Enterprise architecture is no longer just about technology assets. It is also about business capabilities, application data flows, and customer experiences.
Business transformation projects are critical for success, yet often fail. A suitable enterprise architecture (EA) strategy backed up with appropriate tools can help overcome obstacles, deliver insights as a project progresses, and shape a future path.
RTInsights recently spoke with André Christ, Co-Founder and CEO, LeanIX, about these and other EA/business transformation issues. Here is a summary of our conversation.
Business transformation management’s impact on enterprise architecture strategy
RTInsights: How does business transformation management affect organizations’ enterprise architecture strategy?
Christ: The industry is seeing a lot of digital and business transformation projects. And there are many different types of transformation—for example, cloud transformation and big ERP transformations with the shift to the new SAP S/4HANA. We also see companies upgrading their employee experience. And there are other transformations as the result of mergers and acquisitions, or the need to get rid of legacy technology, transforming to microservices, as an example.
However, when we look at the research, for example, by consultants like McKinsey, they see that 70% of the transformation projects are failing. That’s quite alarming.
So, there are different kinds of those transformation projects going on, and many of them get stuck or fail while they’re being executed.
These projects fail because [companies] don’t have a good enough visibility into dependencies and constraints of the architecture as they plan out their transformation. Many organizations just jump into a project, but they haven’t created a solid baseline. And they haven’t made a good plan. They do not understand how their architecture will evolve over time. They do not look at different scenarios and make comparisons. If you don’t have that, it’s hard to execute your transformation because you have no way to measure success. They just go into it. And if things change and evolve, then you have no way to track back how well your progress is.
With that in mind, what we see right now is that the enterprise architects help the organization lay out a plan. What are the business objectives the company wants to reach with the transformation? How does that break down into the bigger transformation building blocks you need to put in place? What are the dependencies? From there, break it down into, what are the impacts on the architecture? Taking that approach and connecting it to tangible business objectives, you have a very business outcome-driven approach to managing such transformation projects.
The role of transparency in digital transformation
RTInsights: Why is transparency of the IT infrastructure so important when supporting digital transformation?
Christ: If you look at most organizations, what we’re seeing is usually they have not only hundreds but thousands of applications in place. And what you also see is that a business transformation project is no longer an activity that happens in one specific area of an organization. Instead, it spans across the whole organization.
If you don’t have visibility on your existing application landscape, the ownership by the different business areas, and the experts on the IT side, what happens is you have a lot of friction. Along the way, you need to figure out who you need to talk to, who needs to make decisions, who can give a judgment if something goes wrong. That’s why the visibility and transparency into the current state are so important when running those projects. You need visibility and transparency because of the sheer complexity of the landscapes some organizations have.
Using a business outcome-driven approach to accelerate digital initiatives
RTInsights: How can a business outcome-driven approach to EA help accelerate companies’ digital initiatives?
Christ: You can separate it in three steps. The first one is the organization needs to be clear on what business outcome they want to achieve. For example, they want a faster time to market. They want higher usability with their tools. They want to use different channels to reach their customers. What they do is they come up with those business outcomes, make them measurable, and then put them in as a starting point for their architectural strategy.
You then break that down and connect those business outcomes to business capabilities and link it to the projects that are currently running. That way, you always have a trace back from changing a business capability in a corporation. For example, you may elevate your data science capabilities or increase your capabilities in a multichannel customer approach. You can track back with the initiatives you’re doing in IT and how well those changes align with the business outcomes you’ve defined previously.
Enterprise architects help with the right tools that the executives can take proper business decisions from the reports that have been generated. Using tools like LeanIX as an enterprise architecture tool provides a single source of truth for the business outcomes, business capabilities, applications, and all the way down to the technology. Having that single source of truth helps executives, architects, and application owners make the right decisions.
We hear from many of our EA customers that the reports they use to make decisions or recommendations are based on the data and on the knowledge of many, many people in the organization. With that single source of truth, you make sure that the data is not only in different people’s hands, but it is accessible for the entire company. And turning that data into actions and decisions is what we call an actionable enterprise architecture. So, it’s not only analyzing the as-is and planning the to-be but also turning the data into decisions and actions.
Change management issues and your EA strategy for business transformation
RTInsights: What are the critical change management issues that companies need to address proactively when deploying an EA strategy that supports business transformation?
Christ: There are a couple of changes currently going on, and I talked you through some examples. The first one is the change from a project to product-based thinking in an organization. The second is becoming agile and embracing a DevOps culture. The third is managing and steering the company according to objectives and key results to make the direction more measurable. The last one is all-about leadership. Transparent and collaborative leadership is what companies are driving forward. These are the big changes we’re currently perceiving, which are happening along with those big transformation projects.
Let’s go deeper into the first one for a moment. What we’ve seen in the past, especially in IT projects, is that you have a waterfall approach. You come up with requirements, you develop that into a system architecture, and then implement it in a long-running project. What is different in the product-based thinking is that you first come up with a minimal viable product, so the smallest set of functionalities, which are applicable to solve a customer’s problem. You then frequently talk to the customer to evolve your product and improve it over time. So, you have a lot of iteration circles.
This approach represents a big change in the way enterprise architecture is done today. You no longer can come up with a high level, big plan of your architecture. You need to be involved very frequently in product development. So, enterprise architecture and product teams are getting closer to each other. And what helps them is having a modern toolset that fosters collaboration and allows you to connect the architecture to KPIs and measurements to track the success over time.
Zooming out from this project-oriented to product-centric change, these are areas that help organizations drive forward a business transformation program.
Shaping the future with the right EA strategy
RTInsights: How can the right EA strategy help a business shape the future?
Christ: When I spoke to a couple of architects recently, the common theme I heard is that architecture is no longer just talking about technology assets. It is also talking about business capabilities, application data flows, and it goes all the way to thinking about customer experiences and customer journeys. So, architecture goes across those three areas.
I think it is still critical today because many organizations are currently doubling down on, for example, a cloud transformation journey or modernizing their existing IT landscape and shifting it into a microservice architecture. Architects can help to translate in all those three areas. So not only on the technology level but also on the business capability level, and on the customer journey level. They can explore what the benefits of, for example, a cloud transformation and a migration to microservices are. And they can help the organization navigate through this.
Breaking down how an enterprise architect can help the organization, the first step is to identify the needs. Understanding the as-is architecture and requirements to come up with to get to the target state. The second step is planning out scenarios. We see and hear today that changes must happen on the level of three to 12 months, rather than one to three years, like it has been done in the past. Those scenarios are more focused on ensuring that the execution of transformations goes well.
And based on that, you can come up with different roadmap views. One area where we help our clients is to model out those changes, or to model out those different scenarios, and then to be able to jump at a certain point in time in the future and look at it. It’s similar to looking at your architecture in a time machine, where you can select a point in time and then see how the architecture has evolved to that point. This is what some of the newer ways of road-mapping can help you with. You can not only see the different projects going on over time, but you can project what the architecture looks like at a certain point in time. And then you can compare it between the different scenarios.
There are a lot of benefits of visualizing and communicating those different states. And that’s why we sometimes say our analogy to leveraging something like a time machine is a very efficient way to align different stakeholders on what should be the target state of the architecture. That’s in contrast to building a very complicated set of roadmaps, which can sometimes be very, very static. This is how I see that the right EA strategy can help the business to shape the future.
Read the other article in this series:
