It’s no secret that digital transformation initiatives embarked upon by enterprises are impacting all facets of the enterprise. This enablement requires unified standards in terms of the user interface design and other access requirements that in turn requires strategic planning. LOB executives, on the other hand, who usually are focused primarily on running their own businesses can see strategic initiatives that may impact their organization along with ways in which they can better connect with other parts of the enterprise along with creating external partnerships. For EA teams, supporting successful digital transformations involves more than implementing well-chosen technology solutions. As these third platform technologies have resulted in a change of customer behaviors, their expectations, and the market changing to adapt to those behaviors and expectations, the enterprises have to transform to compete effectively to position themselves appropriately in the marketplace and the overall environment. Mobile devices have become the enablers of an online journey for customers, employees, external partners, as well as other stakeholders of the enterprise’s ecosystem. In an increasingly digital … The authors wish to thank Sharm Manwani of Henley Business School for his contributions to this article. There are two primary roles that they can play: 1. are considered to hold real value in any transformation initiative, the real value lies in the process that is used to derive those artifacts. Even though digitalization sounds like that it’s ‘technology’ oriented, the fact is that everyone throughout the organization is involved. Building of Big Data platforms requires enterprise wide involvement of LOBs and the IT department as they can help provide information on the data and information assets that are crucial to the enterprise and that can be used to feed the enterprise’s Big Data platform. Why you need an enterprise architect Large organizations are increasingly turning to enterprise architects to help bridge the divide between IT and the business and drive digital transformation. This platform can then become the foundation for gleaning future insights. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. What is the Benefit of a Digital Transformation Architect? The survey findings, along with our experience in enterprise architecture, suggests that four moves can help EA teams advance their companies’ digital transformations: With these tactics, EA teams can build stronger working relationships with senior executives and managers—and thereby position themselves as strategic partners in their companies’ digital transformations. Sven Blumberg is a partner in McKinsey’s Düsseldorf office, Oliver Bossert is a senior expert in the Frankfurt office, and Jan Sokalski is a specialist in the Wroclaw office. If I start talking to an audience and start with, “Enterprise Architecture is required for driving Digital Transformation … The growing complexity of the enterprises coupled with the fast pace of market driven change requires a methodical and a disciplined approach. collaboration with select social media and trusted analytics partners We strive to provide individuals with disabilities equal access to our website. DevOps Explained. Enterprise architect jobs typically require an undergraduate degree in computer science or a related field and five to 10 years of IT experience before you can step into the role. Subscribed to {PRACTICE_NAME} email alerts. cookies, McKinsey_Website_Accessibility@mckinsey.com. We'll email you when new articles are published on this topic. Copyright © 2020 | WordPress Theme by MH Themes, Podcasts – Project and Portfolio Management Training, Developing an Enterprise Artificial Intelligence or AI Strategy, A Review of Artificial Intelligence (AI), related technologies and business use cases, CIOtechCentral – Intro to the New Podcast on Digital and Information Technologies, What is DevOps? CIOs and other C-execs though have a responsibility to not let get this transformation out of control. Various Lines of Businesses (LOBs) such as Product Development, Sales, HCM, Procurement, etc. For example, social media specific policies must be formulated and enforced to ensure that enabling of business functions and processes with social media features don’t result in unintended consequences that may hurt the organization’s brand. Digital Transformation in 2015 and Beyond – The Changing Roles of IT, the CIO, EA and Strategy “There is real tension between IT and the broader business as budgets and control move outside the traditional IT department. At PITSS, the benefit of having an enterprise architect involved in the digital transformation project is that we bring a vast knowledge of other … We’ve seen that an EA team can better align the IT function’s priorities with the business’s priorities by tracking its accomplishments with respect to the business capabilities that it delivers, rather than the sheer number of technology applications that it implements. Identifying and analyzing new ideas across the organization is the first step in the strategic planning process of successful organizations. Also, the fact that many enterprises are currently building their digital foundations, it is incumbent to take a strategic rather than a tactical approach to prevent further muddying of the enterprise’s technology platform. Participation is free, and results will be shared with all respondents. Please click "Accept" to help us improve its usefulness with additional cookies. When it comes to integrating applications, a smaller proportion of their integrations consist of point-to-point connections between two applications (56 percent versus 76 percent at other companies), which lessens their “technical debt.” Respondents from digital leaders were twice as likely as respondents from other companies to say that their companies are piloting architectures based on microservices, which are independent components that developers assemble into software applications. 1. This collaborative process helps in not only aligning enterprise business processes with business strategy but also helps in bringing down the walls that exist between various LOBs. Respondents are asked to identify their companies as “digital leaders,” and these choices form the basis for our comparative analysis of digital leaders and other companies. However, enabling all of an enterprise’s workforce to mobile based solutions can be a large enough change initiative that may overwhelm the backend systems, introduce security and privacy issues, require special design  of the new user interface, etc. Unleash their potential. Below are some examples in that show how EA can be instrumental in guiding and managing digital transformation initiatives within an enterprise. We use cookies essential for this site to function well. … The findings are based on a two-sided t-test with an error value of p≤0.05. Building of Big Data platforms requires enterprise wide involvement of LOBs and the IT department as they can help provide information on the data and information assets that are crucial to the enterprise and that can be used to feed the enterprise’s Big Data platform. February 9, 2017 According to our survey, EA teams at digital leaders appear to avoid this trap. Respondents come from a number of countries and a variety of industries. However, building such a platform that can provide cross LOB insights requires working with different segments of the enterprise and thus requires appropriate collaboration, communication and planning. Given the versatility of enterprise architects, leaders may be tempted to assign them to help resolve urgent problems of various kinds. If you are like most CIOs, your organization is probably already in the midst of a digital transformation where a number of your organization’s business functions are slowly becoming digitalized. This effort in larger enterprises can therefore be significant enough that may require a methodical transformation approach. Respondents from digital leaders were more likely to cite peer recognition, education, and well-defined career paths as features that appeal to their employees (Exhibit 4). are all vying to digitalize their business processes and to roll out new digital products and solutions to the marketplace including getting more functions and features for less by migrating to a cloud based platform, rolling our mobility based applications, etc. The role of enterprise architecture in digital transformation 1. What does it take for traditional companies to create value with digital technology? The literature conceives EA … Customer consultant:Business architects who work at technology vendors or solution providers serve as trusted partners to the companies that buy their employers’ prod… It also informs business and operating models, and leads the enterprise … Use capabilities to connect business and IT. (On average, respondents said strategic planning takes up about one-fifth of the EA team’s working capacity.) The role of enterprise architecture in digital transformation webinar on june 7th, 2018 Danny Greefhorst dgreefhorst@archixl.nl 1 2. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Wasim Given the importance of technology, enterprise architects should be intricately involved in strategic planning efforts for digital transformation. These enterprise wide efforts of transformation therefore must be governed appropriately to ensure minimal business impact and disruption. However, this can cause the architecture team to spend most of its time solving problems and little or no time on advance planning. as digital laggards due to the speed at which digital technologies are available, but transformation … Based on EA’s earlier mentioned benefits, its role in an enterprise’s digital transformation becomes even more crucial. Retailers have built up significant assets on … As digitalization of most business processes is necessitating building of a new cloud based backend that serves a number of LOBs, this must be coordinated with various LOBs and stakeholders. Select topics and stay current with our latest insights, Five enterprise-architecture practices that add value to digital transformations. Flip the odds. Digital transformation is the current dominant type of business tra nsformat ion having IT both as a technolo gy enabler and as a strategi c driver for digitization. They were also more likely to say that they offer enterprise architects the chance to pursue career paths in departments other than enterprise architecture. tab, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. tab. hereLearn more about cookies, Opens in new At a high level, digital transformation involves reshaping business models with advanced technology solutions. This platform can then become the foundation for running future insights. The architect’s role has become a key role in organizations, just like the new Chief Digital Officer’s role. Things don’t have to be this way. As an EA provides a holistic view of all the applications of the enterprise and their underlying platforms and inter-dependencies, the EA process can help in the development of a strategic migration plan from the current state to the target state rather than each department doing it on its own without taking into account the impact to other applications and systems. (Respondents are not required to submit answers to every survey question, so the number of respondents can vary from one question to another.) Digital transformation – what? For example, based on the enterprise’s cloud strategic plans highlighted in the EA, the LOB executives related to sales, supply chain, or HR functions could foresee possibilities for their specific solutions. Driving Digital Transformation Using Enterprise Architecture as a Problem Solving Tool Set. Something went wrong. The architect’s role, in the digital transformation era, is to define WHAT solution to build and WHY, and HOW will that specific solution offer business value to the whole ecosystem of the company, for the given business model. As EA provides a holistic view of all the business processes, users of those business processes along with the various use cases, it enables analysts and LOBs to see all the relevant business processes involved in specific customer journeys. Based on EA’s earlier mentioned benefits, its role in an enterprise’s digital transformation becomes even more crucial. The analysis of the interview data resulted in 6 main findings on the role of EA in digital transformation initiatives. Enterprise Architecture Management failing to play a critical role is alarming to both company leaders and EA practitioners. Most companies have a dedicated EA group embedded within the larger IT organization. Enterprises are looking to migrate a number of their application workloads to the cloud, either by modernizing  their legacy systems or through adoption of new SaaS solutions (e.g. What is the Role of an Enterprise Architect within the digital transformation? And they attract talent primarily by offering people appealing assignments, ample training opportunities, and well-structured career paths. But not all EA teams carry out their responsibilities in the same manner. To participate in the survey, please visit easurvey.org. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Use minimal essential If you would like information about this content we will be happy to work with you. Please try again later. McKinsey has conducted a survey on enterprise architecture in collaboration with Henley Business School since 2015. However, IT Investment Governance and Project Portfolio Management is where … Organizations have come to manage and govern transformations of all kinds in various ways. The increasing reach of the applications and systems along with the need to understand customer and business partner behavior is necessitating intelligent business insights that are only possible through big data applications and analytics. Due to the high computing resources needed to run these applications, more enterprises are opting to run these in secure cloud environments where they have more flexibility and options related to costs and performance. In fact, pressured by the competition, various LOBs of an enterprise seem to be more anxious than IT to roll out new solutions, thus in turn pressuring IT to become agile and responsive to LOB demands and requirements. These responsibilities fall within the typical enterprise-architecture (EA) team’s remit, which is to manage the way that all of the company’s IT systems work together to enable business processes. Respondents from digital leaders were more likely to say that their EA teams use capabilities as their primary grouping for the delivery of milestones toward their target architecture (Exhibit 3). Most transformations fail. A new survey by McKinsey and Henley Business School highlights the need for enterprise architects to facilitate digital transformations by managing technological complexity and setting a course for the development of their companies’ IT landscape. It requires an operating model that aligns governance, processes, and talent models with the business’s needs and promotes effective collaboration between business and IT. The Enterprise Architect will lead and/or support digital transformation engagements with Strategic customers jointly with other Virtual Account Team (VAT) team members from the ANZ DTO team. The current state of the EA provides visibility of the various data stores in the enterprise along with the information feeds from other sources. Examples abound which show that Big Data solutions that were built but not aligned to business needs are not accepted by the business resulting in a loss of effort and resources. These teams engage senior executives and boards and spend extra time on long-term planning. A Tutorial and Training. Respondents who said their companies’ EA teams devote a higher-than-average proportion of their capacity to strategic planning were also more likely to say they create added value for their organizations. Enterprise Architecture helps organizations formulate business strategy through outlining the framework needed for IT delivery. Digital transformation within the context of each enterprise is about the change that all enterprises are going through in response to the overall disruption caused by digital technologies (the so called ‘third platform’), which essentially constitute Social, Mobile, Analytics, and the Cloud. Here are some examples which demonstrate why injecting digital initiatives in the enterprise must be managed and governed carefully to prevent a negative impact on the continued business of the enterprise. Giving Digital Transformation an Enterprise Architecture EDGE. our use of cookies, and Enterprise Architecture is a critical input to steer decision making towards the evolution of the future state architecture. 2 Value proposition Customer segmentCapabilities Digital … It’s quite obvious that injecting new digital solutions within the enterprise can disrupt the existing technology base of the enterprise. 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