Category Digital Transformation

AT#50: Eleven Collaboration Principles For Your Digital Transformation

AT#50: Eleven Collaboration Principles For Your Digital Transformation

 

Architectural Thinking is very much about thinking in elements and relations and becoming aware that “your” sphere of design is only one part of the overall enterprise design. As this enterprise design can only be created together, people need to collaborate. Today’s blog post was written by Hans van Bommel and has originally appeared on his Cycle to Accelerate blog. It discusses collaboration principles for your digital transformation. Enjoy!

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Agile primarily is an intangible phenomenon. The most powerful impulse the agile manifesto gave us, is the power to imagine that we can be agile by responding swiftly and adequately to the ever-appearing change. When you start to cycle, you’ll feel this need to be agile more keenly than ever.

 

When we enter a digital transformation, we need this agile behavior. We cannot do without. Our network, our board, our IT governance, our team and therefore our enterprise will probably not survive without this behavior.

 

At the same time, if we want to become high performers, knowledge and the way we organize our IT production activities and overcome constraints are even of greater importance. Agile behavior within an organization is therefore also needed to attend to production activities in different roles at different moments in time.

 

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AT#49: Digital Transformation: What Companies should learn from ‘Christkindlmarkt’ Vienna

AT#49: Digital Transformation: What Companies should learn from ‘Christkindlmarkt’ Vienna

A recent article by an Austrian newspaper stated that the growth in sales of the ‘Christkindlmarkt’ (Christmas Market) Vienna exceeds the turnover growth of online shops by 30%. At the first instant, I was quite surprised by this fact. Why are traditional business models like of the Christkindlmarkt still competitive? Why are companies of the old economy like large banks still around even if not having radically transformed to innovative business models?

In my opinion, the best answer to these questions is given by the German philosopher Odo Marquard . His famous essay “Zukunft braucht Herkunft” (“Future needs Ancestry”) discusses why every innovation must be based on the capabilities that have evolved over centuries. In other words – if you are an elephant even years of training cannot make you a zebra. If you are the Vienna Opera even hundreds of Agile coaches cannot make you Spotify. If you are a big bank even thousands of consultants cannot make you a fintec.

After some contemplation, I asked myself questions like:

  • Could it be that we admire companies like Amazon too much?
  • Do we live in an age that believes too much in technology and progress?
  • Are companies of the old economy aware of their tremendous strengths that still keep them in front of innovative startups like fintechs?
  • Is the hype of digital transformation slowing down because of the reality of real, tangible assets that can not be disrupted by internet companies?

After answering these questions from my point of view I would give the following recommendations: Read More

AT#48: How to Ride an Elephant in Digital Times?

AT#48: How to Ride an Elephant in Digital Times?

Let’s look back four years and remember what consultants predicted for the digitally transformed future of companies. Expectations were high, a bright, technology optimistic future was drawn in vivid colors – self-driving cars, disrupted businesses, AI automates all backoffice processes, etc. etc. And now – let’s compare this to the reality of enterprises of the old economy – yes, companies have run punctual innovation initiatives, banks have modernized their mobile payment apps . But substantially? Nothing has “transformed”! Digital transformation of the old economy is happening at a much slower pace than expected. So, the question is: why? Why are big companies still around without having changed their business models substantially? Read More

AT#20: Why Digital Transformation fails without Architecture

AT#20:  Why Digital Transformation fails without Architecture

Structure not only increases our chance to success,
it makes us more efficient at it.’ – Marshall Goldsmith

When people discuss digital transformation, they talk mostly about innovation, agility and new technologies. Companies put a tremendous amount of effort into initiatives that should make them more agile and innovative, but most of the companies I know do not manage their innovation initiatives towards a big architectural picture. The overly complex structure of dependencies between innovation- and other projects, and between new technologies and legacy-IT, are not handled with intent. Just present a fancy technology to top-level executives. If it has a low time-to-market and includes AI, chances are high that you can do it. No matter if it’s integration with legacy IT results in unnecessary complexity, ‘technical debt’ that introduces a total cost of ownership that outnumbers the business benefits by far. No matter if it is architecturally sound.

Let’s have a closer look at what ‘architecturally sound’ means, what architecture is all about and why the concept of architecture is helpful, especially in the context of innovation: Read More

AT#13 Companies are Elephants!

AT#13 Companies are Elephants!

The famous parable of the blind men and an elephant is a story of a group of blind men, who have never come across an elephant before and who learn and conceptualize what the elephant is like by touching it. Each blind man feels a different part of the elephant’s body, but only one part. They then describe the elephant based on their limited experience and their descriptions of the elephant are different from each other. The complete text of the poem is here.

When I read the parable I instantly found it to be very suitable to use it for companies within the digital transformation. Companies are elephants employing blind men like: Read More

Three Steps to Regain Control over your IT Landscape

Three Steps to Regain Control over your IT Landscape

Most IT landscapes of larger companies consist of hundreds of applications that are interconnected via poorly designed interfaces. In most companies, these IT landscapes already have an enormous technical debt (i.e., an ‘unnecessary complexity’). In my experience, a company typically runs between 80% and 90% more IT applications (and therefore also servers, databases, networks, costs) compared to what would be needed if it had implemented the ideal architecture. A tremendous waste of money and resources, and the reason why IT is perceived as tardy and as a cost factor and not as an enabler. From my point of view, there are three major reasons for this disastrous situation:

Business Units are not aware of their responsibility for their applications and do not think architecturally

There is a tendency to blame the IT department for this situation, but that’s not true. It’s a business problem. Requirements are typically not consolidated well across departments. IT has always just been the contractor who had to implement those punctual requirements under time pressure. Read More

AT#22: Digital Transformation: What Companies should learn from ‘Christkindlmarkt’ Vienna

AT#22: Digital Transformation: What Companies should learn from ‘Christkindlmarkt’ Vienna

A recent article by an Austrian newspaper stated that the growth in sales of the ‘Christkindlmarkt’ (Christmas Market) Vienna exceeds the turnover growth of online shops by 30%. At the first instant, I was quite surprised by this fact. Why are traditional business models like of the Christkindlmarkt still competitive? Why are companies of the old economy like large banks still around even if not having radically transformed to innovative business models?

In my opinion, the best answer to these questions is given by the German philosopher Odo Marquard . His famous essay “Zukunft braucht Herkunft” (“Future needs Ancestry”) discusses why every innovation must be based on the capabilities that have evolved over centuries. In other words – if you are an elephant even years of training cannot make you a zebra. If you are the Vienna Opera even hundreds of Agile coaches cannot make you Spotify. If you are a big bank even thousands of consultants cannot make you a fintec.

After some contemplation, I asked myself questions like:

  • Could it be that we admire companies like Amazon too much?
  • Do we live in an age that believes too much in technology and progress?
  • Are companies of the old economy aware of their tremendous strengths that still keep them in front of innovative startups like fintechs?
  • Is the hype of digital transformation slowing down because of the reality of real, tangible assets that can not be disrupted by internet companies?

After answering these questions from my point of view I would give the following recommendations: Read More

AT#20: Why Digital Transformation fails without Architecture

AT#20: Why Digital Transformation fails without Architecture

Structure not only increases our chance to success,
it makes us more efficient at it.’ – Marshall Goldsmith

When people discuss digital transformation, they talk mostly about innovation, agility and new technologies. Companies put a tremendous amount of effort into initiatives that should make them more agile and innovative, but most of the companies I know do not manage their innovation initiatives towards a big architectural picture. The overly complex structure of dependencies between innovation- and other projects, and between new technologies and legacy-IT, are not handled with intent. Just present a fancy technology to top-level executives. If it has a low time-to-market and includes AI, chances are high that you can do it. No matter if it’s integration with legacy IT results in unnecessary complexity, ‘technical debt’ that introduces a total cost of ownership that outnumbers the business benefits by far. No matter if it is architecturally sound.

Let’s have a closer look at what ‘architecturally sound’ means, what architecture is all about and why the concept of architecture is helpful, especially in the context of innovation: Read More

AT#19 The only effective Way to drive Digital Transformation

AT#19 The only effective Way to drive Digital Transformation

For a long time, setting the direction of a company was done by a small group of top executives that elaborated a detailed business strategy. Business strategies typically define goals that are normally associated with the creation of value for the coming ten years or so. The concept of ‘Business Strategy’ has been introduced in the 60ies by [Chandler62]. 

This 50+ years old concept is still valid today. What has changed dramatically over these 50+ years is the planning horizon. The notion of ‘long-term’ became shorter and shorter. Today, in the VUCA world, there is no ‘long-term’ anymore. Strategies become more fluid, like software that needs constant upgrading. The reality, today, is that most companies do not have a clearly written out strategy. Why formulate a strategy any more when things are changing before you have your strategy ready?

But how do you make strategic decisions without a clear, verbalized strategy? The answer is given by [Westermann14]:

‘The only effective way we’ve seen to drive transformation is top-down, through strong senior executive direction coupled with methods that engage workers in making the change happen by setting direction, building momentum, and ensuring that the company follows through. This kind of change does not happen through a simple mandate, it must be lead. Among the companies we studied, none have created true digital transformation through a bottom-up approach. Successful transformation starts at the top of the companies’.

What you should do: Read More

AT#18: Use Business Capability Maps as the key to the hidden Treasures of Digital Transformation

AT#18: Use Business Capability Maps as the key to the hidden Treasures of Digital Transformation

Today, every company in the world is looking for ways to transform in the direction of more digital capabilities. Many companies of the old economy look up to companies of the new economy like Amazon or Google and perceive them as role models if not as archetypes. Most of these companies want to become ‘a bit like Amazon’ but forget about one key thing: their existing business capabilities that represent the strengths that made them successful in the past. They do not model their current and strategic future capabilities systematically. They do not use the key to open the treasure chest of digital transformation.

The basic idea of capability modeling is simple: structure the business of a company hierarchically by capabilities it needs to create customer value.

Why is it important to model business capabilities?

  • Capabilities clarify terms and concepts across organizational borders.
  • Capabilities provide a robust skeleton, a framework for assigning all the other elements of the enterprise architecture.
  • Capabilities can be used as the central structure for heat mapping in order to answer questions such as: ‘Which strategic fields of actions do we see in which capability’; ‘In which capabilities are we planning to invest how much?‘; ‘Which capabilities are not supported enough by IT?’
  • Assigning IT-applications to capabilities is a powerful way to support business & IT alignment.

What you should do:

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