Digital Transformation is misunderstood. It is not modernization. It is not always changing what a business does. At its core digital transformation defines a new division of work. It derives power from an optimized separation of duties that takes advantage of the internal expertise of all assets (people, technology).
eGovernment is an example. Government still processes transactions, but how they are processed has transformed. The agency for which I worked once had 200 data entry people to key 10M annual returns (all arriving in a 3 month window). We has another 200 people seasonally hired to open mail, prep for data entry, cash checks, etc. With the advent of e-file, constituents essentially became our data entry. The constituent was empowered to "contribute" that which they understood best (their information). With this simple change in the division of work, the agency had taken the first step in transforming to digital.
Transformation doesn't change the business being done. It does enable business innovation through "on ramps" to the emerging digital enterprise.
The new division of work often includes automation, workflow engines, and AI agents. Beyond technology, transformation is about empowerment and establishing new relationships between business and the technology they use.
Change is hard for people. It challenges their preference for certainty and they feel a loss of control. This is clearly evident in any enterprise undergoing transformation.
Fear of change is not felt evenly within the organization. Executives are usually advocates for change. They know the enterprise has to adapt to a changing world and new challengers. Something is going to have to change.
The line worker has a different view. Although there is the fear of their job going away, the job itself is still based on tasks. Just tell me what to do and I'll do it. The way they do their work may change, but the nature of the job is the same.
The group most challenged by change is the "hard middle". These employees value their ability to manage people to get the work done. They value their expertise and deep business knowledge. They look at change as challenging those core values. Continual engagement does not always result in their buy-in. The key to transformation is empowering the hard middle. By giving the hard middle capabilities to monitor and manage work, the hard middle can be converted from the organization's transformation's greatest road block to its greatest advocates. The result is to give them ways to use their expertise to contribute more value. The results will be clear and visible. The hard middle has to become the change agents for the new operating model.
One major challenge in transformation is aligning with Enterprise goals.
One technique to handle this is through the establishment of fusion teams. "Fusion teams are multidisciplinary groups that blend technology, analytics, and domain expertise to accelerate the delivery of digital products and services." Fusion teams are not new. They have been around at least 25 years. Fusion teams can be very successful, but their long term success depends on aligning their solutions into a repeatable operating model and architecture.
This is where the Center of Excellence (COE)/Communities of Practice (COP) model excels. Fusion teams facilitate coming to a solution. The ultimate goal isn't to solve a problem, but to set up a framework to repeatedly solve problems. This is where the COE comes in. They are experts at products/technolgies. Their objective is to establish patterns of integration, usage,s and innovation. In the Right Strategy, the COE is often in the shared service products (In the EA Diagram - Integrated Services, BI Services, Integrated Application Services, and BPM Automation Services). The COE are experts on leveraging the technology and exposing capabilities. The serve the standardization function in the Investigate - Standardize -Optimize pillar. Their goal is to make the new capability repeatable, supportable, and consumable.
The Communities of Practice are the business (including IT) consumers of the capabilities developed. This is the optimization step. Building easy to use patterns of consumption that result in faster delivery and consistent performance. The COPs are empowered. As long as they follow the COE patterns, delivery is streamlined. The COPs expose expertise from across the Enterprise.
The use of Fusion Teams/COE/COP establish a new, dynamic integration of technology to support the business. It creates an Digital Factory where all Enterprise assets (technology, business knowledge, etc,) can be aligned for success.
Empowerment is the key to unleashing the power of the organization. An industry pattern for many years has been configuration. With established patterns, the entire customization of a solution can be done through configuration. An example is an eCommerce product. These products are developed to allow the business to configure it as they need. They can simply add/modify products, bundle products, do customer outreach and experience, etc. These are out of the box because all commerce sites essentially do the same thing. When you have a pattern to support, after it is standardized, it can be optimized to support configuration.
The Right Strategy is the more common pattern. It is all about consumption of technology. It is the underlying truth of technology that mirrors differential calculus. It is the single point of change, where technology is used. Technology is only of value when used. It can only be used either by a person, a technological agent (AI bots, IoT), or a process. The first two are handled by a tool. The best example is BABE. It allowed the business to create tools to solve problems. They configured the tools, tied them to work lists, and established success criteria all through configuration and without IT involvement.
Configuration changes the SDLC. There is a new entry ramp to production. The business can move and test their changes independently, and once they meet the gates established, can promote to production. Governance is integrated into the SDLC.
When the partners are not internal to the organization, optimized integration patterns are critical. At its technical core is something like IPaaS (Integration Platform as a Service), but its consumption model may be closer to BAaaS (Business Assets as a Service). BAaaS is the optimization of IPaaS (standardization).
There is a future where all consumers are partners. It is an expansion of the Hackathon model, where consumers (individuals, AI agents) can safely, securely leverage many different enterprises' capabilities into unique tools. The basis for this is within an optimized IPaaS, the security model was based on consumer owned credentials (like ATLaaS). The tool instantiation has unique content in the consumer.
Democratization is another expansion on the SDLC. The acquisition policy enforces the governance around the capability. It may include approvals, testing, service levels, costs, etc.
The consumer becomes the focus of all consumption. All required capabilities come to them, rather than them having to endlessly search for them. In this world, the best, most consumable capabilities win. Advantage can be taken or lost in real time. No enterprise can ignore the opportunity.
Democratization can be achieved by expanding building on the enterprise's empowerment initiatives.
Empowerment, and the ever expanding leveraging of assets, changes the way IT gets discussed. It changes from discussing very big problems (replacing large systems, engaging new technology) to the instance of usage.
Could you perform brain surgery if you had the right tool? Every question becomes "what is the right tool for that and how do we acquire and incorporate those capabilities"? The only technical assets that make an organization unique are their information, rules, and processes.
The Right Strategy is a new way of thinking of IT. The focus is on usable tools in a business context. Technology, data and other capabilities support the tool in meeting its objectives. It is therefore the antithesis of how systems have historically been built.
You see this every day. Every time you signon to a system, you are entering another silo. If you think of it as a physical silo, it may be even easier to understand. For a single instance of work, you start by doing something in Building A (after having passed security). The next step in the process requires to do something in Building B. You walk over there and pass security (signon to another system). You keep walking through building after building trying to get something done. It gets worse if you only go to a building occasionally. You may forget what you need to get into the building (like your user id or password), or you might forget how to get to where you want to go.
After doing this a while and with continual use, you may actually get another building to trust you based on your primary building's credential (federation).
The Right Strategy is a sharing paradigm. The work we need to do in the other buildings are not only brought to us, but in a context that the outcome mandates.
If creating buildings is not the right metaphor, then what is? Virtual buildings? No, It is more like building a cruise ship. A ship that can navigate the new digital age. Something that is in motion and can take the business to where it needs to go. This metaphor helps to define a new optimized division of work in the IT delivery model.
Along those lines it is better to think of the stakeholders in the digital world as we think of the relationship between parties in the cruise boat industry. There is the ship building company who is responsible for building the features and functions of the boat (this is the IT shop), there are their suppliers who offer the components of the boat for the suppliers (IT vendors), there is the crew who steers and operates the boat (the business) and there are the passengers/clients (customers).
In the new metaphor, the vendors are the suppliers. They offer capabilities. They may do this either in product sets (collection of capabilities) or as individual capabilities. These are the building blocks for IT. Traditional IT vendors offered products that were bundled with constraints. These constraints were to make the product more functional. Each product had a user interface to make it easier to use. Security was built into each product. The vendor kept adding to the product so that customers didn't have to purchase or integrate with other products. Products became silos. Training was required for every product. Not just for functionality, but for specialized navigation and administration. If vendors had made assumptions (or dependencies) of how their products would be integrated by an enterprise, they immediately limited their audience. Vendors didn’t intentionally build in these lock-ins. It was a by-product. The more a customer took advantage of these “bundled features” the harder it was to get out of the product.
Today products are moving to an API (capability) based offerings. Vendor products still have specific administrative UIs, but these UIs consume functionality through APIs which allow for other consumption models. Security is still bundled in a lock-in fashion. Building Right Strategy tools breaks down this last silo, by leveraging capabilities based on consumption not platform.
IT becomes the shipbuilders. They take certain capabilities and prepare and package them for the business to use. They create combined components (power and steerage) that the business is then empowered to use to accomplish their goals (expanded BusOps) and steer the ship. The business defines the capabilities and even some of their usages. It is the ship builders’ job to make them available and easy to use.
The crew is the business. The crew accepts the ship builder as the primary deliverer of features. There may be other direct supplier relationships (SaaS solutions, in the ship building metaphor something like branding or Wifi). However, someone is still responsible for integrating these into achieving outcomes. The goal of the ship builder is to empower the crew to successfully use the ship to meet business goals. Navigating is the best example. Once delivered to business, why would the ship builder be involved (unless there are issues)? However, it does bring up a potential conflict. Who is responsible for running the engine room? Is it the business? Is it IT? Or is it a combination like on a ship? Many of the functions in the engine room are handled by the engine crew? However deep maintenance or issues would require support from the ship builder and/or supplier. The digital age is evolution, and some of these responsibilities change with maturity.
The passengers are the business customers. It is often best to offer many services to the customer and let them pick their experiences. This is self-service in IT.
By preparing to sail, we change the basic IT and business dynamic. IT empowers the business with ways of being successful without vendors or IT trying to tell them how. The division of work empowers stakeholders to deliver on their core values. In this mode, all stakeholders are consumers of technology. More importantly, if tool configuration can be optimized, then all stakeholders can be a deliverer of business success. That is the goal.
The Right Strategy is building something different. It therefore needs new techniques and guidelines to assist in delivering the Right Strategy. Next we will discuss some of the enabling techniques that facilitate Right Strategy decision making.
For example, database is a product. Product security would be used to make you a DataBase Administrator. This gives you access to a whole bundle of database capabilities. The product UI would be a console of some sort. The Right Strategy would counter the argument saying that instead of getting a a toolkit (administrative console), you need a more specific tool to fix a certain type of database issue. There would be ticket to rebuild an index and that ticket would give you a tool to rebuild the specific index based on data in the ticket. No one gets DataBase Administrator rights. A user only gets rights to rebuild an index only if there is a ticket. The ticket is the right time, the fact that you got it assigned is the right consumer, and what you can do in that context is the right tool. The tool is a combination of capabilities needed to resolve the issue (rebuild index). The tool may have other capabilities embedded (what is the right tool for this ticket?). Security is based on getting the tool, not in the database product. Tooling resolves product security lock-in issues.
The Right Strategy evolved from a major transformation project. The tool builder developed was not designed for the business. It was our attempt to meet changing business requirements, by being able to quickly configure what the business needed. It was intended to be a tool for business analysts in IT. When the business saw the tool builder, they wanted it for themselves. Since the tool builder was integrated in the SDLC, it was easily turned over to business. At first the middle managers hated the idea of transformation ("the hard middle"). Once they had the tool, they became the important advocates.
From my perspective as an IT leader, the business had just taken over about 40% of my development and support work. This allowed us to be more innovative in using new technologies and capabilities.
It enhanced the value of IT to such an extent that our commissioner referred to the enterprise as an IT company doing government. Truly a transformational view.