A Reference Architecture for Digital Transformation
A Reference Architecture for Digital Transformation
Read about the four main software and network capabilities required to achieve digital transformation in a modern business.
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Digital transformation is as real as global warming. It is as real as Donald Trump becoming the U.S. president. It is real, but you might not have taken it seriously. According to a recent survey done by Gartner, 42% of CEOs are taking actions to align their organizations with digital transformation.
What Is Digital Transformation?
DT (Digital Transformation) is making your organizations assets (physical, intellectual) digitally accessible to fulfill your business requirements through engagement of technology. It is not only for internet companies like Google, Facebook, Apple, Amazon, or Microsoft. They have already transformed. The challenge is for organizations which are not high-tech. Think about transportation, logistics, pharmaceuticals, real estate. These industries didn’t have many technology requirements in the past. But this is not the case anymore.
We have come through different technological advancements. In the industrial age, machines were the main focal point. Then came the age of transportation and aviation where people focused on large aircrafts, automobiles, ships, and international trade. With the invention of the personal computer (PC), the focus was shifted towards computing. The internet was born and information sharing has become the focal point. Then came the world of digital technology where people started controlling other people and objects through their mobile or handheld device. The world has come to the fingertips of the people. The advancement of digital technology allowed people to consume goods and services from their fingertips. Bricks and Mortar shops are no longer popular. Amazon, eBay, and Alibaba have changed the way people do shopping.
The power of business has shifted from the producer to consumer. Consumers don’t care about the status quo or your history. What they care about is how easily your products and services can be accessed and how quickly you can deliver. They want to see your products from their home.
Early Adopters of DT
There are some organizations which have started just 5 years back and now controlling the entire world through their technological capabilities. Some of them are:
- Airbnb (Largest hospitality service without owning any property)
- Uber (Largest taxi service without owning any vehicle)
- Netflix (Largest media streaming company which does not produce any media)
Transforming Your Business Into a Digital Business
First things first! You need to first understand the value of digital transformation. It needs to come from top to bottom, not the other way around. The value of a digital business needs to be well understood before thinking about any digital transformation. Just think about a sample organization called “MyPharma” which is a famous pharmacy chain. Let’s say this organization has hundreds of branches across the United States. The CTO of this organization has decided that they need to come up with new services for their consumers so that consumers will not go away from them. He has identified the following high-level things which need to be done to provide innovative services to their customers:
- Understand the customers who are coming to the pharmacy.
- Interconnect all the pharmacies so that customers get a unified experience whenever they jump into a “MyPharma” shop.
- Integrate all the systems into one single platform so that services are provided through standard interfaces.
- Expose their data (medicines, offers, reminders to customers) through mobile and web-based applications.
- Securely engage with premium customers and provide services which are customized for them.
Reference Architecture for DT
Once the requirements are clearly understood by the CTO, he evangelizes this idea across the senior leadership team through presentations and providing references about successful digital businesses. He convinces the senior leaders to take a shot at DT and gradually move their pharmacy business into a digital business. After scanning through all the available systems in their IT infrastructure, he is fascinated by how many different systems are squeezed into their system that even the CTO is unaware of. He sees
- Commercial Off The Shelf (COTS),
- Web Services,
- Cloud Services, and
He wants to
- Integrate these systems with each other without going with point-to-point connections.
- Once these systems are integrated, he wants to expose these services to different stakeholders, like customers, other branches, vendors, partners, etc.
- Once the services are exposed, he wants to monitor their KPIs and do improvements based on them.
- Provide secure access to information since medical information is sensitive to people and their health.
He comes up with a reference architecture which fulfills the above requirements as well as his business ambitions.
As depicted in the above figure, the CTO of “MyPharma” has identified four main capabilities which are required to build a digital business:
- API Management — Managing how people interact with the digital services you offer.
- Integration — Enabling your disparate systems through a common platform without affecting any of the existing systems.
- Identity and Access Management — Manage the users and their capabilities and avoid unauthorized access to data.
- Analytics — Monitor and analyze your business activities and frequently provide feedback to improve the business.
Once this architecture is identified and approved by the senior leaders, the CTO of “MyPharma” needs to select a vendor based on the following factors:
- Completeness of the solution in terms of implementing the full DT
- Future vision of the vendor and how innovative it is
- Financial ROI
- Support for the products and quality of support
Finally, the CTO comes up with a set of requirements in the face of RFI/RFP and contacts vendors to showcase their capabilities. If required, vendors are called for onsite/offsite demos, and then the selection is made.
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