Irving Wladawsky-Berger

The Evolution of Enterprise Architecture in an Increasingly Digital World

“What does it take for traditional companies to create value with digital technology?,” asked a McKinsey article published in November of 2018. Based on its research, the article suggested that “successful digital reinventors - digital natives and digitally transformed incumbents - employ a range of approaches, such as investing boldly and adopting cutting-edge technologies at scale.” However, the article warned, such efforts can run into serious difficulties. “In our experience, a push to launch more digital applications can make a company’s technology landscape increasingly complex and difficult to manage, to the point that it impedes transformation programs.”

A few months ago, I wrote about the evolving role of the CIO, based on a survey of over 500 CIOs and related technology leaders. Almost all of the surveyed CIOs agreed that their responsibilities will become more strategic in the coming years, uniting their company’s business and technology strategies and managing increasingly complex and difficult digital transformations.

This strategic role of the CIO is in turn driving the evolution of their enterprise-architecture (EA) teams. Traditionally, enterprise architects have been responsible for translating business needs into IT requirements. A major part of their job is making sure that their company’s IT systems work together to  enable and support the company’s overall digital strategy. And increasingly, EA teams have the primary responsibility for managing the technological complexity inherent in digital transformations.

How to Effectively Manage a Company’s Digital Transformation

The adoption of new digital technologies in response to the pandemic has reached levels that weren’t expected for many year, - and those changes are likely be long lasting. A few months ago, for example, a McKinsey survey of global executives found that the pandemic has accelerated the digitization of their customer and supply-chain interactions, their internal operation, and the share of digitally-enabled products and services in their portfolios by roughly three to four years.

“Faced with the pandemic, firms did things that once seemed impossible - sometimes overnight,” noted Forrester Research in an online event that took place earlier this year. “Under the relentless pressure of new customer realities, the future came into focus: The value of your company depends on how customer-obsessed, resilient, creative, and adaptive you are in jumping to the next growth curve in your industry. … 2021 will be the year that every company - not just the 15% of firms that were already digitally savvy - doubles down on technology-fueled experiences, operations, products, and ecosystems.”

But, what should the vast majority of less digitally savvy companies do to embrace the changes they were forced to make in record time to deal with the immediate crisis? How to Speed Up Your Digital Transformation, a recent Harvard Business Review article by Benjamin Mueller and Jens Lauterbach, provides some answers to this question.

“The pandemic has given many organizations an unexpected crash course in digitalization,” wrote the authors. “While much progress has been made - from hardware and infrastructure to updated work processes and a rejuvenated corporate culture - many organizations are confronting the question of how to integrate fragmented and often makeshift digitalization efforts in a way that’s sustainable. … This is particularly pertinent for small and medium-sized organizations that need to be more targeted in their efforts and may not have the resources to engage in the ‘fail fast’ approach often heralded by the larger poster children of the digitalization movement.”

How Has Working from Home Worked Out So Far?

“COVID-19 triggered a mass social experiment in working from home (WFH),” said economists Jose Maria Barrero, Nicholas Bloom, and Stephen J. Davis in Why Working from Home Will Stick, a paper published in April of 2021 by the National Bureau of Economics Research (NBER). “Americans, for example, supplied roughly half of paid workhours from home between April and December 2020, as compared to five percent before the pandemic. This seismic shift in working arrangements has attracted no shortage of opinions about whether WFH will stick.”

Working from home (WFH) has been around for decades, modestly growing in the 1990s with the rise of the Internet. The share of WFH three or more days per week was under 1% in 1980, 2.4% in 2010, and 4.0% in 2018. Then came Covid-19, forcing tens of millions around the world to work from home and triggering a mass workplace experiment that broke through the technological and cultural barriers that had prevented its adoption in the past.

To investigate whether WFH will stick, the authors of the NBER paper devised a survey that asked questions about working arrangements and personal experiences with WFH during the pandemic, as well as worker preferences and employer plans after the pandemic ends. The survey was conducted monthly between May 2020 and March 2021, by which time it had collected 28,597 valid responses from 20-64 years old US workers, of which 43.8% were female. The typical respondent was 40 to 50 years old, with one to three years of college, who earned $40 to $50 thousand in 2019.

Let me discuss a few of the survey’s questions and findings.

Which Colleges and College Programs Give Students the Best Bang for their Buck?

“The decision not to attend college for fear that it’s a bad deal is among the most economically irrational decisions anybody could make in 2014,” wrote NY Times journalist David Leonhardt in Is College Worth It? in May of 2014. “Over the long run, college is cheaper than free,” he added, citing an article by MIT economist David Autor which pointed out that a college-educated worker can expect an additional lifetime earning of over $500,000 compared to one whose highest degree is a high school diploma. Experts and journalists questioning the value of a college education are most likely obsessing to get their toddlers into an elite nursery school, so they are on-track for the right schools over the ensuing 20 years, added Leonhardt.

In May, 2019 seminar I attended, Autor noted that over the last four decades, the US and other industrial economies have seen a remarkable rise in wage inequality by educational attainment, with the earnings of the most-educated increasing, and the earnings of the least-educated falling in real terms. Since the 1980s, the earnings of those with a four year college degree have risen by 40% to 60%, while the earnings of those with a high school education or less have fallen among men and barely changed among women.

Every year, the US Bureau of Labor Statistics publishes a set of earning projections by educational attainment. Their 2020 projections showed that the median weekly earnings for all workers is $1,029; for those with less than a high school degree it is $619; high school diploma - $781; some college, no degree - $877; associate’s degree - $938; bachelor’s degree - $1,305; master’s degree - $1,545; doctoral degree - $1,885; and professional degree - $1,893.

Beyond these aggregate numbers, which institutions of higher education give students the best economic returns, that is, the best bang for their buck. In April of 2020, Third Way, a public policy think tank, published a report that introduced a new approach for estimating the economic return of an education, - that is, the Price-to-Earnings Premium (PEP), - based on the amount of time it generally takes a student to recoup the cost of obtaining a credential at a particular school.