Ten Tips on using a Strategic Architecture Approach to Digital Transformation

With all the new platforms out there like Salesforce, Microsoft and Service Now isn’t it a matter of picking the right platforms and implementing the functionality using the low-code, no-code platforms.

That way you get the functionality for your staff into their hands, and they can implement digital transformation. Implementing Strategies and associated Architecture is not required and just slows down the process of implementing new technologies and tools. Not So Fast!

Does this sound familiar as it does come up regularly, but it can lead to failure.

How do we select the best mix of platforms for certain business capabilities?

How do we improve digital literacy in the organisation?

How will change management be undertaken?

How do we make the customer central to everything we do?

Digital Business Transformation is vital but implementing change organically can be dangerous. Strategic Architecture can make all the difference to a successful implementation. But what exactly is it, and why is it so important?

Strategic architecture provides a high-level long-term view of an organisation and is a framework for aligning strategic business goals with business and ICT capabilities.  Strategic Architecture is the secret sauce, the ingredient that every organisation needs to ensure everyone in the organisation is focused on business outcomes. Strategic Architecture is a building block for Digital Business Transformation. It involves planning, designing, and implementing solutions that not only meet current needs, but also sets the stage for future growth and innovation. When it comes to digital transformation, strategic architecture is essential for ensuring alignment to strategic objectives in a rapidly changing landscape. By leveraging the right technologies and processes, organisations can streamline operations, improve customer experiences, and unlock new revenue streams. In short, strategic architecture is the foundation upon which successful digital businesses are built as it is the glue that links business strategy with transformation projects.

Here are ten tips on how Strategic Architecture can improve your digital business transformation program:

Strategic Architecture is an essential pillar that underpins any organisation’s success in digital business transformation. The framework holistically manages enterprise architecture, design, project management and delivery to ensure alignment to strategic business objectives. It is a comprehensive approach that allows for Digital and ICT Strategies to be aligned with their business goals to optimise the existing technology infrastructure and identify opportunities for innovation. By implementing a robust strategic architecture framework, organisations can ensure their resources are being used efficiently, their processes are aligned with their objectives, and their technology investments are delivering maximum Return on Investment ROI. Ultimately the holistic approach enables organisations to achieve sustainable growth and long-term success in today’s ever-evolving digital landscape.

Outlining the overall objectives of digital transformation and mapping out an achievable plan is essential. Organisations should strive to create a shared understanding of what success looks like, both short-term and long-term. The vision needs to short, sharp, and focus on ensuring that the business is fully optimised to make the most of the digital landscape. This can include optimising processes to harnessing the untapped potential of data, a strategic approach to digital transformation can help unlock new opportunities for growth to stay competitive, offer better services and cost efficiencies. Creating a strategic view, that encapsulates a clear vision is critical.

One where senior executives say, 'Now I understand'. It may not be an easy thing to do when presented with complex problems that you have in digital business transformation, but it is essential. It also needs to be clear for all people in your organisation and establish a good foundation that can be further explained and be utilised as something to strive towards.

Strategic Architecture also requires updating executives with clear and concise presentations that report back on deliverables aligned to the clear vision that is established. This removes the complexity and in a short time they can understand where the digital transformation program is at and how all the delivery areas work together to meet the vision that they have set.

Digital transformation requires constant adaptation and innovation to keep up with the ever-changing technological landscape. It's important to foster an environment where experimentation and taking risks is encouraged and rewarded. Innovation is the key to success in the rapidly changing world of digital business transformation. Developing strategic architecture provides that holistic approach to digital transformation, with a strong focus on collaboration, experimentation, and continuous improvement. It also means challenging current assumptions and embracing new technologies and business models. By creating a culture that values innovation and provides the right tools and incentives for it to flourish, businesses can stay ahead of the curve and achieve long-term success in the digital age.

When working with a government department I developed an Innovation Hub and this was a strategic move towards facilitating digital transformation. An innovation hub served as a ‘think tank’ where ideas can thrive and grow. In another department I established a ‘Design Hub’ where business representatives presented problems and through a design thinking approach the multidisciplined team implemented solutions. The team included developers, solution architects and change managers collaboratively developed solutions, iterative prototyping, and co-design with customers.

A sound governance model is essential for successful digital transformation. This should include accountability, structure, and policies that ensure the efficient use of resources and adherence to standards. Establishing a governance model is a crucial step to aligning digital transformation with the overall business strategy and enabling agile project management. This model provides a clear framework for decision-making, identifies key stakeholders, and outlines the responsibilities of all parties involved. By bringing all stakeholders on board and actively involving them in the digital transformation process, business can drive innovation, stay competitive, and deliver value to their customers. In essence, a governance model is like a compass that guides business towards achieving their digital transformation goals.

Creating a maturity model is vitally important and a key part of assessing where you are currently, where you need to be in the transition stage in 12 to 18 months’ time and the desired future state in three to five years. The Strategic Architecture Approach considers the four business capability areas of people, process, information and technology (PPIT) and needs to be based on a sound Business Capability Model. Each of the levels on the maturity model need to have values for each of these capability areas.

With the people capability, maturity can be mainly assessed based on digital literacy levels, going from no digital awareness through to Digital Savvy people implementing innovative services. With the process capability maturity this can go from manual / disjointed processes through to where future digital needs and innovation can be anticipated. Information at its lowest level can include low data integration through to Digital Services dashboards with actionable insights. Technology capability maturity at a low level of maturity can be where there are a large number of bespoke on-premise solutions. This is often the catalyst behind digital business transformation and a high-level of maturity can be represented by digital platforms that optimise delivery.

Creating a roadmap for digital transformation helps to ensure that all stakeholders are on the same page and understand what needs to be done to reach goals. The roadmap developed can follow the PPIT capability approach and the maturity model assessment can provide guidance on potential initiatives. The initiatives on the roadmap need to align to the strategic objectives and achieve the required digital business transformation through sound digital platforms, innovative practices, high digital literacy, and data culture.

Digital transformation requires a sense of urgency if it is to be successful. Organisations should move quickly to take advantage of opportunities and capitalise on market trends. It is key to have quick wins and initial proof of concepts to test and innovate. High priority investment areas need to be targeted first and as a Strategic Architect it is important to ensure ‘everyone keeps their eyes on the prize’ and align to strategic objectives and program vision. Organisations should track the progress of their digital transformation efforts to ensure they are on track and making the desired impact. This will also enable them to identify areas for improvement and refine their strategies accordingly. In one department I started a Digital Business Community of Practice where I collated a Digital Footprint that was continually updated through teams and enabled success to be celebrated and repeated across other business areas.

The key to enabling data to inform decision-making and drive concrete actions is to decide that path that unlocks actionable insights. Instead of drowning in a sea of meaningless numbers, find the right data to analyse, track the right data to analyse, track the right metrics, and communicating insights effectively.

Data-driven decision making is essential for successful digital transformation. Organisations should leverage data and analytics to optimise processes, identify opportunities, and maximize efficiency.

As described in my book: AI and Data Strategy The data layer includes the capture and store of data in an unstructured or structured form. The information layer provides context to the data, metadata classifications are provided to the data, information security is determined, and the lifecycle of the data is documented. In the knowledge layer the information is organised and patterns are defined. It is here that data scientists apply analytics so that dashboards and visualisations can be applied. In the understanding layer patterns are interpreted so that meaning is attached. Real-time information is applied, and factual narratives applies meaning to the statistics that are produced in the analysis. Gaining Insight is the application of that understanding to a useful endeavour. The capacity for experts to combine their knowledge with the resources of Artificial Intelligence (AI) leads to better decisions being made.

AI has revolutionised the way organisations function and is a fundamental tool for digital business transformation. AI technologies have transformed the industry by identifying patterns and predicting outcomes at a scale that is impossible for human analysis. The ability of AI to recognise fluctuations in data and make data-driven decision enables businesses to automate repetitive tasks, increase efficiency, and enhance customer experiences.

Recently I managed the delivery of Robotic Process Automation at a City Council. The process used included the following stages. High-level engagement and project framing with senior management; Feasibility study to identify the best candidates; Consultation with subject matter experts and collecting the right information and then identifying the activities to implement. The solution targeted the finance and accounting process and the benefits included: Onerous tasks automated, zero accounting errors, on- time payment to employees and no manual intervention.

Two main advantages I found with RPA in respect to Digital Business Transformation. One, RPA does not require integration between legacy systems and can enable fast business outcomes. It can be used as a stop gap before implementation of new solutions. The second benefit came when the process owner is fully consulted and understands the benefits and when implemented can target more high value tasks. In this finance example they were able to spend more time on the digital finance replacement project and feel part of the digital program rather than being tied to doing low-value repetitive tasks.

Digital transformation needs to be customer centric to be successful. Companies should focus on understanding their customers' needs and engaging them through various channels such as social media or mobile applications.

HCD is an approach to problem-solving that puts the needs, interests, and capabilities of people at the forefront of the design process. It involves understanding the people who will be using a product or service, their goals, and the context in which they will be using it.

This understanding is used to inform the design of solutions that meet their needs and are intuitive and easy to use.

A HCD approach ensures that you are solving the right problem and producing the right solution by putting people at the centre of the design process. This will ensure the customer is at the centre of everything we do, and that the digital platforms procured can be future proofed to meet the evolving needs of the customer.

In recent work with a government department, undertaking HCD with customer groups was essential to determine the “How Might We” statements for the main use cases of the future platform. These statements then could be aligned to design criteria to apply to the new platforms. This had unexpected results and by coming from the human angle the outcome becomes more aligned to what the customer wants. When you remove the anchor of thinking about the current system or what is perceived to be the new system you better align with what customer’s need. In this recent work ‘customer’s offline requirements” were not considered until the Human Centred Design identified it during the analysis of the field worker persona. Strategic Architecture ensures that the human angle is considered due the holistic nature of the approach.

Digital transformation requires companies to embrace change and create a culture where experimentation is encouraged. Organisations should always be open to new ideas and be willing to take risks to achieve their goals.

The focus on digital platforms is central in the face of digital transformation with the ability to add functionality module when required. Selection of the right platform and ensuring that platform does not overlap with functions being delivered by other platforms and technologies is important.

Change Management needs to be championed by the senior leaders and fostered across the organisation. Cross-functional teams are crucial to obtain the different views across the organisation and there needs to be an openness in operations so there is not friction between project and Business As Usual (BAU) teams.

Change Management is a central part of Strategic architecture and ensures that the strategic objectives and clear vision of the digital business transformation is understood by senior leaders and people in your organisation.

Strategic Architecture plays an important role in driving innovation and if you utilise any of these ten tips it can help you in implementing Digital Business Transformation.

Nigel Schmalkuche is the author of this article and is the managing director of Strategic Architects who provide Management and ICT Consulting Services specialising in Strategic Architecture. For more information, please go to strategicarchitects.com.au #strategicarchitecture #digitaltransformation #humancentreddesign