Updated: Jan 12
Digital Transformation refers to creating business models and value creation in the digital economy by leveraging business process change and process automation using digital technologies. There are inherent challenges in converting existing business models into digital opportunities. Also, a severe limitation is being faced in reusing existing IT assets along with digital technology stack.
In 2019, as well as the in the coming decade, modern information and communication technology combined with industrial production would redefine the Enterprise landscape completely. Are you ready?
Of course, it's not about a blind call on future. However, a CEO must evaluate the current standing regarding service offerings and how does Enterprise want to reinvent in the digital world.
One of the critical question in digital transformation is how much and when to start shifting the old models and structures to the new. I guess Socrates had a pearl of great wisdom to all when he said THE SECRET TO CHANGE IS TO FOCUS ALL YOUR ENERGY NOT ON FIGHTING THE OLD, BUT ON BUILDING THE NEW.
It's advisable that the senior executives must focus and prioritize the main trigger for their digital journey. Such triggers (transformation strategy) could be broadly classified into three categories.:
New Business Model (e.g. new product, new service offerings, new revenue opportunities, product transformation)
Customer Experience (e.g. purchasing process, service availability)
Operational efficiency (e.g. process optimization, capital use, supply chain, employee integration)
Digital Technologies (infrastructure) such as IoT, Big data, Wearable computing, Cloud computing, Social media, E-Commerce, Robots, Drones, Mobile Apps are key to the smart factory, automation, infotainment, remote maintenance, digital products etc.
The architecture of the Digital Enterprise must answer some of the key questions such as
1. Growth Model, customer needs and value chain
2. Define business strategies, new business models and new value flows
3. Prioritize function unit/s (department) i.e. are you considering digital transformation to touch Sales, Marketing, Engineering, Manufacturing, Logistics, Customer support, etc
4. Identification of new processes,
5. Processes that need digitation/automation
6. Identifying products, machines and other objects that need to be intelligent
7. Selection and prioritization of components of Digital infrastructure
8. How to adapt and integrate digital technologies into an existing IT and technology infrastructure
9. Logic and information-driven decision making
10. How does solutions fit in the context of Enterprise and not just targeted at project in hand
11. Simulation, Impact analysis
12. Strategy for complexity management
13. Plan for change management
14. Key stakeholders, cultural change plan, training and a timeline
15. Chief Digital Architect (the owner)
In digital transformation journey (not a project), sometime we might find issues related to corporate culture, strategy execution problems, the ineffective collaboration between departments and teams, lack of value flow etc as some of the key irritants. But, let us forewarn you that these are just aberration and can be handled with few iterations. But, the real problem is if you start a digital transformation project without digital architecture. This is a definite recipe for disaster.
How you manage CHANGE is the key to be successful in the digital economy. Changes are happening more and more quickly. Every few years, innovations become obsolete and are replaced by new innovations. So, it's not good enough to be an early mover with digital transformation initiatives. If a company cannot keep up, it will no longer exist. This is where most digital transformation initiatives will fail. They lack architêcture. Often projects overlook principles of enterprise engineering as the managers and leaders lack these skills.
Digital Architecture is key to Digital Transformation. Of course, Digital Architecture is not a random set of models drawn for just a few stakeholders. Understanding of Enterprise Anatomy is the key to create Digital Architecture.
Imagine a person attempting a surgery without understanding Human Anatomy. Similarly, your digital transformation initiatives can be seriously compromised if you don't understand Enterprise Anatomy.
Most enterprises (large or small) are created not by design, but they just happened. Also, that's why they need to be re-architected to sustain the pace of growth or excellence. We strongly feel that Digital Economy is one such opportunity for Enterprises to re-architect themselves to be relevant.
The idea of Digital Enterprise is no more a daydream. A bad start would make the journey resentful, but a great start would make the journey happier.