Key ingredients of Digital Business

When you have understood the importance of getting started with digitalization, but you’re still not entirely confident on which way to turn next? Or you have already initiated the first steps towards digital business, and would like confirmation that you are moving in the right direction? In this post I will share some pointers based on what I have experienced to be the key ingredients and success factors to achieving the benefits of digital business.

Management ownership of the target state; Digital Business

First you need to define the target state, so that this can be communicated within your enterprise. At this point it does not need to be very detailed, but it should contain some intuitive truths and a general direction. Based on this the ownership must be firmly established within the management group of your organization, preferably with the CEO directly or even the board of directors. A successful digital transformation of a company is not an IT project, it is an enterprise endeavor, and as such needs to be properly anchored and driven by management.

Enterprise Architecture

Next you begin detailing the target state at enterprise level. This is typically the work of an enterprise architect in cooperation with business and IT management. The enterprise architects’ role is both in designing the target state, proposing the strategy, defining the roadmap and applying the governance on behalf of the resulting program or project portfolio. Once you have a defined target state, that is properly anchored with executive management, you also need a vision that motivates colleagues to get onboard. Something that hits home with key stakeholders, and drives engagement – this holds true for all large initiatives in an enterprise.

GAP Analysis

As part of this process you also need to document your baseline, what is your starting point, your AS-IS that all digital initiatives and project results can be measured towards. The GAP between your baseline and the target state will be your roadmap for the program or project portfolio, and what the business cases are built on. Separate GAP analysis can be performed for each of the following key capability domains, in addition to enterprise architecture which brings it all together. The specifics of a given enterprise is of course individual, but I would like to call attention to a select few topics that I’ve found as key in the digital transformation journey.

Stakeholder Management

When working with both the target state (TO-BE) and the baseline (AS-IS) to determine the GAP, the enterprise architect also needs to perform a stakeholder mapping and analysis in order to discover and confirm who in the enterprise that needs to be involved to ensure that vital information for business decisions flows to the digitalization initiative. The enterprise architect will need to work closely with the key stakeholders throughout the digitalization program, not only to retrieve information, but also to inform and mature them as a basis for change management. Once you start to get results from digitalization, the stakeholders will be important ambassadors and promoters of the achievements. Again this is an important success factor for actual change and digital transformation of the business.

Digital Business Architecture

The next topic of importance is the business architecture, including business process management (BPM) and business rules management (BRM). These capabilities are first and foremost about understanding the business, but also about the ability to model the business as a digital representation using a fit for purpose notation. A business process mainly consist of actions and rules. The actions are the execution-steps in the process, and the rules are about if and when to execute which actions. The reasons for documenting the business process is the same as for enterprise architecture – your mission is to optimize, automate and digitalize. This means change, and in order to change something you must know the current (AS-IS) and target (TO-BE) state – anything else is just guesswork, chance and at best risky – you want control.

Data Management

In order to describe the business process with its actions and rules, you need to a way to describe the information entities that the business process deal with. The entity description for an information-model within in one business domain is called a data domain model. The sum of all data domain models is known as the enterprise data domain model. This data model is vital input to anything digital, and the basis of data management and the service orientation of a digital business.

Security

Identity and access management (IAM), and security in general, are essential because digital business is much about making information available, and often through cloud platforms – which would be unthinkable without a safety-first approach. In addition to general security, IAM is about managing the rapidly growing number of identities connected to the enterprise digital platform, when not only employees, suppliers, partners and customers is part of your network, but also internet of things (IoT) with its potentially thousands upon thousands of sensors and devices. Last but not least comes the API Economy beyond your enterprise on a global sharing model.

The Enterprise Service Catalog

API Management provides the core capabilities to publish, secure, analyze, monitor and manage service APIs, and ensure a successful enterprise service catalog. The enterprise service catalog works as a gateway between IT and business. It exposes features and information services for intuitive usage, and enables self-service, automation and innovation – everything while abstracting the business -users and -developers from the underlying technological complexity. The services that are exposed through API Management make out the enterprise service catalog, and are defined and contracted using the data domain models already defined by business. This way the digital services maps and connects directly to the business processes enabling the control, effectivity and ownership necessary for a digital business.

Hybrid Integration Architecture

Integration Architecture is essentially what makes everything work together as one whole. It’s the basis of the interconnected service oriented application architecture, but also it connects the existing IT system portfolio (A2A). Integration connects on-premises and cloud applications in a hybrid integration architecture, it connects the inner API’s of the IT System portfolio to the outer service API of the enterprise service catalog (API Management), it connects partners, customers and suppliers (B2B), consumers (B2C), employees (B2E), things (IoT) and mobile devices. The list goes on, but you get the point – there will be no digital transformation without integration, lots of integration.

DevOps in two-speed IT

Last but not least on my list are DevOps and agile project management. The flexibility of a digital platform cannot be put to good use without the constituent agile processes and methodology. In order to reach the fluid mode of bimodal, where you can fail fast and release minimum viable products continuously, the application lifecycle management process must consist of both development and operations. This way innovation can happen unobstructed by handovers between teams. When the inner loop of this process is automated, including test, build and deploy, the devops resources can focus on producing new functionality, rather than spending time on pipes and plumbing.

Beyond the horizon

And after all that, if you still miss topics like process automation, analytics and artificial intelligence – I’d argue that these come later. It’s part of the motivation for digitalization; being able to work with modern innovative technology for business purposes without creating just another silo.