Digital Architecture and IT Operating Model Options for Global Organisations
Multi-national and global corporations have struggled with achieving the optimum balance between global strategy and local delivery, with organisations establishing different business models depending upon whether they are led by global brands or by local sales and marketing. As organisations move to becoming a Digital Enterprise new tensions and opportunities enter the global – local assessment, in particular:
- The speed of change and adoption of digital services can vary widely region by region and country by country – driving a local focus
- The multi-customer nature of new cloud services means the provision common platforms which can be flexible to local needs is now practical.
Digital Transformation for a global organisation needs to take into account the options for the business and IT operating models and the underpinning digital architecture, and match the preferred option to the business drivers of the organisation.
Digital Architectures for the Global Enterprise
IT and IS services have been delivered using a range of different mechanisms in support of multi-national businesses, ranging from:
- Local procurement and delivery, a federal model, commonly seen in telecoms companies where local tariffs and systems can be dominant
- Regional management of common templates, using a build once deploy many as is often the case for ERP
- Common platforms provided by a central or regional shared service, as is often the case for back office Finance systems but only usually applied to standard processes.
However, new Digital ‘cloud based’ services are changing the dynamics of IT delivery models for a number of reasons:
- Software as a Service (SaaS) are by their nature designed to support multiple customers with varied requirements, which eases the transition from local to global.
- The rate of change of new digital services providers and applications is much higher than in the enterprise software world, which drives a need for increased flexibility and agility.
- Opensource applications are a very important (and viable) source of new software and services and are often the area of greatest innovation for new digital services.
- The availability of SaaS services is driving ubiquity in the use of certain services on a global basis, e.g. CRM platforms. However, the support provided for non European languages is often only available from regionally provided SaaS, e.g. for China and South East Asia.
- Security of data needs to be managed differently, since a large amount will sit outside of the Corporate IT boundary.
In this environment we believe that the Digital Services architecture for global corporations will consist of 3 types of service, as illustrated in Figure 1 below:
- Central brand and product data services: For brand driven global organisations brand and product information will typically originate and need to be controlled at a Global level, which drives the requirement for Digital Asset Management systems and Product Lifecycle Management systems. Given the expense and specialist expertise required, we can also see a requirement for global Enterprise Data Warehouse platforms and their associated analytical tools to handle ‘big data’ sets.
- Regional customer management services: Customer behaviour and patterns of interaction, e.g. through large retailers rather then local corner shops, often falls into regional groupings. Language also drives the requirement for the systems and applications at a regional level, e.g. European languages with their character set versus Asian languages with the very different character sets. As such we envisage the need for regionally based customer management platforms. As the strength of SaaS platforms grows to handle local variations then global platforms are also emerging for customer data management and analytics.
- Store of approved cloud services for local use: At a country level agility and flexibility will be key, as such access to emerging cloud services will enable a local competitive position. Using digital services at a local or country level will carry with it certain risks relating to data security and data ownership. As such the digital architecture needs to specify the standards that such services need to adhere to in order to protect the global brand from damage due to any local data losses or security breaches.
IT Operating Models for the Global Digital Enterprise
Given the possible delivery architectures for Digital Services, we envisage three possible roles for the IT function, at a Global, Regional and Local level:
- Digital Services Provider – The IT function procures, implements and provides the Digital Services required. This approach can be effective where common global platforms are required but the digital world implies a higher rate of change than traditional back office IT world and, as such, new skills will be required to continuously evolve the services to ensure they are competitive. Access to those skills in a fast changing environment and market will need to become a Critical Success Factor for the IT function.
- Digital Services Integrator – The IT function provides an Integration Framework to ensure systems can work together and standards are maintained, buying in some services and integrating with other services provided by the business.
- Digital Services Governor – The IT function sets the standards that need to be adhered to when Digital Services are provided to the business, which are then applied through the procurement function which engages the local Digital Services Providers, who contract directly with the business or are embedded as part of a business service (e.g. a marketing Service from an Advertising Agency).
The common theme for these different approaches is to have the right skills and capabilities in the IT functions for the new Digital Services. Our Immediate Framework (Figure 2 below) for Digital Services Integration provides a model which can be used to establish the skills and experience required, as well as providing a series of reference digital architectures for managing the selection and integration of new services.
The framework for the skills required to enable Digital Services Integration is summarised in the Figure 3 below
The physical distribution of skills for a global organisation will depend upon the make up and structure of the organisation but by its nature, digital services enable remote delivery and as such regional or global teams can provide delivery support to local and country business units. Nonetheless business focus, language, culture and time zone issues will tend to drive towards a regional model for support and Centres of Excellence.
A summary of the operating model options for the IT function of a Digital Enterprise is shown in the Table below
|Requirement||IT function role||Where provided|
|Global Platform||Digital Platform Provider or Digital Services Integrator||Global provision, Regional CoE|
|Regional or line of business customer management services||Digital Services Integrator||Global CoE, Regional and Local provision|
|Local business cloud provided Digital Services||Digital Services Governor||Global and Regional CoE|
If you are considering how to build an IT organisation which can support the evolving digital needs of a global enterprise then utilising the reference models available from our immediate Framework can accelerate and de-risk the process.