June 23, 2022
Business Transformation Requires Future State Thinking, First and Foremost
By Betsy Burton
For years I’ve been advising enterprise architects to focus on their future state first and foremost, and then to use this future state focus to guide and inform how they evolve their current state. I have used this approach for countless work projects and during consulting and advisory sessions with clients.
In this blog, we discuss the power of future state planning and architecting, and the value of using this for any long-term planning efforts.
The Problem with Current State Focused Planning
Many traditional planning efforts (such as BPM) start with trying to understand your current state, and then use this current state to drive future-state planning. There are many problems with this approach, including:
- focusing in on your current state first can cause you to unwittingly limit your vision and the scope of what your future state may be.
- a current-state first focus often results in organizations remediating, optimizing, and evolving existing business processes and models, rather than transforming them.
- focusing on your current state first and foremost makes it very difficult to determine what business processes, information, or technology should be eliminated, and what emerging processes, information or technology should be adopted.
Last, focusing on the current state can be a bit depressing for business and IT leaders, as well as users; people get focused on what’s wrong with the organization, and easily fall into infighting, protecting domains, and complaining.
The Power of Future State Thinking
With future-state-first planning, organizations look at what’s happening in their market, society, economy, and emerging business and technology context, and then use this information to guide scenario planning, analysis, and strategic planning.
Once this outcome-driven view of your future is identified, the organization can then look at its current state and see if that future-state vision is valid or if it needs to be refined. Organizations can then use this vision to figure out how the current-state people, process, information, and technology need to be evolved to achieve that future state. And they can determine what new technologies or resources need to be brought in, and what existing resources need to be eliminated.
Future-state planning is a great way to get business and IT leaders as well as users excited and interested in the opportunities that lie ahead.The big difference is that a future-state approach looks at the opportunities in our future and then uses this vision to inform both tactical and strategic investment decisions. Whereas a current-state vision is focused more on what we fix and how to evolve our current state.
Future-State Planning in Business Practice
I was once working with a European financial services organization that was considering what its future might look like, particularly given economic, regulatory, political, and societal changes.
When they looked at the future and the trends that were going to impact their business, they realized that they had the opportunity to provide transaction management services to a wide variety of industries, not just financial services. They created a business model whereby they deliver financial-based transaction services to support their existing customers. And, they are adding open interfaces and connectors so they can be an iPaaS to support other businesses that need transaction capabilities.
If they had not thought in terms of future-state first, they would likely have never even considered radically different business models and would have stuck with financial services business models. But starting with a future-state approach gave them the freedom to think out of the box.
Enterprise architecture must be driven by the future state business strategy to weigh the impact and cost of tactical versus strategic investments. Stated more plainly, if you don’t understand your business vision and actionable business strategy, all investments are tactical, and more likely to risk wasted or undefined ROI.