By Betsy Burton
What Investments Does Business Transformation Require?
I had the opportunity to host a webinar today about the four trends affecting enterprise architecture in 2023. During the session I highlighted the four trends, including:
- Drive toward Business/Digital Transformation
- Dependance on Business Ecosystem and Cloud
- Cyber Security Threats
- Prevalence of AI-enabled Products and Services
I also discussed how the discipline of EA was going to become more holistic, and encompassing broader viewpoints, including business strategy, AI, Security and Ecosystem.
If you would like see the webinar, you can view it on-demand.
One of the critical trends that is and will continue to impact enterprise architecture is the drive toward business transformation. And, one of the challenges many organizations face is understanding how business transformation requires a different level of investment than optimization, remediation, automation and modernization.
Transformation Requires an Investment in Business, People and Processes
One of the graphics that I used in the presentation was about the level of investment required for business transformation versus remediation optimization, automation, and modernization (See figure 1).
Remediation is focused on evolving existing business processes and information flows to reflect the current business context and operations. Remediation requires a bit more of an investment in business, people and processes, because they will be changing/evolving existing business processes, and thus may be affecting how people work.
Automation is focused on moving previously manual processes and information flows to run on digital systems, applications, and solutions. Automation clearly requires an investment in technology and information management to run automated processes. Automation also requires an investment in business, people and processes, since automation will introduce new operating models, processes and workflows.
Modernization is focused on moving existing automated systems to newer applications and solutions within a cloud architecture (public, private or hybrid). Modernization requires a significant investment in technology in order to shift over to cloud-based services, and may require some investment in business and people in order to adjust to new cloud-based solutions.
Business transformation (a.k.a. digital transformation) is the process of specifically designing new business strategies, models, and operations to support new digital business models and changing existing solutions, systems, processes, and information to support new business models.
Since business transformation is about introducing new business models, it requires a significant investment in business, people and business processes, including strategic planning, training, change management, governance and performance management. It also often requires a significant investment in technology because business transformation often involves integrating existing technologies with new and emerging technologies.
Bottom Line
Right now, there is a lot of market hype about business transformation or digital transformation. This is because of changes affecting the marketplace (See Four Trends You Can’t Miss In Business Transformation, 2023).
However organizations need to be clear about when they are transforming which part parts of their business versus optimizing, remediating, modernizing or automating their business.
Most organizations will not transform their entire business. Most organizations will transform part of their business and then evolve other parts of their business. It is critical to understand what your business and business areas really need to achieve your business goals and invest accordingly.
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This blog is part of the Business Transformation blog series by Aragon Research’s VP of Research, Betsy Burton.
