Tag Archives: disruption

Digital Strategy and Architecture

Digital Strategy and Architecture

Digital Strategy and Architecture

The subject of digital strategy came up at an MIT CISR conference I attended earlier this month.  To organizations that were founded and built on a digital foundation (such as Google, Amazon, HubSpot) this is nothing new, but to the majority of organizations, this represents significant disruption and change.

What is digitization? 

It can take many forms.  Here are a few types of digitization of business and examples:

TYPES EXAMPLES
Products that add digital components Sports equipment with sensors for immediate feedback
Products sold through digital channels Conde Nast magazines
“Solutions” that are assembled and delivered in digital channels USAA Insurance
Products that are entirely digital Apple iTunes, eSurance, PayPal, Google
Companies monetizing their data Healthcare clinical data

The really interesting thing about digitization that you can see from some of the examples above is that it enables new competition to enter your space and competitors to leap industry boundaries.  The concept of “barriers to entry” itself is eroding.

The Impact of Digitization on IT

Some interesting facts from MIT CISR’s research with Boards of Directors on digitization jumped out at me:

  • Board members estimate that 32% of company’s revenues are under threat from digital disruption.  This is a really stunning number when you think about it.
  • Half of Board members believe that their board’s ability to oversee the strategic use of IT is “less than effective.”
  • 26% of Boards hired consultants to evaluate major projects or the IT unit.
  • 60% of Boards want to spend more time on digital issues next year.

The Impact of Digitization for Architects?

It boils down to two things:

  1. Architects need to deliver a digital platform to enable business agility in a time of increasing competition and disruption. This includes standardization around business processes, data, and the platform.
  2. Architects need to get more proactive in the strategy process for their organizations both in terms of the platforms and architecture and in terms of a general understanding of the challenges and opportunities that arise from digital disruption.

For more on enterprise data architecture, best practices and reference architectures see the eBook:  Think “Data First” to Drive Business Value

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Building a Data Foundation for Execution

Building a Data Foundation for Execution

Building a Data Foundation

I have been re-reading Enterprise Architecture as Strategy from the MIT Center for Information Systems Research (CISR).*  One concept that they talk about that jumped out at me was the idea of a “Foundation for Execution.”  Everybody is working to drive new business initiatives, to digitize their businesses, and to thrive in an era of increased technology disruption and competition.  The ideas around a Foundation for Execution in the book are a highly practical and useful framework to deal with these problems.

This got me thinking: What is the biggest bottleneck in the delivery of business value today?  I know I look at things from a data perspective, but data is the biggest bottleneck.  Consider this prediction from Gartner:

“Gartner predicts organizations will spend one-third more on app integration in 2016 than they did in 2013. What’s more, by 2018, more than half the cost of implementing new large systems will be spent on integration. “

When we talk about application integration, we’re talking about moving data, synchronizing data, cleansing, data, transforming data, testing data.  The question for architects and senior management is this: Do you have the Data Foundation for Execution you need to drive the business results you require to compete?  The answer, unfortunately, for most companies is; No.

All too often data management is an add-on to larger application-based projects.  The result is unconnected and non-interoperable islands of data across the organization.  That simply is not going to work in the coming competitive environment.  Here are a couple of quick examples:

  • Many companies are looking to compete on their use of analytics.  That requires collecting, managing, and analyzing data from multiple internal and external sources.
  • Many companies are focusing on a better customer experience to drive their business. This again requires data from many internal sources, plus social, mobile and location-based data to be effective.

When I talk to architects about the business risks of not having a shared data architecture, and common tools and practices for enterprise data management, they “get” the problem.  So why aren’t they addressing it?  The issue is that they find that they are only funded to do the project they are working on and are dealing with very demanding timeframe requirements.  They have no funding or mandate to solve the larger enterprise data management problem, which is getting more complex and brittle with each new un-connected project or initiative that is added to the pile.

Studies such as “The Data Directive” by The Economist show that organizations that actively manage their data are more successful. But, if that is the desired future state, how do you get there?

Changing an organization to look at data as the fuel that drives strategy takes hard work and leadership. It also takes a strong enterprise data architecture vision and strategy.  For fresh thinking on the subject of building a data foundation for execution, see “Think Data-First to Drive Business Value” from Informatica.

* By the way, Informatica is proud to announce that we are now a sponsor of the MIT Center for Information Systems Research.

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Posted in Architects, Business Impact / Benefits, CIO, Data Governance, Data Integration, Data Synchronization, Enterprise Data Management | Tagged , , , , , , | Leave a comment

Enterprise Architects as Strategists

Data Architecture

The conversation at the Gartner Enterprise Architecture Summit was very interesting last week. They central them for years had been idea of closely linking enterprise architecture with the goals and strategy.  This year, Gartner added another layer to that conversation.  They are now actively promoting the idea of enterprise architects as strategists.

The reason why is simple.  The next wave of change is coming and it will significantly disrupt everybody.  Even worse, your new competitors may be coming from other industries.

Enterprise architects are in a position to take a leading role within the strategy process. This is because they are the people who best understand both business strategy and technology trends.

Some of the key ideas discussed included:

  • The boundaries between physical and digital products will blur
  • Every organization will need a technology strategy to survive
  • Gartner predicts that by 2017: 60% of the Global 1,000 will execute on at least one revolutionary and currently unimaginable business transformation effort.
  • The change is being driven by trends such as mobile, social, the connectedness of everything, cloud/hybrid, software-defined everything, smart machines, and 3D printing.

Observations

I agree with all of this.  My view is that this means that it is time for enterprise architects to think very differently about architecture.  Enterprise applications will come and go.  They are rapidly being commoditized in any case.  They need to think like strategists; in terms of market differentiation.  And nothing will differentiate an organization more than their data.    Example: Google autonomous cars.  Google is jumping across industry boundaries to compete in a new market with data as their primary differentiator. There will be many others.

Thinking data-first

Years of thinking of architecture from an application-first or business process-first perspective have left us with silos of data and the classic ‘spaghetti diagram” of data architecture. This is slowing down business initiative delivery precisely at the time organizations need to accelerate and make data their strategic weapon.  It is time to think data-first when it comes to enterprise architecture.

You will be seeing more from Informatica on this subject over the coming weeks and months.

Take a minute to comment on this article.  Your thoughts on how we should go about changing to a data-first perspective, both pro and con are welcomed.

Also, remember that Informatica is running a contest to design the data architecture of the year 2020.  Full details are here.

http://www.informatica.com/us/architects-challenge/

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