An Enterprise Architecture Perspective on Digital Business
The ascent of digital business has been staggering. It’s not only changed the landscape on which businesses typically operate, it’s also fundamentally changed the way customers both perceive and interact with the business. Weekends and national holiday’s no longer mean shorter business hours, as the consumer is ready, able and willing to reach out to a business at any time.
In a 2015 Gartner study on CIO’s, the analysts found that 16% of all revenue, and nearly half (42%) of all processes “are already derived from digital product and services.” Furthermore, the consensus is that these figures are set to increase.
Don’t shy away from Digital Business
These large scale industry shifts can be a red flag for many. Accelerated change has a knack for leaving many businesses behind, and this is an acceleration of unprecedented levels. However, much has been said about how businesses need to adapt to change, rather than dig in their heels. And while it’s important that those still timid about embracing the change eventually do so (sooner rather than later, mind), the benefits of embracing digital business go far beyond simply ‘survival’.
Take the Internet of Things, for example. A marker of wheredigital business is heading, it’s consensually agreed that the number of connected devices is likely to hit 50 billion by 2020, and the value of the industry to be around $14.4 trillion – factoring both revenue, and savings due to lower costs.
Furthermore, the potential beyond 2020 is even more lucrative, thanks to the promise of more data, and more data sources. One of the benefits we’ve already experienced, as industries have transitioned to accommodate more digital business, is the increased insight that customer data has provided us.
The most straightforward case, being the brick and mortar store expanding into online markets. The data captured thanks to this change has helped retail stores of all markets both target their customer base with more accuracy, and make more meaningful business decisions based on a more reliable perception of the market.
Therefore, if implemented properly, not only will digital business bring in new levels of profit, from both new and old revenue streams; paired with the right tools, it will also provide insight into new business opportunities and areas of improvement.
What does this mean for Enterprise Architects?
As you would imagine, the role of Enterprise Architecture (EA) in all of this is to oversee, and facilitate the transformation. In many cases, EAs are already seeing this. When surveyed by Gartner, 70% of leading EAs they were already heading up the transformation into new digital business avenues.
Gartner research director, Mike Walker said: “Enterprise architects have a great opportunity to position themselves at the heart of digital businesses.
“This could take the form of establishing a business competency center that explores how the IoT can create innovative breakthroughs for the organization’s business models, products and services through rapid experimentation.”
The industry at large can guarantee two things, and both will change expectations of what the EA domain is about.
New technology can and will be a source of disruption. This is by no means a new phenomenon, but with the expected rate in which the industry landscape will change, will require revisions in how such challenges are dealt with. For a start, Enterprise Architecture will have to become more agile. This way, new disruptions can be met efficiently without severely impacting the business. The speed in which the business landscape can change now requires agility throughout the organization.
A new app, or SaaS alternative to a businesses service/product can change the playing field over night. If a businesses Enterprise Architecture initiative, that oversees systems and transformation isn’t equipped for agility, then how will the business at large be able to pivot in response?
New opportunities will be a source of new revenue streams. If businesses fail to capitalize on these new sources of revenue, they’ll likely flounder and fade away. Here, Enterprise Architects will be actioned to spearhead the search for such opportunities, as EA’s top down, wide lensed view of the organization means that they’re in a great position to spot them.
This is one of the reasons the ‘Vanguard Enterprise Architect‘ was introduced. Business leaders, realized that Enterprise Architects could be just as valuable as innovators and thought leaders in the business, as the traditional, support focused ‘Foundational’ EA role.
By doing ‘business outcome’ focused EA, and leveraging business capabilities, EAs can spot areas of the business and IT to be consolidated, invested in, or changed to increase efficiency within specific departments and across the organization. This will not only ensure the transition into digital business is smooth, but that the business will still be proactive in finding new revenue sources in the interim.
Enterprise Architects mirror the progression we’ve seen from IT at large. A once support focused, arguably fringe discipline now finds itself at the center of the organization, influencing almost all arms of the business. With the rise of the Internet of Things, and this latest transition into a more digital business orientated world, Enterprise Architects will find themselves more in demand than ever.
There are many benefits a well implemented EA team and strategy can bring – especially in the face of change as vast as this – including a reduced business risk associated with IT; better alignment of business strategy and implementation; increased flexibility and agility, and a generally more efficient IT operation.