If you’re interested in digital transformation, you should be thinking about enterprise architecture. Don’t let the word “enterprise” deter you if you work for a smaller organization. Adopting an enterprise point of view is helpful for any size company and may even be necessary for achieving digital transformation.
What constitutes an enterprise point of view? An enterprise point of view recognizes that:
- Business depends on IT capabilities and, increasingly, IT guidance
- IT investments can either hobble or empower business initiatives
- Enterprise architectures affect both internal users, such as employees, and external users, such as partners and customers
- Digital transformation involves developing enterprise architectures along two axes: customer experience and operational efficiency (more on this later)
In this post, I’m going to talk about digital transformation, past and present, and the steps an organization — whether a mid-sized business, a large enterprise or a multi-national conglomerate — can pursue to successfully transform itself.
IT Transformation, 1990s Style
Back in 1998, I was working as an IBM consultant on a major IT project for a well known Fortune 500 food company based in Pennsylvania. The project was called “E21,” because our goal was to build a 21st century enterprise.
It was a monumental effort that involved implementing SAP, Siebel and Manugistics along with a brand new EDI subsystem and IBM middleware. The project was so big, it involved 100 of the client's employees along with 100 consultants like myself from IBM.
Back in those days, IT modernization and Y2K were the drivers. This company wanted to move away from its mainframe IT architecture and automate manual processes. It also wanted to eliminate the need for more rows of filing cabinets in the accounts payable department.
To replicate data as the project required, we created hundreds of mostly point-to-point integrations between best-of-breed applications.
The Times, They Are a Changin'
The requirements for digital transformation have changed dramatically. When we were working on the E21 project, data warehouses were still a new — even a futuristic — idea. Only executives could check email on the road; that’s why the company provisioned BlackBerrys for them.
After implementing any new applications or systems, users had to take part in week-long training sessions. Training was par for the course — no one was designing user interfaces that would require little or no documentation. And of course, no one was thinking about artificial intelligence (AI) or the Internet of Things (IoT) or blockchain or vast numbers of mobile users.
Today’s digital transformation requires data to be presented on any device at any time from any location. It requires us to create applications that anyone can pick up and use with ease the same way they download any app onto their phone. When was the last time any of you picked up a user manual?
User experiences must be self-explanatory, supporting self-service for users both inside and outside of the organization. The data to support these experiences must be delivered reliably, managed through a rigorous program of data governance.
The digital transformation we need today requires us to create systems that fully integrate any channel, creating seamless end-to-end transactions from any device, while providing accurate, up-to-date views of data no matter what application that data resides in. And this type of transformation cannot happen without applying enterprise-level architectural thinking.
To lead digital transformation, CIOs need data governance and agile development. Find out why in this blog post from leading IT strategy author Isaac Sacolick.
Adopting an Enterprise Architect’s Mindset
Even twenty years ago, my IBM client company recognized the importance of having a unified enterprise-level integration architecture. But there are still companies today that aren't there yet.
Many companies are still patching old systems on an as-needed basis with whatever tools are available. Some take this approach due to a lack of funding while others maintain the status quo from inertia or a lack of focus. This not only reduces efficiency and stifles innovation, but over time, it also becomes more expensive than undertaking extensive modernization efforts.
Enterprise architecture matters. When data silos persist, they become too difficult or expensive to access for digital transformation. Data remains fragmented and inconsistent across the enterprise.
Without data integration and data governance, operations remain slow, manual and piecemeal. Automation is deferred. Expenses remain high, while competitors streamline operations, realize efficiencies, and, most importantly, set a foundation for moving faster.
Not all of today’s successful companies will be successful in the long run. Falling short at digital transformation, many will end up among the 40% of Fortune 500 companies expected to fail by 2025.
Today’s digital transformation takes a different approach than the IT modernization projects we embarked on twenty years ago. Then, we hand-coded hundreds of point-to-point connections.
Today, we can use low-code platforms like Dell Boomi to rapidly build integrations and data transformations. And we can use standard connectors for our biggest applications and centralize integration through a hub, creating a more stable, flexible and scalable architecture, rather than relying on all those point-to-point connections that had to be individually maintained.
Does your organization still have paper-based processes that require manual data entry? You may need a low-code app development platform. Read our eBook to learn the five ways low-code development could be right for you.
A Closer Look at Future-Ready Enterprises
Enterprise thinking means not only considering today’s needs and available technologies but also the strategies and technologies the organization should pursue in the future.
When scholars at the MIT Sloan School of Management conducted an in-depth study of the IT strengths and weaknesses of enterprises in multiple markets, they concluded that future-readiness was the key criterion of digital transformation.
How future-ready is your enterprise? To judge, you may find the diagram below helpful. It’s a quadrant chart that MIT Sloan put together as a result of their study.
In the lower left, we have organizations with old, manual processes and little optimization of customer experience. As you can see, 51 percent of enterprises can be found in this quadrant. It’s a popular quadrant but not a prosperous one: these enterprises under performed in their markets, generating 5 percent less net income than the industry average.
The vertical axis on this chart measures progress in improving customer experience, which is typically tracked through Net Promoter Scores. Companies that improved only along this axis were able to deliver a more integrated experience to customers.
These companies invested in mobile apps and other customer-facing technologies. Behind the scenes, though, IT was still piecemeal. Processes remained manual and laborious. Data governance was spotty. And as a result, earning lagged. Companies in this quadrant report net income that is 3.6 percent below the industry average, scarcely better than those in the lower left quadrant.
The horizontal axis measures operational efficiency. Enterprises that made progress along this axis while ignoring customer experiences fared somewhat better. They integrated applications and services; created plug-and-play products and services; and implemented data governance so that data could be shared with stakeholders both inside and outside of the organization. Their earnings exceeded the industry average by 4.6 percent.
What Defines a Winner
The real winners are those future-ready companies that optimize along both axes at once, creating innovative products and services that are also cost-effective. They provide great customer service that is supported by modular, agile IT, with operations that are integrated, automated and efficient. These companies make the most of their data.
Being an integrated, automated future-ready company pays off: these companies outperform the industry average by a whopping 16 percent.
The lesson here? Organizations of all sizes need to invest in enterprise-scale thinking. And to become prosperous, future-ready and digitally transformed, they need to invest in multiple areas, including integration, workflow automation and customer experience.
- Workflow automation
- Customer experience
It takes investment in all these areas, making progress along both axes in the MIT Sloan chart, to create a winner in any marketplace. And Boomi's unified platform has everything that you need to get started.
The Boomi integration platform provides a foundation for organizations around the globe to drive digital transformation. With Boomi, organizations can streamline and automate workflows to empower employees, deepen collaboration and provide superior customer experiences — which is what being future-ready is all about.
Want help assessing your organization’s future-readiness? Contact our integration experts today.
About the AuthorFollow on Linkedin More Content by Csaba Lorinczy