I see Fortune 1000 companies take on transformation initiatives, integrating technology and business, to propel their business forward – and sometime reinvent their business - in today’s modern markets. I also witness changes in their operations and methodologies to develop and deploy new business capabilities. In doing so, they must also adapt current strategies to manage risk.
One thing that is obvious to me is that, in a transformative company, IT is a strategic business partner, essential to the success of the company. They focus on the business’ goals and architect business capabilities that will foster change and agility. They recognize that agility is requisite and change is perpetual in a digital world. They also recognize that ongoing evolution of architecture, sometimes referred to as continuous architecture, is not without concern.
I often hear from critics of this movement that continuous change increases risk for the business. Their belief is that frequent and ongoing changes will create instability and vulnerability over time. However, I believe that risk may be avoided or more easily mitigated. Here’s why …
Business transformation is an iterative process and by architecting for a specific outcome, one that has been vetted with the business, risks are more easily managed. Project scope is smaller and the visibility is greater, making it easier to identify and mitigate risk.
In an agile environment, development and testing is completed in shortened time intervals – sometimes in two week increments. These intervals serve as check-ins throughout the change process, and this enables the business to identify and manage unexpected risks before they become a problem.
Incremental changes can also help identify the systems of most value to the business, which in turn can create a clear path from legacy resources and functional silos to a service-oriented approach. The days where projects were conceived, designed and implemented over years with minimal to no change in requirements are gone, even if the business changed around it.
Markets are evolving too quickly and businesses must be nimble because the biggest risk to any company is status quo.
I believe that intimate knowledge of the business – the technology, processes and people, and an understanding of “what if” scenarios – can aid IT in developing business capabilities that can sustain continuous evolution. In the age of business transformation, enterprise architecture should be a strategic asset. Knowing how applications, processes and people are connected provides valuable insights that can help identify, monitor and mitigate the risks tied to continuous architecture and drive business transformation.
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Buyers today have more choices and more influence over when and where and from whom they buy. Therefore, it’s critical for you to know how they ‘journey’ through your company, from initial encounter to purchase (or repeat purchase).
How you carry out your customer journey mapping will make a difference in whether it will be a useful tool or an academic exercise that doesn’t provide value.
Here are five common mistakes companies make in customer journey mapping:
They left out critical touchpoints in the customer journey.
The touchpoints you leave out could be the ones where most customers exit the journey.
They relied only on what they thought was important to customers.
Find out for sure; ask your customers or you could be dead wrong!
They assumed ‘one size fits all’, even when there were significant characteristic differences between customers.
Follow one map for homogeneous personas, but adapt it when there are differences. Two groups of customers may set out at the same place and travel the first three touchpoints together, but then diverge into multiple paths.
They didn’t consult with the people who had the right information for the journey map.
A small group, even one that is very knowledgeable, isn’t always effective when it comes to assumptions about customers. Include everyone who has any information about, interaction with, or insight into the behaviors of customers.
They failed to review or revise the customer journey map after it was first completed.
Review, revise, repeat. Keep looking at it as your company changes, but more importantly, as the world around you changes.
It is the age of the customer. They have more influence, control and power than ever before. As we transform our businesses to stay more connected to customers, we should keep in mind the lessons others have learned before us and not repeat their mistakes.
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Companies like Amazon, Airbnb, Netflix, and others carved out huge market share by being at the forefront of innovation. They created astonishing market changes by delivering products and services that enticed customers to abandon their previous choices, even for similar or the same products and services. Functionally, what was delivered to the customer wasn’t necessarily different … watching a rented video at home … paying for a ride from here to there … sleeping in a room overnight when away from home.
What did change was how people accessed, received or interacted with the product or service. And, that’s where mobile, social media, cloud and other newer technologies came in. These companies leveraged technology in new ways to satisfy changing customer desires without necessarily inventing new technology themselves, but using it to re-envision existing markets.
Many are how using the verb ‘blockbustered’ to describe this phenomenon.
There are more than a few execs who are losing sleep at night, wondering if their company isn’t able to innovate enough to stay ahead and if they’ll be blockbustered. They are overstressed trying to come up with the right roadmap to insure not just their survival, but new growth and profitability … they want to be the new Instagram, Tesla, or Venmo.
How can they meet this very large challenge? How can they transform … from doing things the old way to the new?
For most companies today, IT is the key. If your IT department isn’t able to support business needs as they evolve at light speed … if it can’t provide new technology (or bring technology together in new ways) to gather customers and partners closer to you … if it doesn’t transform from an antiquated cost center to helping generate new revenues … you may face a very rapid decline.
In the past, IT provided technology resources for the company, but how and what IT offered wasn’t always based on what business groups … who were trying to develop and improve products and services to go to market faster … really needed.
Fast forward to today, when the very best IT teams are agile enough to evolve and adapt what they provide to the business, so that innovation is fostered and enabled throughout the company. This innovation drives new revenue streams, increases profits, reduces risk and creates a thriving, competitive company.
So, how do the very smartest companies make the transition?
Because IT drives most businesses today, IT portfolio management is often a key step in business transformation. Most IT departments have to deal with legacy applications, more requests than they can fulfill, limited budgets, shadow IT and many versions of the same application across department lines. Compounding these needs is the fact that the entire business has to embrace digital technologies to push forward and stay competitive in its markets.
IT portfolio management helps you evaluate the business value, cost, risk and performance of each IT asset and create a roadmap that shows how to add and retire technologies at the right time. It helps streamline and predict IT investments, and avoid costly redundancies or obsolescence.
But, IT can only be transformed if you take a strategic approach and use a proven methodology and the right tools. IT portfolio management and enterprise architecture used to be considered as tools to sort out duplicate applications and a confusing maze of operational processes.
Today, however, both have become strategic assets necessary to unite IT with processes and business needs, allowing companies to meet new digital goals. It is the way companies are making sure they are not ‘blockbustered’.
After the IT portfolio is on sound footing and can better support innovation on the business side, an enterprise architecture initiative takes the company fully into business transformation. Enterprise architecture provides the comprehensive overview of the organization, allowing you to establish an innovative vision, improve business processes, optimize operating frameworks, build transition plans and foresee the impacts of change.
With this knowledge, you can respond faster to market changes and opportunities and determine how to change company operations to meet business needs.
The digital age has ushered in more changes faster than any other technological advance of the past century. To manage them properly, and insure that you aren’t blockbustered, it’s past the time to embrace the new digital era.
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Here’s a generic (far-fetched, but relevant) scenario:
CEO: “I want predictive analytics.”
CIO: “Ok, I hear you.”
The CIO shares the request with his team.
CIO’s team to CIO: “In order to provide predictive analytics, we need to upgrade our ERP system.”
CIO to his team: “Ok, we’ll upgrade the ERP.”
A dialogue goes on about funding between the CxOs.
CEO: “Here’s $5 million to put towards your project.”
CIO: “Thanks. I’ll meet with my staff about getting this project done.”
In this scenario, the conversation quickly shifted from a high-level need for predictive analytics to an implementation choice of upgrading the ERP. Someone, somewhere, will get a chunk of the funding to implement various systems, technologies, or practices – including that ERP system. Unfortunately, this has become a glorified game of telephone, where no one is paying attention to the original goal of providing predictive analytics for the executives. Here’s the problem: the disconnect has already happened. The IT team works hard to achieve the goal of the project - upgrade the ERP. Months later, they host a small party to celebrate a successful upgrade to their ERP. Of course, steps or tactics are required to deliver business outcomes. In this case, the company needs to upgrade their ERP to deliver predictive analytics. Unfortunately, as happens at many organizations, the focus shifted from the business capability onto the tactic, and through no fault of their own, the team lost sight of the original goal.
Let’s consider this scenario with agility added to the mix of project execution. Early and often, choices are made where the project’s path can be altered irreparably. In our example, the conversation veered off-course when the main objective shifted to become the safe delivery of the ERP upgrade. If your target was set based on a technological choice intended to achieve an outcome, and not the specific outcome itself, then you risk making decisions and taking actions that don’t contribute to achieving the original goal. At each step, remember to ask yourself, “Are we on the right track to deliver the business outcome the executives expect? Did something change?” Even further, are these questions being asked in the context of supporting a capability or are they in the context of deploying a project? Context matters because the answers will drastically differ depending on the actual goal.
Working sessions and meetings could result in pivot points that might change the course of the project. If you start the project with smaller pieces (milestones) in mind that are defined in the context of the capability evolution (business outcome), then the pivots are made to stay in alignment with executive expectations. If you are measuring success based on the achievement of the capability evolution then you won’t lose sight of the project’s original intention. You’ve changed your mode of thinking. The project still exists, but it will be funded through capability evolution. When procuring technology to support the evolution of the business capability, you’re buying/enabling abilities with a business outcome-driven mindset, not just technology for the sake of technology.
Gartner 1 states that “by 2017, 60% of Global 1000 organizations will execute on at least one revolutionary and currently unimaginable business transformation effort.” The ability to track strategy as it relates to concerns, business drivers, influencers, and issues is directly related to projects making or missing their mark. A capability-based approach to project execution is your answer to tracking strategy. According to Gartner, “almost 90% of transformation projects miss their mark.” Organizations that fund business capability evolution will close the gap between strategy and failed implementation. It’s important to detach your thoughts from legacy constraints because, when you’re tied to implementation, your scope can become very narrow. Looking at questions or concerns from a capability perspective is an abstraction of thought. Don’t focus on “how” you do it. Focus on “what” it is that you’re doing.
The Enterprisers Project states that “when faced with a business challenge, business leaders often have a good idea where they need to go and how they must evolve. But there is often a mismatch in how prepared they perceive their organization to be, and the cold, hard reality within their walls.” Let’s take a step back and look at the initial conversation about the request for project funding. When trying to get funding, stop talking about projects or technologies or roadmaps or backlogs. Instead, focus the conversation on capabilities. If you talk about, and lead with, capabilities, then to some degree, technology ends up being what enables everything. You’re bound to get much farther in the conversation and become the bridge between reality and perception.
Business leaders seek to manage complexity and create visibility into and traceability of their business and IT landscape, but what does that really mean to the funding and evolution of business capabilities? Keeping a focus on capabilities that are delivered is critical to success.
1. Source: Gartner. “Digital Business Architecture Fuels Digital Business Strategy.” Betsy Burton. October 2015.
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