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Digital Architect’s role in leading Enterprise Digital Transformation

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Digital Architect’s role in leading Enterprise Digital Transformation

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  • Very useful stuff - it brings together many different perspectives on customer journeys and coherently presents the digital impact of a well thought through effort. Great stuff!
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Digital Architect’s role in leading Enterprise Digital Transformation

  1. 1. Digital Architect’s role in leading Enterprise Digital Transformation Punit Sahni Feb 2016
  2. 2. 2 impact of digital business imperatives on architect competency 3 impact of digital technology imperatives on architect competency 1 digital imperatives present leadership opportunities for digital architect 4 get started with a framework for transformation
  3. 3. we are in the age of digital transformation DIGITAL TRANSFORMATION IS CHARTING OUT A “MUST-HAVE” DIGITAL PORTFOLIO FOR BUSINESSES Digital transformation is the realignment of business models, processes, and technology to engage customers The concept is everywhere, mainly because all companies need to innovate and transform their business model to stay in the competition in a rapidly changing world, fostered by fast-changing technologies Today, digital technologies have evolved from SMAC stack to include the Internet of Things, 3D printing, robotics, and artificial intelligence Finding ways to react to and shape digital transformation is on the agenda of every member of the C suite 3 • Digitally enabled field-force • Multi-channel integration • Digital marketing • Digital commerce • Digital service • Digital HR • Connected workforce • Digital native business models • Digital enhanced businesses • Digital R&D Digital Products and Services Digital Customer Experience Digital Operations Digital Workforce Emerging Digital Portfolio
  4. 4. digital transformation is shaping future businesses DIGITAL THEMES ARE TRANSFORMING BUSINESSES ACROSS VARIOUS SECTORS Digitization is no longer just an add-on feature to existing channels or products and services. Instead, many aspects of the customer experience are digital by default, as should be the processes that underpin it The most obvious industries disrupted by digital are music, retailing, media, and travel, but similar patterns are occurring in more traditional industries such as banking, agriculture, energy, health care, industrial goods, and manufacturing For any industry, speed is of the essence. Accelerating digital transformation must be a key priority for any company hoping to compete in the future 4
  5. 5. my point of view INTERCONNECTED IMPERATIVES IN BUSINESS AND TECHNOLOGY ARE PRESENTING LEADERSHIP OPPORTUNITIES FOR DIGITAL ARCHITECT The digital economy is about business strategy supported by the right digital tools and effective technology with the customer at the center Digital Transformation needs an interplay of sound digital business strategy, effective technology tools and digitally enabled processes Strategy, Design and Technology skills of Architects place them at the center of digital transformation Architects should grab this opportunity and help their companies succeed in the digital economy, growing customers, markets, and products 5
  6. 6. 2 impact of digital business imperatives on architect competency 3 impact of digital technology imperatives on architect competency 1 digital imperatives present leadership opportunities for digital architect 4 get started with a framework for transformation
  7. 7. business imperatives DIGITAL TECHNOLGIES ARE DISRUPTING ESTABLISHED BUSINESS MODELS AND ENABLING NEW BUSINESS MODELS The scope for digital is broad – it falls simultaneously within the domain of the: • CEO (growth), • CSO (which markets or segments to pursue), • COO (lowering costs, transitioning manual activities to digital channels or optimizing supply chains) and • CMO (a transformed customer and channel experience) New digital technology is the engine behind radically reinvented and new business models 7 REINVENTING INDUSTRIES involves substantial reshaping of an industry structure, as UBER did for the taxi market, AIRBNB for lodging, and iTunes and SPOTIFY for music. SUBSTITUTING PRODUCTS OR SERVICES directly replaces core products or services with a new digital format. Look at NETFLIX for how it’s done, or at POST DANMARK. CREATING NEW DIGITAL BUSINESSES involves the creation of new products and services that generate additional revenues. The Internet Of Things brings lots of inspiration here and brands like NIKE, and NEW BALANCE lead the way. RECONFIGURING VALUE DELIVERY MODELS means recombining products, services, and data to change the way an enterprise plays in the value chain. It may often involve cutting out the middle man — clearly demonstrated in INSURANCE, RETAIL and TRAVEL . Archetypes of digital business model reinvention as described in Leading Digital (book by Didier Bonnet)
  8. 8. impact of business imperatives on architect competency THE DIGITAL AGE REQUIRES A RETHINK ABOUT TRADITIONAL STRATEGY FORMULATION IN DISCOVERING OPPORTUNITIES Today, technology creates new opportunities and fundamentally changes businesses……and transforms the business and operating models of almost every company in every industry Digital Architect addresses the issues, decisions, actions and investments required in creating a digital business covering both business and operating models 8 Digital Architect combines digital activity with strong leadership to turn technology into transformation in following nine categories Transforming Customer Experience Customer understanding Top-line growth Customer touch points Transforming Operational Processes Process digitization Worker enablement Performance management Transforming Business Models Digital modified business New digital businesses Digital globalization Adapted from Sloan MIT Review
  9. 9. architect’s call to action in response to business imperatives IDEATE, INNOVATE AND FORMULATE VALUE PROPOSITIONS FOR INVESTMENTS IN DIGITAL TECHNOLOGIES Expand your circle of influence to multiple stakeholders for:  “Finding growth and value in new and adjacent businesses”  “Defining how to reach, connect and engage with customers or audiences”  ”Leveraging technology transforming the efficiency of operations” 9 Make it happen. Discover the essential understanding, practical tools and techniques to transform and grow your business in the digital age •Rapidly work out product / market fit •Prototype and create minimum viable products (MVPs) •Value propositions and business cases for investments IDEATE AND INNOVATE CONTINUOUSLY TO KEEP UP WITH CUSTOMERS AND MARKET •Replace your inside-out viewpoint . . . with an outside-in, customer value perspective •Employ Design Thinking for Customer Experience and Service Design •Leverage rapid techniques to understand customers such as personas and journey mapping •Identify new ways to reach, acquire and retain customers through digital means DEFINE A CUSTOMER-CENTRIC STRATEGY FOR YOUR ORGANIZATIONAL CONTEXT •Benchmark against best practices and create flight plans EMPLOY CAPABILITIES BASED STRATEGY TO OUTPERFORM COMPETITORS
  10. 10. illustrative opportunities of digital transformation DIGITAL TRANSFORMATION IN THE AUTOMOTIVE AND FINANCIAL SERVICES SECTOR 10 Digital transformation in the automotive sector Automotive sector is at the cusp of a digital revolution, driven by trends such as the rapidly changing consumer behavior, an increasing need for greater fuel economy, new opportunities presented by connectivity and the emergence of new growth markets. In order to remain competitive and proactively address these trends, automotive players need to embrace innovation. Digital transformation is playing a key role in taking automotive industry into the future Digital transformation in the financial services sector Changing customer expectations, combined with increasing competitive pressures, challenging macroeconomic conditions and a stringent regulatory environment, are forcing financial services (FS) companies to re-think and review current processes. Digital transformation is definitely a huge opportunity for the FS sector. Such technologies will not just redefine and maximize customer experience, but will also restructure players’ internal process Source: EY - Imagining the Digital future (2015)
  11. 11. illustrative examples of digital transformation initiatives COMPANIES IN A RANGE OF INDUSTRIES HAVE COMMITTED THEMSELVES TO A POLICY OF QUICK ACTION AND EXPERIMENTATION, LAUNCHING SMALL-SCALE INITIATIVES AND THEN BUILDING UP THEIR DIGITAL CAPABILITIES THROUGH EXPERIENCE An Insurer Creates a Joint Venture to Enter a Challenging Market A global insurer wanted to enter a fast-growing Asian market, but several initial efforts had failed. The company then developed a joint venture that would enter the market through a “Trojan horse”—a noninsurance product marketed under a new brand name. Aware that a potential new demographic for insurance was pregnant women and new mothers, the company developed a digital device that pregnant women could wear to monitor the heartbeat of the fetus. The joint venture was staffed with a combination of employees at the insurance company and new hires who provided the needed digital capabilities, and it rolled out the product using quick, iterative cycles and customer feedback on prototypes. In addition, the company created a website where women could monitor heartbeat data and exchange information with other expectant mothers. (Family members could also log on.) The site included original content from medical experts, and it was open to participation by other companies offering wearable technology. This approach allowed the insurer to establish a foothold in the market, which it then used to cross-sell its insurance products. Critically, the joint venture was completely separate from the parent company, with different governance, financials, and technology. This allowed it to move fast and operate like a start-up, free from any institutional inertia on the part of the parent company. A Telecom Company Evolves from Network Provider to Digital Service Provider A telecom company that dominated its home market recognized the risks of commodification early. It knew that focusing on voice and data networks put it in danger of becoming a mere conduit for information, while digital start-ups built innovative mobile services that customers would access (and pay for) through its wireless network. To capture some of this emerging revenue in digital, the company began to leverage its wireless network to offer new services. For example, the company developed a mobile payment service, a streaming- movie offering, and health care apps. A consistent theme across all these new services was that they served as platforms that other mobile developers could build on; that is, rather than building walled-off, proprietary services, the telecom developed an ecosystem that others could use to create even richer offerings. Yet the telecom retained control of the customer relationship, along with payment and authentication services. As a result, it had immediate access to customer data, which it could use to refine and improve its offerings. Ultimately, the company revamped its IT platform to support the new service- based approach, and revenue from services grew dramatically. 11 Source – BCG (How to Jump-Start a Digital Transformation)
  12. 12. 2 impact of digital business imperatives on architect competency 3 impact of digital technology imperatives on architect competency 1 digital imperatives present leadership opportunities for digital architect 4 get started with a framework for transformation
  13. 13. digital technology imperatives A VASTLY MORE COMPLEX ECOSYSTEM IN THE CONTEXT OF DIGITAL BUSINESS AND TECHNOLOGY OBJECTIVES Waterfall is giving way to agile The user experience rules, requiring scale, and device diversity Business leaders want to know  When should I use what?  How will I protect my business?  How can I expand my markets? Technology is shifting 13 From Pipes Transactions Build Data as a liability B2B - B2C To Platforms Interactions Re-use Data as an asset B2I As business technology professionals, we’re exploring a whole new, powerful range of tools, platforms, and technologies to build the next generation of solutions
  14. 14. impact of digital technology imperatives on architect competency DIGITAL ARCHITECT NEEDS TO KEEP EMBRACING THE NEXT WAVE OF TECHNOLOGIES CONSTANTLY • Modern technology is so pervasive that nowadays everybody enjoys mobility, reaches into the clouds, behaves socially, and can even spell analytics. But familiarity doesn’t mean understanding. • Digital Architect promotes the understanding of current technologies, and to make it easier to grasp their business potential • Digital Architect has a deep understanding of how technologies drive the creation of a superior customer experience, the optimization of operations and even the reinvention of entire business models • Digital Architect is adept at emerging architecture and programming styles that enable simpler, adaptive, intelligent, secure and customer-centric solutions. 14 Digital Architects needs to architect and develop digital solutions required for their industry by leveraging products and platforms in six clusters Providing organizational access to the outside connected world Creating compelling, individualized user experiences Collaborate to tap into the power of social Crucial IT capabilities to deal with continual digital change to Leverage data and analytics Manage adaptive processes Foundational building blocks of any IT landscape Invisible infrastructure Simplify and standardize core applications
  15. 15. architect’s call to action in response to technology imperatives IDEATE, INCUBATE AND INDUSTRIALIZE ARCHITECTURES FOR EMERGING PROGRAMMING STYLES THAT ENABLE SIMPLER, ADAPTIVE, INTELLIGENT, SECURE AND CUSTOMER-CENTRIC SOLUTIONS Digital Platforms and Ecosystems Digital Marketing Digital Customer Experience Digital Content Management Digital Commerce Digital Connected Devices Digital Corporate Functions Digital Manufacturing and Operations Digital first architectures Dynamic hybrid cloud architecture Reactive architecture Lambda architecture Micro-services integration architecture Reimagining customer experience Tablet and mobile apps Responsive websites Wearables apps Omni-channel experiences Emerging technology experiences Reengineering operations Big data visualization Data lake for modern data warehouse Industrial internet of things Operational process digitization Predictive, Real- time analytics Demand and revenue forecast Next best offer Risk management Real time credit decision Customer churn management Claims fraud detection 15 A representative “Digital Age Architectures and Applications Portfolio”
  16. 16. illustrative examples of cloud native architectures for digital age ARCHITECTURE BLUEPRINTS BY MICROSOFT - SCENARIO-BASED DIAGRAMS TO BUILD NEW SOLUTIONS FAST 16 Source – Microsoft MSDN - https://msdn.microsoft.com/dn630664
  17. 17. illustrative examples of digital transformation initiatives COMPANIES IN A RANGE OF INDUSTRIES HAVE COMMITTED THEMSELVES TO A POLICY OF QUICK ACTION AND EXPERIMENTATION, LAUNCHING SMALL-SCALE INITIATIVES AND THEN BUILDING UP THEIR DIGITAL CAPABILITIES THROUGH EXPERIENCE A Retail Player Quickly Rolls Out a Mobile App A multinational big-box retailer operating in an emerging market launched a quick-win initiative with a mobile app to boost declining sales at its physical stores. Rather than develop a grand digital strategy or conduct detailed market research to determine the scope of the opportunity, the retailer outsourced the entire app-development process so it could get something to market quickly. The app included customer-friendly features like personalized coupons and offers, tools to plan shopping trips, automatic replenishment of regular purchases (though a subscription model), and in-store navigation. It resonated strongly with customers and led to increased sales at the retailer’s stores, especially once management learned what worked well and continued to add new features, such as in-store WiFi and home delivery of goods purchased online. The overall initiative was so successful that the retailer extended the outsourcing arrangement for a second year, meanwhile hiring digital talent and building up its own internal capabilities in critical areas, such as customer analytics, mobile payment processing, app development, and coding. Eventually, it rebuilt the main app using internal resources and continued to refine and improve it over time. By outsourcing much of the process initially, the company was able to get an app in consumers’ hands quickly, build its digital capabilities over time, and learn from direct experience. An Auto Manufacturer Uses a Two-Speed IT Structure to Support a Digital Initiative A multinational automobile company wanted to use digital technology to improve its sales cycle. The management team studied the car-buying process and identified several “moments of truth” when customers were turning away rather than continuing to engage. Market research indicated that the company could improve sales by reaching out to customers through digital channels at those junctures, with more targeted marketing messages, vehicle specifications, and other information intended to win customers over. An early-stage, four-month test based on external technology was successful, but the company realized it didn’t have the right internal IT structure in place to roll out the new communication model. It therefore split its IT function in two: one section would support the company’s existing operations using traditional legacy systems, while another would move faster to develop cloud-based mobile technology and other digital tools that could support the new initiative. With the two-speed IT structure in place, the automaker would be able to roll out the new communication model across the entire company. 17 Source – BCG (How to Jump-Start a Digital Transformation)
  18. 18. 2 impact of digital business imperatives on architect competency 3 impact of digital technology imperatives on architect competency 1 digital imperatives present leadership opportunities for digital architect 4 get started with a framework for transformation
  19. 19. develop an architecture thinking frame spanning strategy to execution DIGITAL ARCHITECTS HAVE THE OPPORTUNITY TO BE AT THE CENTER OF DIGITAL TRANSFORMATION Business people have become fans of modern technology. They now see it through the smiling faces of their smart phones, tablets and smart ‘things’. IT people share this passion, and appreciate how technology changes business. Architects can take a leadership role in fusing digital capabilities and business change by  Adopting new preferences for creating solutions (e.g. Capabilities over Requirements, Value Scenarios over Use Cases, Working Prototypes over Specifications)  Drawing one architecture only — the enterprise architecture depicts, in a single blueprint, the flows of business, their technology embodiments, and the envisioned changes  Delivering regularly, but never end their development; because, as a part of the world of networks, the enterprise needs to constantly adapt and connect and readapt and reconnect. 19 Digital Architect’s Thinking Frame VISION BLUEPRINTING Business stakeholders Business and IT stakeholders ROADMAPPING Motivation Model Business model Market model Capability model Service Model Journey Maps People Process Data Technology Roadmap Governance GOVERNANCE Strategy Execution Execution Design Thinking (Empathize, Define, Ideate, Prototype, Test)
  20. 20. develop a collection of proven frameworks to assist in the transformation journey A SMALL COLLECTION OF INDUSTRY STANDARD TOOLS AND FRAMEWORKS 20 Developing a strategy provides answers to the essential questions (source: Adapted from Hammer 1988, 59-60) The Digital Capability Framework (DCF) © 2012 SAP AG Business Model Canvas: nine business model building blocks, Osterwalder, Pigneur & al. 2010
  21. 21. recommended readings 21
  22. 22. recommended readings 22 RESEARCH AND VIEWPOINTS BOOKS ON DIGITAL TRANSFORMATION DIGITAL TRANSFORMATION EXAMPLES FROM MULTIPLE INDUSTRY
  23. 23. thank you Punit Sahni www.linkedin.com/in/punitsahni 23

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