Architecture for Digital Transformation

by Mike Rosen

March 2020

The past few years have seen dramatic changes in technology, business models, enterprise systems…in other words, digital transformation. Everyone has heard the hype about digital transformation, but the fact is that it isn’t hype. A fundamental shift is taking place that requires new business models, new technologies, new organization structures, and new architectures.

Driven by real time customer engagements, an order of magnitude increase in data, accelerating speed of change, the instantaneous yet temporary nature of the cloud, exponential increases in computing power, and cognitive / AI / ML technologies, this combination of new realities is enabling solutions that weren’t possible before. It’s not that everything you used to know is now wrong, but it has all changed.

This new world is dynamic, decentralized, data driven, automated, and self-learning. A decentralized architecture, supporting real-time and near-real-time experiential engagements, ecosystem awareness, augmented decision making, automated and connected products and services, and more is needed. But, like everything else, architecture must also change to keep pace with the new realities of today.

Architecture for digital transformation:

• Focuses on adaptability, flexibility and speed of change as a primary characteristic.
•  Distributes autonomy to the edges while maintaining critical consistency at the core and throughout the ecosystem.
• Enables the creation of the new ‘digital business platform’ needed to thrive in the digital economy.
• Provides a new framework for thinking about architectural scope, scale and speed.

Architecture helps organizations understand the big picture, what all the pieces are and how they fit together to meet requirements, how to integrate them for consistency and interoperability, and how to balance efficiency and effectiveness against agility and flexibility. With digital transformation, the number of "moving parts" has greatly expanded and the need for them to work together is critical to user experiences. The complexity of the issues has increased exponentially. Architecture gives organizations a way to understand and manage that complexity. By decomposing the whole into constituent parts, it allows organizations to address each component in a thoughtful, thorough, and coordinated manner.

For digital business architecture, the scope of the "big picture" is all aspects of the entire enterprise in its entire ecosystem. To manage that scope, architects divide the picture up into subject areas (constituent parts) called architectural domains. The four domains of business, information, application, and technology represent the traditional view of enterprise architecture. And while these domains are still applicable and useful, they no longer provide a sufficient model for thinking about enterprise IT and its relationship to business and transformation. Four additional domains expand the architectural big picture to address the needs of digital transformation.

To understand the new architecture, let’s start with aligning it to business. Strategic priorities provide the requirements for our digital business platform. Architecture describes the modular functions that the platform must provide to achieve those priorities:

Business architecture translates strategies into value exchange, required capabilities, and initiatives.

Information architecture identifies data and information sources, storage, management, and semantics necessary to achieve the outcomes and benefit from new cognitive capabilities.

Performance architecture defines critical success factors and KPIs to manage and measure outcomes that achieve the strategic priorities.

Together, the business and information architectures describe value and how it is exchanged throughout the ecosystem, and they describe the platform and industry capabilities required across the enterprise to meet its set of strategic priorities. In other words, they describe what is needed in order to achieve business outcomes. Another question is how to determine if those outcomes are being achieved, what KPIs to use to measure them, and how to improve them. Performance architecture identifies what and how to collect the metrics necessary for these KPIs.

The above architectures describe what to implement and how to measure it, but we also need to know how to implement the platform that achieves that. The following architectures describe this implementation:

• Security architecture infuses digital trust and integrity throughout the enterprise, including all aspects of business, information, and technology.
• Service architecture defines how to deliver platform capabilities as pay-as-you-go services.
• Application architecture defines how to use the DX platform to build applications and how to manage the application and service portfolios.
• Integration architecture defines how business, information and applications are tied together to provide a consistent experience, and how SaaS and other external products are added to the enterprise environment.
• Technology architecture defines the hybrid technology infrastructure to support the DX platform.

Together, these architectures describe the digital business platform -- the business capabilities and technology infrastructure – that can move an organization forward in the new digital economy. This is both an internally and externally facing platform with the key objective to create a network of connected customers, partners and suppliers that use and provide the real-time information and constantly updated services available to them.

In this new platform, everything is connected to everything else. Data comes into the organization through connected assets, employees, connected processes, or as other data streams through APIs, etc. This data circulates through the platform’s intelligence / analytics core which can discover insights. Those insights circle back as improved internal processes. But data also comes in through the ecosystem through mobile devices, connected vehicles, smart products, etc. This data circulates through the platform as well, turning the data into actions to be taken when engaging with the ecosystem.

In other words, it’s not just about the platform or the data, but what an organization does with it that makes the difference. In many ways, the new digital economy can be paraphrased in three words: “Sense, Compute, Act”. How you sense the environment and manage the data from edge to core to cloud, how you analyze it in near-real-time, learn from it, and then act on it to affect outcomes. IoT, mobile devices, big data, machine learning, cognitive/AI all combine to continually sense and collectively learn from an environment. What differentiates winners is how they leverage that to create connected products, deliver meaningful, value added predictions and actions for personalized life efficiency/convenience, improve industrial processes, experiential engagement, or any enterprise decision making. And what enables those winners a digital business platform based on a new enterprise digital architecture.