The move to ‘digital’ must make business sense. Before you look at the technology, look at the risk and implications for business: what happens if we invest (and what does that mean in terms of supporting processes and systems) and what happens if you don’t.
Data – Assess how data is used and managed within the business. Who owns it, where it resides, how it can be leveraged and how it can be secured.
Apps – How will the business and its technology systems be impacted if the business moves to a new platform. What updates will be required and what regulations will need to be met?
Technology – Find the best technology fit for the business and refine the business’ investment strategy. Many businesses no longer simply upgrade or refresh their technology based on three- and four-year cycles – these cycles vary according to technologies and are primarily driven by business need. However, security threats need to be constantly addressed.
In South Africa, it may seem early days yet for businesses in terms of digital transformation compared to more matured global economies, but the reality is that these businesses are aligned with customer and market drivers. As customers increase their adoption of digital services, they drive change. The benefit for local businesses is that they can learn from global transformation efforts – the failures and successes – and potentially even leap ahead, foregoing the learning curve first movers have had to endure.
Enterprise infrastructure is core to business ops
However, making that leap will be reliant on putting in place the enterprise infrastructure required to create a foundation for business operations in a Digital Era. Take cloud technologies as an example: Google has just paid $625 million to acquire California based software company Apigee, a company recognised for its intelligent API platform that helps enterprise services to interact with apps used by its customer and partners. Such services are critical if an enterprise wants to move towards cloud-based solutions. The acquisition will be a big boosts for Google’s cloud aspirations and market share but it also clearly underlines the importance of cloud technology and its role in future.
Companies that understand the broader impact of going digital can leverage the incredible advances such technologies enable. As an enterprise architect I am excited to witness the journey of these companies towards newer technology landscapes. I believe the roadmaps of the most of the successful journeys will, in this Digital Era, be written by enterprise architects.
By Sumit Kumar Sharma, Enterprise Architect at In2IT, an ICT managed service provider