Reasons why digital transformation fails
A US conglomerate struggled with their ambitious widespread transformation plan to drive digital capabilities into the various business units. The company was too focused on opening new revenue streams through digital transformation and made poor investment decisions. In the end, the excitement and hype left the company with a “money-sink” when the newly created subsidiary failed to deliver the originally stated returns.
Adopting a big-bang approach towards digital transformation can be overwhelming without a strategic technology vision. A UK bank wanted to replace all its legacy systems and adopted the big-bang approach in their transformation journey. They underestimated the complexity of change and associated risks without fully understanding how their IT assets, technology and processes would be impacted. For almost all banks, replacing a core banking system could be a daunting task due to the complexity and risks involved, which is sometimes compared to changing engines on an airliner at 30,000 feet. The bank struggled and failed to transform which could have been avoided with better visibility and control over their IT landscape.
According to Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” One way to be more responsive is to focus on customer-centricity. The smartphone revolution provides a good example of how a leading player can lose their market share from innovating too slow and failing to understand the ever-changing customers’ demands. The company struggled to stay ahead in the smartphone market while competitors ploughed ahead.
Enterprise architecture can prevent transformation pitfalls
Digital Transformation is not just another IT project. Companies should take a holistic approach to digital transformation that encompasses strategy, business process, and the IT landscape as a whole. Leveraging on enterprise architecture framework can help companies lay the groundwork for – and capitalize on – digital transformation initiatives.
Here we look at how enterprise architecture could help companies avoid the common pitfalls mentioned including lack of strategic planning, poor visibility and no customer-centricity:
Enterprise Architecture can help in better strategic planning
Transformation without a clear strategy is bound to fail as there is no roadmap to success. Companies should leverage on enterprise architecture as integral to strategic planning. With an integrated view of the enterprise, enterprise architecture can help to align the enterprise vision and strategy to business’ goals. They assess the required capabilities to support strategy execution and helps to communicate a clear enterprise roadmap for change.
Enterprise architecture bridges the gap between strategy and execution to help companies make better planning for future investments and allocate resources and technologies more effectively.
Enterprise architecture breaks the silos in the organization and creates a collaborative structure that promotes better business-IT alignment and consistency at all layers of enterprise architecture. It helps to unite stakeholders and gives them visibility into future transformation initiatives and expected results.
Enterprise Architecture can help in increasing visibility
Transformation is about challenging the status quo and if necessary, adapting to changes. These changes apply to the IT landscape where organizations need to understand what applications or IT systems they are changing. And when we ask a simple question, “How many applications do you have?”, not many organizations can provide a definitive answer.
Without visibility, organizations struggle to justify new budget and tend to make poor investment decisions. The organic growth of IT systems can make the IT landscape become even more complex. Unchecked, complex IT landscapes can result in duplicate applications providing the same capabilities, and unnecessary applications that are consuming lots of resources. Companies will face undesired risks of having their business-critical applications relying on obsolete technologies.
By adopting an enterprise architecture framework, companies can gain full visibility into the business and IT landscape. A simplified and rationalized IT landscape allows organizations to introduce new changes to systems, technologies, or servers easily and manage the impact of these changes on the business. EA puts a strong governance in place that can help companies to manage risks proactively, allowing businesses to deliver uninterrupted services to customers.
Enterprise Architecture can help in adopting customer-centricity
Nowadays, customers demand an omni-channel experience and organizations struggle to provide a consistent and seamless experience at every customer touch point. To overcome this challenge and adopt customer centricity, organizations should leverage enterprise architecture principles and understand their customer journeys.
Customer journey is not only about measuring customer satisfaction through surveys or face-to-face meetings, it involves mapping and understanding their journeys for better retention and acquisition of new customers. It helps to determine key moments and interactions of the customers, assess each interaction to provide better experience and services, and understand the support needed from internal resources which include IT systems and technologies, processes and multiple departments. By employing customer journey maps, organizations can align technologies with customer experience, and continuously increase customer satisfaction.
To enhance customer-centricity adoption, organizations need to revisit their internal processes and understand how they are aligned with customer touch points. Processes are mapped to help organizations identify improvement opportunities and remove bottle-necks in processes. The process improvement must be properly governed, and content of the business processes must be communicated and shared with everyone in the organization to ensure alignment. Improvement of processes is a continuous effort, so it is always good to get feedback from customers and perform internal process assessments to test their quality and make further improvements.
To see more about how companies can leverage enterprise architecture to help them succeed in their digital transformation, watch our webcast “Transformation Pitfalls and why Enterprise Architecture matters” with our guest speaker Andrew Blades, Founder & Chief Contributor from Australasian Architecture Network.
