#7 — EA leaders of the future
In the last article — “#6 — The Enterprise Architect” — I discussed the role of the Enterprise Architect (EA) and how the EA can be relevant and truly involved in the Digital Transformation journey that most companies are facing today. Some traits and general characteristica a modern EA should hold was defined but I also touched upon the fact that leaders in the organization needs to acknowledge the skillset of the EA:s, listen to them and trust that they actually understand the business.
This scenario puts the leadership skills to a test — as we must be not only the EA experts but also people- and business leaders within the organization. The trend with all these new business models that tie together customers, services and experiences, isn’t possible without business architecture to help design and shape the execution. Business architects / EA:s will need to work closely with business teams, so much so that by 2022, as much as 80% of them (according to — for example — CXOToday , https://www.cxotoday.com) will most likely work directly for a business leader. This will position EA as a internal management consultancy, where it is is more about using the ubiquitous data for decision making purposes, instead of spending most of the time gathering the data. So the real contribution of Enterprise Architects will more and more be orchestrating collaboration, showing leaderships skills in their ability to consult, coach and mentor, and hence drive business outcomes.
Digitized or Digital
In the excellent book “Designed for Digital” the authors (Jeanne W. Ross, Cynthia M. Beath and Martin Mocker) make a great point in first separating the two notions “Digitized” and “Digital”.
Digitization involves standardizing business processes. It is associated with cost cutting and operational excellence (i e strongly connected to the exploitational part in a ambidextrous organization — see “#5 — Innovation and Organizational Setup”). In essence, digitization imposes discipline on business processes that over the years were executed by individual heroes in the organization, in a variety of creative (but not always optimal) ways. SAP, PeopleSoft, Salesforce and other integrated software packages that burst onto the scene in the late 1990s or beginning of 2000 — helped lead the way to more digitizing. Digitization was a painful process in the 1990s, and for companies that have not yet been able to standardize core processes, it is still an ongoing struggle.
Because they are still in the torment of building and learning to use their operational backbones, many business leaders are not distinguishing their transformation to become digitized from the present need to become digital. They are assuming that to become digital, they must simply use digital technologies to become more digitized.
But “becoming digital” is a totally different exercise from digitizing. Although digitization is an important enabler of digital — and digital technologies can certainly support operational excellence — all the digitization in the world won’t on its own make a business a digital company. Becoming digital involves a very different kind of transformation.
Being Digital means that they enable not just an opportunity to improve operations, but entirely new value propositions. A digital company innovates to deliver enhanced products, services, and customer engagement.
To become digital, leaders must articulate a visionary digital value proposition. This value proposition conveys how digital technologies and information can enhance the company’s existing assets and capabilities to create new customer value. Being digital is taking advantage of the opportunity to innovate and redefine a business — and possibly even an industry, not just introducing for example mobile apps for customers.
Successful companies in the digital economy will be both digital — to provide customer value — and digitized — to provide scale and efficiency. Although companies still struggle to digitize (MIT CISR research has found that only 28% of established companies have a value-adding operational backbone), what that means and how to do it are now well established. In the book (Designed for Digital) the authors have highlighted the contrasts between the two types of transformations in figure 1.
So, one could argue that defining a digital value proposition that offers solutions that customers are willing to pay for — is more art than science.
If a company has a strong operational backbone, the company’s IT unit can help with development of the digital offerings platform (digital platform) and ensure that this new platform integrates as needed with the operational backbone. If the company is still learning to digitize, though, the IT unit may be consumed with digitization initiatives. In this case, a separate business unit — as I also discussed in “#5 — Innovation and Organizational Setup “— can oversee initial experiments around digital offerings to identify what services might be of interest to customers.
Like digital start-ups, companies with a weak operational backbone can then offer new digital services. But if offerings find a market, these companies will need to quickly implement key elements of an operational backbone to enable scaling up the new business. They will also need to architect a platform for their new digital offerings, or they will find that the early burst of innovation will stall when they attempt to integrate services in ways their customers have come to expect.
Leading and Architecting the Digital
So bottom-line is that the role of the EA is increasingly relevant. Both when it comes to digitizing, architecting and enhancing the operational backbone, but even more so when it comes to “being Digital” — where their ability to see the end-to-end picture — understanding the backbone, current business and the breakdown of information capabilities — will make them an important piece in the puzzle.
So being an essential internal management consultant / advisor — the EA need to help with the critical leadership responsibilities:
- Leaders must provide direction — meaning that they need to define the “main things”, setting the course and engaging others in it. So for a successful EA it is not enough to identify the key technology priorities BUT also putting these priorities in a business context so people know and understand why they are important and how they will be achieved,
- Allocate resources — This is of course so much easier to do when the current situation is understood and the direction is set. When the leaders have a hard time allocating resources it may be because that the direction is not clearly defined. Allocating resources is all about making sure that your resources are aligned with your “main things” and not with other less important activities. Developing the skills to make important choices about how to use your resources is critical to effective leadership.
- Build capability — i e development of both the individual and the organization as a whole. At the individual level the EA will seek to develop their own skills and capabilities as well as the skills of other architects. At an organizational level the EA will look to close any capability gap that limits the ability to execute against the strategic direction of being digital. To carry out this the EA will need to develop both technology and people assessment skills (coaching etc).
- Have a clear understanding of the current situation — by developing a clear sense of where you stand (the as-is if you wish). Through the current states analysis process the EA can develop critical leadership skills. These skills might include analytical thinking, measurement techniques and the development of tools for identifying and engaging with key stakeholders.
Many times the organizations leaders only provide structure for the organizational setup, which is far from what is needed when faced with competitive disruptions and new business models. This and the fact that they are not playing the infinite game (see “#1 — The Infinite game”) often means that they lack understanding of the current situation and that will inevitably make them lack the means of defining the “main things”. Which also means that they cannot live up to the critical leadership responsibilities in today's business. They will need to rely on other leaders within the organization — such as EA:s, Business Architects and others — to help the Design the Business moving forward.
This all adds up to the fact that the EA:s will more and more take on leadership when building for the future. This is also why I find the term Enterprise Architect somewhat misplaced in today's Business. The name will for most Business people point towards IT and the architecture of the backbone, which makes the EA:s less relevant in a digital transformation journey. They are looked upon as gate-keepers and ivory tower theoreticians.
So in the next article — I will discuss some suggestions what the title and the role of the EA could eventually become — #8 — To be, or not to bEA …
