What's Next for Your Enterprise: Must-Win Battles for Tomorrow's Industry Leaders
What's Next for Your Enterprise: Must-Win Battles for Tomorrow's Industry Leaders
A simple fact: Information Technology is a key capability that must be mastered if you want your company to be leading within your industry.
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Let me start by stating a simple fact: Information Technology is a key capability that must be mastered if you want your company to be leading within your industry. You do not have to take my word for it, Didier Bonnet and associates said it best in their “Leading Digital”:
We discovered all kinds of companies, both those struggling and those succeeding in the great challenge of becoming digital. [...] the companies that are succeeding — and they range across industries and sectors — we’re calling Digital Masters. And Digital Masters outperform their peers. Our work indicates that the masters are 26 percent more profitable than their average industry competitors. They generate 9 percent more revenue with their existing physical capacity and drive more efficiency in their existing products and processes.
The massive improvements in automation and velocity witnessed within the IT Industry, have broken through the digital barrier for quite some time now and they are taking the physical world by storm. Robotics and automation have been optimizing factories and production lines for quite some time now, and these technologies are now being adopted pervasively throughout the supply and value chains of any industry.
Almost anything now has a processor and a set of sensors on it, we call it the Internet Of Things (IoT). Your coffee machine, your toothbrush, your running shoes, your car, delivery trucks, drones and so much more. Everything you can think of already is or is in the process of being automated and connected, generating and delivering gigantic data sets constantly streamed across the globe.
Reach IT Excellence and Thrive, or Watch Your Company Fall Behind
As a Technical Leader and an Architect, you play a key role in ensuring your organization is ready for this; the very reason your roles exist is to enable your enterprise to lead the industry in which it competes; it is your responsibility.
You must build your systems to embrace all this; ingest existing data feeds relevant for your industry; if the data you need is not yet available, find a way to create those data streams. Grow that capability organically in your enterprise or partner with leaders in IoT and Pervasive Computing that can help you with that.
Ensure that every single component you deliver contributes to these data streams with any new information that might be relevant grow a parallel branch to your operational pipeline that will be able to sample this data, play with different models, use those very same feeds to train them and, once ready, use them in production for real prediction.
Yes, we are talking about Analytics and Machine Learning, the very same technology that will give you the ability to constantly follow your customers' needs and preferences, optimize your processes, and predict trends to ultimately enable you to make smarter decisions.
Reach IT excellence and thrive, or watch your company fall behind.
You Need Excellent Digital Capabilities
In fashion 3D models and Digital, Showrooms are used to considerably reduce the number of samples that need to be produced and shipped across the world.
In agriculture intelligent and digitally connected machinery (IoT) enables the development of ‘precision farming’, which are systems that help farmers improve the accuracy of operations giving each plant or animal exactly what it needs to grow optimally, minimizing resource consumption, thus costs and environmental footprint.
In the automotive sector, digital technologies are reshaping vehicle innovations (as car connectivity, autonomous driving), innovations in production (as smart factories and industry 4.0 applications), and enabling completely new business models as the provision of after-sales services and expansion into on-demand mobility services.
These are just a few examples; if you think your industry does not have anything to do with Information Technology, think again.
You need excellent digital capabilities.
Lucky for you this does not have to necessarily mean huge investments and the creation of immense IT departments.
Focus Your Digitalization Effort on Your Core Domain
Do you know the reason your company was founded? Which was the promise your founders made, their vision, their mission? That willingness to satisfy ignored customer needs, that desire to disrupt your industry, to create new revenue streams or maybe even completely new markets. Chris Zook and James Allen in their "The Founder Mentality" call it your Insurgent Mission.
It was that very Insurgent Mission that through the years made your business thrive, made it successful, and ensured you a leadership position within your industry. That very vision that made you achieve and constantly retain a certain competitive edge, an advantage on your competitors; it gave you something special, something that the other players in this space do not have or have not achieved just yet.
It made you different somehow.
Those IT systems, applications, and solutions that are or will directly support such competitive advantage, your Insurgent Mission, compose your Core Domain.
Focus your digitalization effort on your Core Domain.
All the rest is of secondary importance, no matter how fundamental those systems and processes may seem to the well-being of your business.
Core Domain: A Specific Example
Just to give a practical example, even if any enterprise needs an HR system to correctly process and store employee information, most businesses do not get any competitive advantage from it. It needs to be there and it must work, that's it. If this is true also for your business, you can be sure that your HR system is not part of your Core Domain.
For this reason, most organizations are more than happy to use a Commercial off-the-shelf (COTS) solution and to implement standard processes in this specific subdomain. You can minimize the time needed for a new employee to become fully productive while focusing your development muscle where it makes more sense, where you can differentiate your offerings.
Now, let's say your enterprise operates in the actual Human Resource industry, as any consultancy or headhunting company out there. If you want to be successful, you will need to be prepared to have thousands of profiles for any existing industry in any existing country. Moreover, you might have your own very different way to handle each customer, or project, the very unique process that has given you that competitive advantage we have been talking so much about.
Your HR systems will need to be extremely specialized to be able to support your processes, associate each profile to a set of skills, preferences, and so on and to offer the ability to query your resources instantly on such information. These systems will need to enable your employees to match the best candidate for the best position in the shortest timeframe possible and faster than any other competitor out there. The HR systems and related processes are part of your Core Domain.
If you want to be the best at what you do, you must have the exclusive on the best specialized IT systems that solve these very specific challenges in your very unique way.
Three Focus Areas
Let's wrap up what we have concluded until now: you must have specialized and perfectly tailored digital capabilities in your Core Domain that can help you reach and maintain your edge on your competition. Let me state the obvious: you must retain full control over the systems composing your Core Domain.
If the velocity and agility with which you develop your Core Domain depend heavily on external factors that reside beyond your sphere of influence, you lose the ability to steer your own business. The same is true in regards to the availability of your Core Domain, to its service quality, and so on.
So how do you ensure that your organization not only succeeds in achieving this state but also has all the capabilities required to maintain it? In other words, how do we succeed in our digital transformation? We have identified 3 areas you must focus on, which will be extensively covered in dedicated articles:
You need to build IT solutions that will support your core domain and its integration to the rest of your IT Landscape. This needs to be done right to ensure the IT systems can evolve at the same speed as your business. This will ensure that your Core Domain is constantly delivering new and innovative features while meeting the demands on required availability, quality, security, and so on.
In the posts covering this area, we will discuss modeling techniques as Domain-Driven Design and Event Storming, we will dive into typical architectural styles and patterns of Cloud Native applications, such as Microservices, Reactive Systems, CQRS, Sagas, Backend-for-Frontend, and much more, to finally discuss and solve the issues this tech brings when hitting the enterprise scale. Minimize risk, maintain control, and ensure compliance while reaching outstanding levels of quality and velocity through Fractal Architectures.
Your Core Domain must operate at any time. This means that the infrastructure required to deliver such services and functionalities must be able to scale with your business and be extremely resilient and reliable. We will discuss the difference between today's cloud offerings, services, and options and we will answer questions like "when should we trade control for simplicity and reduced costs?
When should we instead specialize our teams to be able to leverage more complexity?". We will then discuss how to minimize vendor lock-in, when and how to adopt a multi-cloud strategy, and finally, present a pattern for building architecturally-aware self-healing systems.
Your software can be adopting state-of-the-art tech stack and architecture, it can run on best of breed digital infrastructure, but if your organization does not have the right culture you will fail nonetheless. Some indicators of a suboptimal environment are, among others, the existence of segregated operation and development teams, the inexistence of direct and open communication between your end users/customers and your teams, the absence of a sense of ownership for the products the team delivers.
The must-win battle for today's leadership is to create a balanced organizational structure in which your teams can successfully cooperate while preserving a high degree of self-determination. Through a specific organizational roadmap and milestone plan of the gradual and constant delegation which must be supported by a parallel reorganization of your IT Landscape, you can allow your organization to reach unprecedented levels of cooperation, time-to-market, and can leave you the time to focus on actual vision and strategy.
There is so much we want to cover, talk about, and get your opinions on, but where to start? The organization, Infrastructure, or Software? Leave a comment if you have any preference and we will take that into account when deciding our next topic!
- Leading Digital: Turning Technology Into Business Transformation. George Westerman, Didier Bonnet, Andrew McAfee. Harvard Business Review Press, 2014.
- How are digital technologies changing innovation? OECD Science, Technology and Industry Policy Papers July 2019 No. 74.
- The Founder's Mentality: How to Overcome the Predictable Crises of Growth. Chris Zook, James Allen. Harvard Business Review Press, 2016.
- Domain-Driven Design: Tackling Complexity in the Heart of Software. Eric Evans. Addison Wesley, 2003.
- Cloud-Native Transformation: Practical Patterns for Innovation. Pini Reznik, Jamie Dobson, Michelle Gienow. O'Reilly Media, 2019.
Published at DZone with permission of Angelo Agatino Nicolosi . See the original article here.
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