“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.
EA talent is hard to find. They must be comfortable with both business strategy and with the digital technologies necessary to implement the strategies. To better understand the key role played by EA teams in their companies, McKinsey conducted a survey that received over 150 responses from a variety of countries and industries. Respondents who described their companies as “digital leaders” said that EA teams add value by following several best practices, including:
Engage top executives in key decisions. The most effective EA teams invest their time in understanding their company’s business needs. 60% of enterprise architects at companies considered digital leaders said they interacted most with C-suite executives and strategy departments, compared with just 24% of those in other companies. Digital transformations are more likely to succeed when a company’s senior leaders understand the impact of technology on the business “and commit their time to making decisions that seem technical but ultimately influence the success or failure of the company’s business aims.”
Emphasize strategic planning. EA teams at digital leading companies have a strong orientation toward the future. 100% of these teams said that they continually develop and update models of their firms’ business and IT architectures compared to 58% of EA teams from other companies. “Teams that spend more capacity than average on strategic planning were more likely to report delivering sustainable business solutions, making greater contributions to the benefits of projects, and gaining wider recognition within the enterprise.”
Focus on business outcomes. Digital transformation puts a premium on the close collaboration between business and IT functions. The survey found that the contributions of EA teams for business-process benefits at digital leaders were rated “high” or “very high” by 60% of respondents, compared to 37% to those of teams from other companies; while the contributions for IT benefits were rated “high” or “very high” by 90% of respondents from digital leaders compared to 63% from all others.
Post-pandemic, EA teams have an even more important role to play. Covid-19 significantly accelerated the digital transformations that companies had to make to help them cope with the crisis, forcing companies to shortcut normal IT protocols to get digital solutions in place in record time, sometimes literally in days and weeks. While this enabled them to deal with the immediate crisis, it created a so-called technical debt, meaning that their system solutions aren’t as robust, flexible and scalable as normal IT solutions should be. Many organizations have been confronting how to now integrate these fragmented and often makeshift digitalization efforts.
A recent McKinsey article, published in July of 2021, noted that the demands on EA teams are changing rapidly given the increase importance of digital operations, applications, and business models. The article argued that in this post-pandemic digital-first environment, the objectives of the EA teams should evolve in three key ways:
Enable strategic decisions. “Setting strategic direction has always been an important EA task, but with many companies becoming increasingly digital, it has become [an even more important] business-level priority. In the past, major failures affected only the IT budget. Now, they affect the entire business.” Pre-pandemic, for example, a retail application that didn’t scale well due to architectural flaws would have led primarily to increased IT costs. But post-pandemic, as a major portion of retail sales have now moved to online channels, the same architectural flaws would lead to substantial lost sales. “[D]igitally advanced companies create a plan for the future and engage enterprise architects to figure out a system that can enable it.”
Ensure reusability. “In the past, ensuring reusability was mainly a cost consideration, which meant development was generally treated as a one-off.” Functions that were developed quickly, - as so many companies were forced to do to cope with the immediate crisis, - often became permanent and led to greater technical debt.
“EA plays a crucial role in avoiding such outcomes by ensuring that new solutions reuse established functionality. This not only avoids wasting time on reinventing the wheel but also helps ensure a consistent customer experience. Architects should facilitate the discussion between product teams around features and solutions, make it easy to find all features available for reuse, and ensure close alignment with the strategy.”
Enable development speed. “The flexibility and responsiveness of a digital business are severely hampered if those traits aren’t also reflected in the tech foundation layer. This means that enterprise architects need to manage a consistent technology stack that comes as a ‘batteries included,’ ready-to-use platform for new development teams. EA can deliver on this by providing two things: all the technology components that teams need to develop, deploy, and test new functionalities, and a curated set of ‘patterns’ - best practices on how to store data, integrate with other teams, and perform other common tasks in the everyday life of a product team.”
Enterprise architects now have to operate quite differently that they did just three years ago, helping IT deliver value and engineering excellence to the business, and ensuring that proposed changes are practical, adds the article in conclusion. They need to develop a customer-oriented mindset by supporting colleagues in finding solutions for what they want to achieve, as well as providing guidelines, training support and other relevant documentation as part of the overall systems deployment process.[“B]y both embracing EA’s role and evolving its skills, companies can make it the bedrock of their tech transformation.”
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