written by Daniel Lambert

Most large organizations are undergoing major digital transformation that will last for at minimum another 10 years. Successful enterprises will rightfully claim that their organizational transformation never ends and has become a continuous process. Yet, capital and human resources are finite and all initiatives to be delivered should generate a good return on investment. Not every initiative can be done at once. Are we sure that the current list of initiatives is not missing any critical initiatives? Which initiatives should be delivered first? Some should never be done at all? BUT WHICH ONE?

This whitepaper will demonstrate various business and enterprise architecture methods that can allow an organization to answer the four previous questions. These methods include 1- value streams to capabilities cross-mapping to prioritize capabilities, capability to organization cross-mapping to eliminate inefficiencies, capability to applications cross-mapping to eliminate duplications, information concepts to data models to eliminate redundant data, value stages to stakeholders to understand which stakeholders are critical in your organization, and various capability measurement techniques to measure successes or failures.

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The Necessity of Digital Transformation

As indicated by Oliver Bossert and Jürgen Laartz[1] “Most CEOs understand the potential upside of a digital transformation. If they can get it right, their companies can be more efficient, more agile, and better able to deliver innovative products and services to customers and partners through multiple channels. About 70 percent of executives say that over the next three years, they expect digital trends and initiatives to create greater top-line revenues for their businesses, as well as increased profitability.

There are tangible risks associated with these efforts, however. Traditional companies want to behave like start-ups, but they usually don’t have the technology infrastructures or operating models to keep up with companies that have been digital from the start. Their shortcomings can have consequences. Traditional companies undergoing digital transformations may continue to build ever-more-complicated IT systems, deploying new features or patches and fixes on the fly to meet immediate needs without any clear road map or consideration of future IT needs.”

Meredith Whalen[2] goes even further by saying: “Digital transformation is a 10-year process. We predict digital transformation of 75% of enterprises will take until 2027. It is important for an enterprise to keep pace with the major milestones your peers are hitting. If you are like most organizations, you are making progress in your individual digital programs; but you are not making progress on the greater goal – digitally transforming the entire enterprise.”

Yet, it is hard to find literature that explains how to prioritize digital transformation initiatives. Here are various value finding architecture methods that can be used by business architects in setting priorities in their organization’s digital transformation roadmap and initiatives:

  • Value Streams to enabling capabilities cross-mapping to prioritize capabilities,
  • Capability to organization cross-mapping to eliminate inefficiencies,
  • Capability to applications cross-mapping to eliminate duplications,
  • Information concepts to data models to eliminate redundant data,
  • Value stages to participating stakeholders to understand which stakeholders are critical in your organization, and
  • Various capability measurement techniques.

Value Stream to Enabling Capabilities Cross-Mapping

Value Streams create value at each one of its value stages for a triggering stakeholder (a millennial customer in Diagram 1[3] above for example). Value Stages are used to understand which capabilities enable and provide value for a stakeholder. Architects can then link the organization’s application(s) to each one of these enabling capabilities, as described in the “Capability to Applications cross-mapping” section below in this whitepaper. Value Streams are not processes, since they do not include any decision points and do not follow multiple paths, as very well explained by Michael Rosen in this whitepaper entitled “Business Architecture: Processes, Value Streams and Capabilities[4]”. By identifying the value stage(s) and its enabling capabilities that are the most problematic within a value stream, architects will be able to build initiatives and a roadmap to solves these issues.

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Capability to Organization Cross-Mapping

The use of capabilities in business and enterprise architecture is becoming widespread. Organization charts, applications, stakeholders may change frequently over time, but not capabilities. They remain stable despite any turmoil occurring in an organization. Capabilities may be used by many business units or department, but it should be delivered or owned by only one, as shown in Diagram 2[5] above. This diagram shows all the delivered capabilities by each business unit and sub-business unit. Finally, Level 1 and level 2 capabilities should not be orphans either. A capability needs to be delivered or owned by a business unit or a department. Having multiple business units delivering a capability is a signed of inefficiency. Having a level 1 or level 2 capability not being delivered by any business unit is another sign that the capability is not performing to par.

Capability to Applications Cross-Mapping

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Cross-mapping capabilities to its supporting applications and legacy systems is very frequent among enterprise architects. With growth and especially with numerous merger and acquisitions, it is not uncommon to have hundreds of applications supporting the same capability, as shown in Chart 1 above. Often acquired business units will operate mostly in silo after the transaction. This is usually why an organization may end-up with so many applications for one capability. In a digital transformation where an organization wants to maximize its customer lifetime value[6], the organization cannot afford anymore to have its business units work in silo and rationalising and lowering its number of its supporting applications and legacy systems. Usually the capability with the most supporting applications and systems should be part of your priorities.

Information Concepts to Data Models Cross-Mapping

Cross-mapping the organization’s information concepts to its supporting data models is also used somewhat frequently among enterprise architects and yet I have found very little literature about this subject. It’s the same logic as the cross-mapping capabilities to its supporting applications method. In siloed companies, you may find a customer database for each business unit, where the same client will be repeated from one database to another. Consolidating these databases into one master database is crucial in an organization that wants to maximize its customer lifetime value.

Value Stages to Participating Stakeholders Cross-Mapping

There are up to to 11 domains (organization, capabilities, value, strategy, initiatives, assets, information, stakeholders, products, process and requirements) that can be examined and crossmapped for up to 110 crossmap dimensions. Most of these crossmaps do not make sense and should not be examined. It is not the case for the value stages to stakeholders cross-mapping as shown in Diagram 3[7] below. It list the various value stages where a financial institution’s is involved for critical value streams. Undoubtedly some managers are more involved then others in providing value.

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Various Capability Measurement Techniques

Building a Business Architecture model without measuring any of its key elements is a pure waste of time. As indicated by Michael Rosen and myself in an article entitled “Digital Transformation: New Realities Require New Architecture[8]”, “Measurement tables of digital capabilities are an easy way to understand and prioritize the effort required to meet the organizations strategic goals. As shown in Table 1 below, we can quickly compare which capabilities will provide the most value, require the most effort, have the biggest functionality gaps, or the best or worse performance. This information allows to make trade offs, manage dependencies, set expectations, and prioritize the projects needed to implement our Commerce strategy.” Some of these measurement or others may also apply to other domains of the business architecture model of an organization and enable its architects to further prioritize which initiatives should be included in their roadmap.

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Conclusion

This whitepaper has put some light on how to answer which one of your numerous initiatives should be delivered first and which one should not make it into your priority’s list by demonstrating six business and enterprise architecture methods. It goes without saying that none of these methods exclude the usual return on investment techniques before setting any roadmap in stone. The initiatives with the highest return on investment should most probably be dealt with among the first.

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[1] Source: this article entitled “How Enterprise Architects Can Help Ensure Success with Digital Transformations” written by Oliver Bossert and Jürgen Laartz from McKinsey & Co on August 2016.
[2] Source: Article entitled “5 Things that Are Dragging Down your Digital Transformation” written by Meredith Whalen in CIO.com on November 16, 2017.
[3] Diagram 1 is one of 18 value streams with enabling capabilities offered in the IRIS Business Architect Financial Services Framework.
[4] Article entitled “Business Architecture: Processes, Value Streams and Capabilities” written by Michael Rosen in BPTrends in December 2012.
[5] Diagram 2 is one of over 160 diagrams offered in the IRIS Business Architect Financial Services Framework.
[6] For additional information, read this whitepaper entitled “Enabling Customer Driven Innovations Using Business Architecture” written by Daniel Lambert.
[7] Diagram 3 is one of over 160 diagrams offered in the IRIS Business Architect Financial Services Framework.
[8] Whitepaper entitled “Digital Transformation: New Realities Require New Architecture” written by Michael Rosen and Daniel Lambert.