In Part 1 of the Digital Transformation series, I described the importance of proper talent and the commitment from executives and the entire team to the successful digital transformation of the business.
In Part 2 of the 4-part series, I will discuss the importance of technology and the proper clarification of the current business enterprise architecture to a lasting transformation.
Several factors are converging to advance digital transformation: increased pressure to improve the “customer’s experience,” business margins, and the incorporation of new technologies. These pressures have companies rethinking their strategies. As a result, we can expect an increased focus on digital transformation in 2021, with a specific focus on digitizing core processes and systems. Strategies will be focused on building resilient operations, applications, and infrastructure, driving data-driven decision-making and culture, and cybersecurity, says Nisha Krishnan, senior analyst with management consultancy and research firm Everest Group.
The heart of a transformation has something going from one state to a different state. This is true for organic matter, inorganic matter, and technology systems. The goal of a transformation is to be better than the original. The definition of ‘better’ are the benefits gained from of the business’s goals, such as the positive effect on customer satisfaction, revenue increases, operational effectiveness, and the ability to quickly add innovations to the product suite.
Technology is the fuel of a digital transformation
There is an increased urgency on technology to move quickly to solve business problems. The addition of increased budgets, personnel, and incorporation of 3rd party vendor solutions add perceived impetus to the transformation. Adding fuel to a problem without a direction, or more basically, a deep understanding of the current existing systems and processes creates a desire to act quickly but produces a mechanism that solves wrong, or short-term problems, without clear results or long-term gain. In the end, jumping quickly usually means additional costs that could have been avoided.
Transforming enterprise-level applications, systems, architectures, and business processes from existing legacy systems to more modern technology and business processes with an agile customer delivery focus is a significant challenge. These enterprise systems, processes, and teams have been built organically over time and are highly complex. Relying solely on the technology team to unravel and rebuild history is exacting and risky.
Understanding the current enterprise is the foundation to move forward
Breaking down the current enterprise applications is the key foundational step to formulate a go-forward blueprint for long-term sustainable results. Each business is different, whether B2B, B2C, or B2B2C, the existing applications across the company are often complex that could, as an example, include COBOL mainframes, high technical debt systems, data center bound applications, organically grown complex architectures, multiple ERP systems, multiple redundant vendors, duplicated operation structures, merged businesses, etc.
Uncovering and honestly understanding the current Business and Technology state of the company is critical to determining the roadmap(s) to move forward with solutions that fit with the business goals. Outlined below are examples of basic questions by domain that are important to answer and which will shape your designs and plans.
Business Logic:
Where does the business logic reside within the applications?
Is the business operational logic primarily resident in the user interface layer, middleware, or within the backend services?
Is the business logic spread across multiple systems with a complex, and brittle interconnectivity?
Are these connections well understood?
How are regulations, compliance, and privacy satisfied?
When these requirements change what is the effort involved and how are they verified?
Customer Interactions:
How do customers interact with the business?
Are Web and Mobile solutions providing consistent information from the same sources? Is the user interface technology congruent, supported, and future-proofed?
If there are API interfaces, is the information consistent with the information provided by other methods?
Data:
What critical business data is used across the enterprise?
How is the critical business data stored and what system(s) are used to store, access, and modify?
Is there duplication of data in multiple stores?
How does the business logic access the data?
Are all inputs well known?
Is the data leaving the business well understood?
Other Domains which need to be reviewed and addressed:
Business Processes
Content Creation and Management
ERP systems and processes
Silos of information
Redundant development
Security of access, authentication, and authorization
In many cases, the development teams have become siloed across the enterprise. They take in several technology requests from the business partners, but are just performing build and implementation services. Redundancies occur, technical debt increases, and innovation becomes segregated across these silos, hindering the utilization of the holistic benefits created by one across the remaining teams.
Part of the digital transformation of the Technology Organization is to break the silos of development and to change the technology teams from being order-takers to becoming full partners in the transformation agenda. Sharing of technology solutions across the company should be ingrained as a positive, instead of deeply segregated ownership within a silo.
By honestly understanding the current state of the applications, enterprise architecture, data, business logic, and customer interactions, the complexity of the decisions of what to upgrade, sunset, and transition becomes clearer. Aligning the key business and technology risks orients the decisions to the strategic business goals.
Migration or Big Bang move to cloud services?
Typically, a technology transformation involves moving applications and services to “the cloud.” The move to cloud services can be performed by utilizing many strategies, including increasing compute performance, increasing data capacity and utilization, accessing newer technologies, add new SaaS services, decreasing costs of data center ownership, or adding application resilience just to name a very few solution benefits. The decision to move to the cloud needs to fit the enterprise need, security/privacy considerations, and operational capacity. Each cloud solution has advantages but requires addressing questions about the current state to determine the best paths forward.
Moving the enterprise to a public cloud implementation on one of the cloud providers provides proven solutions to dynamically increase compute capacity, data storage expansion, ERP consolidation, access to business additive services (e.g., IoT, AI/ML, flexible workflows), operational efficiency and business resilience but requires a clear understanding of the transition from existing systems, the technical talent to operationalize, clarity on business security, and long-term costs.
Utilizing the existing on-premise data center assets to create a private cloud (e.g., using Cloudera) takes advantage of the existing well-known secure environment under enterprise control, but requires a mechanism to perform the migration on data center servers while the business is still running, the talent to incorporate and maintain private cloud services, and the costs of keeping, or expanding, existing data centers.
An alternate is to implement a hybrid solution integrating existing applications within the data centers with new public cloud services to provide 1) the ability to keep business-critical information under secure enterprise network control, and 2) a migration path from existing applications within the data centers to long-term public cloud services. Integrating the existing enterprise applications into a cloud solution can power the transformation while retaining the best of the enterprise.
“As businesses try to accelerate their digital transformations, enterprise IT will continue moving applications to the public cloud,” Nutanix CTO Rajiv Mirani says. “But the costs of refactoring and rewriting applications will be larger than many enterprises anticipated. Enterprises will look to technologies that enable phased approaches, rather than big-bang style projects.”
Transformations require technology teams to be bold
One of the key culprits to derailing a transformation is the obsession with the big bang change and a failure to align the changes to the long-term business strategy, disregarding scalability and placing security as a secondary problem along with the pressure to accomplish goals quickly. A digital transformation is a business transformation, not a siloed technology only process, but the burden is placed on the technology teams to execute.
The business and market will create an increased pressure to show quick results. This pressure can set the wrong expectations on the technology teams to perform short-sighted solutions, that need to be unwound over time, increasing longer-term costs, and adding technical debt that was intended to be removed in the first place.
Transitioning existing applications to incorporate new services, add features and consolidate of business logic can be attacked as components within the roadmap of a transformation. A sample list of actions that can be implemented as a series of continuous deployments within a transformational roadmap are:
Adding API’s into existing applications for increased connectivity options,
hardening intra-application communications,
defining User Interface frameworks for consistent customer experiences and faster development of new user interactions,
removal of redundant business logic,
encapsulating business functions into containers for reuse and flexible deployment,
moving critical user interaction business functions into backend services for greater flexibility of control and privacy/regulation compliance
As stated in the CIO.com article 10 reasons digital transformations fail, by Clint Boulton, the technology trap of misapplying a tool, picking a favorite solution or using a shiny new toy can cause a misalignment of the solution with the customer need and business goal.
The pressure to move quickly
Too often, multiple initiatives are executed simultaneously without accounting for the critical dependencies within the enterprise and applications. Simply executing all modifications at the same time creates a tangled series of projects that quickly lose sight of the objectives, key results, and customer-focused goals into an inward-looking technology solution.
Trying to change everything at once without clearly, and honestly, understanding the existing systems, applications, interactions, architecture, data flow, people and operations creates too many initiatives in progress to manage and align to the overall business. Performing a pragmatic iterative dependency identified approach defining a roadmap of change, the purpose of the change, and the expected results empower a clear alignment of the objective of each decision to the key results.
In Part 3 of the series, I will discuss the importance of collecting, identifying, and using Data in a business transformation to advance clarity of internal and external interactions and advance customer-focused innovation.
About the Author
Gregg Fenton is an Executive Director focused on solution capabilities across HP Marin’s Data, Digital Transformation and Legacy Solution domains. Gregg is a Technology and Digital Transformation Leader with over 35 years’ experience in leadership and executive positions across multiple industries at companies such as JP Morgan Chase, Honeywell, Bloomberg, the New York Times, Ericsson, Sperry/Loral, and a startup Whitewater Mobile. Gregg is a thought Leader in the areas of digital transformation, data, analytic solutions, and product development. Gregg holds seven patents across mobile and multimedia messaging and is a member if the IEEE.