Enterprise Architecture for Digital Business

Integrated Transformation Strategies

Tushar K. Hazra, Bhuvan Unhelkar

• Publisher: Auerbach Publications
• Year: 2020
• ISBN:
  9781351646710
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Verwaltung

Enterprise Architecture (EA) is an essential part of the fabric of a business; however, EA also transcends and transforms technology and moves it into the business space. Therefore, EA needs to be discussed in an integrated, holistic, and comprehensive manner. Only such an integrated approach to EA can provide the foundation for a transformation that readies the business for the myriad enterprise-wide challenges it will face. Highly disruptive technologies such as Big Data, Machine Learning, and Mobile and Cloud Computing require a fine balance between their business and technical aspects as an organization moves forward with its digital transformation. This book focuses on preparing all organizations – large and small – and those wishing to move into them for the impact of leveraging these emerging, disruptive, and innovative technologies within the EA framework.

Part A
Setting the Context for Digital Business

1 Digital Business, Enterprise Architecture, and the Transformation Imperative

Summary

This chapter presents an overview of digital business and introduces arguments for the transformation imperative. The evolution of digital business, its elements, their relationships, and how they have emerged over the past decade provide the necessary background for the transformation imperative. Digital Transformation (DT) is discussed here keeping digital technologies and the fundamentals of Enterprise Architecture (EA) in perspective. The complexities and challenges of digital business enterprise are ideally handled by the EA discipline. EA supports digital strategic planning by bringing business and IT viewpoints together. Security, privacy, and managing governance, risk, and compliance in the digital age are important considerations. Recognizing, developing, and establishing DT initiatives require exploration of emerging technology trends. The technologies of Cloud Computing, the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), and Big Data Analytics are all considered in terms of their potential impact on digital business. Finally, the nexus between EA and Business Architecture is discussed from the DT viewpoint.

What is Digital Business?

Digital business is the norm of today – not just an exception nor simply an extension. It is almost impossible to imagine a business that is not digital in some shape or form. Starting with the ubiquitous website and simple mobile apps through to bookkeeping, accounting, trading, and compliance, all businesses utilize digital technologies today. Therefore, digital business has become a continuous evolution of the current format into an automating, optimizing, and collaborating phenomena for the digital world. This evolution or transition from where the company is today to a fully digitized business of the future requires a thorough understanding of the structure and dynamics of the current organization. Digital Transformation (DT) needs to be considered in a strategic, holistic, and consistent manner. Piecemeal transformation of a company into a digital business does not provide the necessary advantage. The possibility of a half-baked transformation creating friction and challenges in the business are too high. Therefore, strategic consideration and investment in DT is an imperative for all businesses today. Furthermore, given the complexity of the initiative – it revamps the entire business – DT also includes strategies for change management with due consideration given to the shift in the organizational culture. Thus, DT is not merely a technology issue; it includes business and human concerns alike.

An understanding of what “digital” means is an important starting point for DT. This meaning, however, has a wide range and can differ from one perspective to another. For example, digital can mean going paperless or automating processes through to data analytics, process optimization, and the use of Artificial Intelligence (AI) in decision-making. Data storage, processing, and communications technologies are coupled with business processes and people in order to accomplish successful DT. Needless to say, such a dramatic change often requires leadership to envision the challenges and benefits of digitization, while keeping multiple facets of the organization aligned with its current operating environment.

Figure 1.1 summarizes what is meant by digital business and DT. On the left is the current business that may use basic digital technologies. The business leadership wonders, “What will the transformed digital business look like?” Some leaders may also wonder, “Why transform at all?” The reason for undertaking DT is explained by the characteristics of the new business:

FIGURE 1.1 Digitizing the business.

• Data related to all business functions is collected, stored, and secured, ensuring that the business is able to gather a wide variety and large amount of data that they may not have otherwise.
• Business decisions are driven by Data Analytics rather than by the intuition of the senior-most decision makers of the organization. Such scientific method reduces biases in decisions.
• Customers are connected electronically with the business, enabling them to operate at any time of the day or night and at any location (especially when mobility compliments electronic connectivity). Customers are also able to receive personalized service as the digital business is able to precisely identify their needs and provide for it.
• Other firms collaborate digitally with the business, enabling a wider expansion of offerings and providing opportunities to capitalize on the needs of the partner company’s customers. Collaborations on electronic/mobile platforms also enable process optimization.
• Digitizing records makes it easier for businesses to adhere to Governance-Risk-Compliance mandates, than if they were managed on paper. Storing the records and reporting them electronically to legal and audit authorities simplifies business processes and provides clear audit trails.
• All business functions are optimized through digital technologies – including sales, marketing, inventory, accounting, and human resources.

Figure 1.1 further shows that DT includes Digital Enablement (of processes) and Digital Collaboration (with partners). Enterprise Architecture (EA) is the conduit of successful DT as it establishes the foundation for consistent enablement and develops a standardized framework for seamless collaboration.

Digitization Landscape and Opportunities

Digital business can range from a simple website through to entire global digital companies such as Amazon, Apple, and Google. Examining a business critically from a DT viewpoint leads to the following questions being asked up front by the business leaders:

• What opportunities does DT bring to the business?
• Will digitization enhance the user experience for both consumers and employees?
• Will digitalization enable enterprise agility?
• What are the efforts and corresponding risks in DT?
• What are key criteria to ensure successful change management?
• Which digital business processes will be automated and which will be optimized?
• How will digitization impact sustainability?
• How does digital technology enhance communication and collaboration amongst business partners?
• How will digitization ensure compliance?
• Which system solutions will transition to the Cloud?
• Where will the data be stored (data privacy and security)?
• How will data be provided to business functions?
• What is the role of EA in undertaking DT?
• How will the success of DT be measured (metrics/KPIs)?
• Is DT a technology initiative?

Starting with the answer to the last question, DT is driven by data and associated technologies but it is not a technology initiative. Undertaking DT is a strategic business decision driven by the changes to and the availability of technologies. A brief review of the landscape of technologies and how they have impacted businesses is shown in Figure 1.2.

FIGURE 1.2 Landscape of technology-based federated digital era.

Figure 1.2 summarizes “System Solutions Technologies” and “Communications Technologies.” Both types have incrementally spawned the federated digital era that has enabled digital business today.

Part A of Figure 1.2 presents the technologies that enable increasingly sophisticated digital services:

• Object Oriented Technologies were a major revolution in solutions development technologies as they enabled faster time-to-market for IT solutions and, through the application of encapsulation, higher quality.
• Component Based Technologies encapsulated a group of objects in design, implementation, and execution, leading to an even faster time-to-market for the IT solution. These technologies were not as nimble as the Object-Oriented ones due to larger-sized components, leading to challenges in maintenance and operation.
• Service Oriented Technologies enabled offering of components over the internet, making it easier and faster for solutions to be developed using the services created by other providers in real time. Service Oriented Architecture (SOA) changed the landscape of providing solutions from component-based, single-site to a collaborative suite of services.
• Big Data, and data in general, made it possible for businesses to collect information they could not earlier and store it for processing. Big Data and Analytics develop a comprehensive view of different master data management elements (e.g., customers, products).
• Machine Learning (ML) enabled businesses to undertake data-driven decision-making. This is so because ML/AI makes it possible to derive insights from Big Data. ML capabilities (e.g., process mining) can extend enterprise systems’ capabilities.

Part B of Figure 1.2 presents the technologies that enable increasingly sophisticated digital communications.

• Cloud – and Associated Storages – was a game changer for the digitization landscape as it eliminated the administration and management of routine data functions from the business and shifted it elsewhere, leaving the business to focus on its core competencies.
• Networks, local and global, played a crucial role in the digitization of a business by providing connectivity.
• 5G and Mobile made it possible to shift analytics and processing from a fixed location to being completely location-independent.
• Blockchains offered another game-changing opportunity for digital business by providing a high level of veracity of data and analytics. This is due to blockchains’ potential to provide highly secured and validated data – especially after integration with existing enterprise systems. Blockchain technology also impacts the governance of information stored in enterprise systems.
• Sensors – Internet of Things (IoT) and Internet of Everything (IoE) – enabled collection of data with or without specific input from users. A number of IoT sensors collect massive amount of data associated with the business and/or the government and make it available for processing.
• Cybersecurity and Sustainability are the two important underlying architectural considerations in the overall landscape of digital era technologies.

Contemporary Digital Technologies and their Impact on Digital Transformation

Emerging digital technologies are significant and need to be understood from an architectural viewpoint. Table 1.1 summarizes these emerging technologies and also lists their potential impact on business agility.

TABLE 1.1
Contemporary Digital Technologies and their Impact on Digital Transformation

Digital Technology	Description	Digital Transformation Consideration
IoT (Internet of Things) IoE (Internet of Everything). IoT can be personal or industrial.	Enables non-stop sour...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• List of Tables
• Foreword
• Preface
• Acknowledgements
• Authors
• Part A Setting the Context for Digital Business
• Part B The Digital Enterprise Architecture Life Cycle
• Part C Leveraging the Value of Digital Enterprise Architecture
• Appendix A: Use Cases in EA and Digital Business
• Index