The extensive industry activity and commotion about digital transformation — mobile, internet of things (IoT), machine learning (ML), cloud, APIs, microservices, and on and on — is all well and good, but while everyone is happily going along with the next new and way-cool digital thing, most are making a big mistake. Digital is great — and necessary — but there’s a more foundational concern and a more fundamental long-term enterprise success factor. It is less about what an enterprise does with digital and more about how it does it.
An enterprise may have wonderful success stories, such as:
- Applying machine learning to improve insights.
- Using robotic process automation (RPA) to reduce errors, speed up processes, and make customers happier.
- Building API-based digital ecosystems and platform business models.
- Using the internet of things to bridge the gap between physical and digital worlds.
These are all great things to do, and an enterprise must execute them well, yet these are easily done as point solutions with no common model across them. As such, they will build “digital legacy” — the next generation of legacy that will slow down business change, just as people complain that older technologies have done. What makes it worse is that many organizations will not realize that they are building point solutions and silos because they may give APIs, microservices, containers, and the like far too much credit for saving them from silos than these technologies deserve.
Certainly, enterprises must push forward on digital transformation, building to the solution points and doing so quickly, but the more fundamental way to view digital transformation is as a fundamental shift in business strategy. Some may aim for faster change with shorter planning cycles, but the more fundamental point is that, in the world ahead, business strategy must be founded on the notion that the future is virtually unpredictable. This means that, far beyond an organization’s ability to deliver the next thing with agility and speed, strategic success will go to the firms that are fastest and most agile over an unending stream of rapid and unpredictable changes in business and technology — incremental, discontinuous, evolutionary, and disruptive changes.
Thus, strategic value and differentiation moves beyond (and encompasses) the ability to quickly implement today’s point digital trends to the ability to design a digital business (i.e., a single integrated design of all things human, physical, digital, and financial) for constant change and continuous, rapid reconfiguration for new processes, experiences, and business models. Alongside and underpinning the point solutions, one’s digital strategy must frame investments specifically in digital business agility and the platforms and architectures for it. This requires shifts, such as:
- From crafting business requirements (even with “Agile” methods) — to designing a digital business (i.e., integrated design of all things human, physical, and digital).
- From implementing and integrating solutions — to building and running slices of a digital business.
- From Agile-centric methods — to Agile-plus-architecture (i.e., mixing architecture governance into Agile delivery).
- From tech-centric solution architectures (e.g., framed around APIs, microservices, RPA, AI, IoT, etc.) — to business-centric solution architectures (e.g., framed around transactions, processes, insights, user roles, business policies, et al).
- From architectures centered on technical building blocks — to architectures centered on business building blocks.
In other words, historically we designed how business should work, then framed requirements for building the technology to support it. Over the long haul, this doesn’t work for digital business — you’ll just build a new generation of legacy. Digital business requires a unified top-to-bottom design model that goes from strategy to infrastructure. It’s not about abandoning Agile and building architecting solutions from the top down; it’s about having digital business models as templates for building in an Agile way.
There must be a concrete strategy, visible at a board-of-directors level, for investing in business agility, and this strategy must be infused into (virtually) every point digital solution. It’s more than scaled Agile. It’s more than digital-first. It’s more than blockchain or ML or the next buzzword, done fast. It’s more than delivering quickly; it’s about delivering quickly with the business-technology structures that enable delivering the next change even more quickly off the back of prior changes (i.e., without always rebuilding the prior stuff).
The huge mistake is to think of digital transformation as a once-and-done thing. We see some getting past that, but it is still a very big mistake to simply build digital legacy by focusing on the next digital innovation without an underlying business-centered solution architecture and strategy for the ongoing, unpredictable change faced in the world of digital business.