In today’s business world, the word “digital” has been bolted on to nearly every aspect of IT.
However, when you take a step back and analyze how companies across industries are tackling digital and the promises of new business models, modes of customer interactions, and products, you can see a myriad of strategies and approaches being employed.
There are many ways to approach digital. Some companies go for the “big think,” some reach for specific solutions to immediate pain points, and others try to modernize their way to digital by using their existing technologies. At Capgemini Invent, we believe selecting the right approach is quite nuanced. Factors such as industry, customers, product, the digital maturity of the enterprise, and the degree to which competitive pressures require immediate attention all will impact how a company takes on digital transformation.
What’s clear is that one-size-does-not-fit-all and a balance of top-down strategy, architecture, and planning must be validated by grassroots innovation efforts fanned out across the organization. So, what is the common thread among the companies succeeding in transforming their business to digitally-centric operating models?
The increasing importance of digital architecture
In concert with the right strategic focus, fostering an innovative culture, and a willingness to reconsider all traditional notions of customer experiences, these companies are putting in place well-defined digital architectures, enabling them to achieve higher levels of sustainable digital transformation success.
Enterprise architecture (EA) has always been a key pillar of successful IT planning, operations, projects, and business collaboration. So, what is different about digital architecture and why is it becoming increasingly critical to get right?
The answer to this question is complex, but centers around the blurring lines between business and technology. In the past, it was generally quite clear where business processes ended, and technology enablement began. But digital thinking and innovations have broken down these boundaries. We now have whole businesses, interaction moments, products, and experiences in which you cannot separate business concerns from technology concerns. A well-thought-out digital architecture guides an enterprise’s gradual maturation in delivering digital solutions that empower experiences, integrations, and insights.
Operating digitally means the entire enterprise becomes a series of interconnected elements that must function at speed, provide hyper-personalization, scale rapidly to meet demand, safeguard data and privacy, and, of course, be perceived as frictionless and valuable to customers at the moments of truth in all customer journeys. Achieving this is not a project with a defined end-state; we all must realize that the continual evolution of digital architecture is a key discipline – just as strategy, innovation, research and development, and customer research are pivotal to remaining relevant and competing for customer loyalty.
Our unique approach
The proven disciplines of EA are predicated on five domain layers: business, experience, application, data, and technology. At Capgemini Invent, we believe that digital is significantly impacting each of these layers and businesses need to approach EA with a digitally-focused mindset. But how?
When it comes to business architecture, its capabilities are greatly impacted by new operating and service models. It’s important to understand what makes the company unique – from its capabilities to productions to distribution – to properly define what digital means to various aspects of the enterprise. We often help our clients classify their value chains and apply analysis to identify opportunities to compete and gain market share.
Digital operations are forcing many industries to explore platform-based business models – opening the architecture and leveraging capabilities outside the four walls. This is driven by a realization that traditional models of product superiority and aggregation are not sustainable with the democratization of scalable IT solutions built on low-cost cloud architectures. Established businesses are coming to grips with the fact that they may no longer own the complete customer value lifecycle. Platform thinking and architectures provide a way to remain relevant among ever-expanding ecosystems of innovators targeting specific customer moments where innovation has been lacking. Start-ups may excel at acquisition, onboarding, and rapid product configuration and selection; however, in industries like banking and insurance, traditional players are still critical due to their capital and scale.
We are also seeing a heavy focus in business architecture on empowering front-office capabilities with powerful digital solutions that radically transform what we know as traditional customer service. Some industries are pushing out complete self-service capabilities and capitalizing on the digital natives’ preference and willingness to manage their accounts via mobile apps. In more complex product industries predicated on advice, we advise our clients to ensure there are blended digital and human interaction options available (think a robo-advisor in wealth with the ability to engage a financial advisor, if needed). All of this requires strategic thinking, cost-benefit analysis, and evidence-based validation of C-Sat implications – all of which is crystallized via a well-constructed business architecture.
Organizations must map customer journeys in order to understand the impacts opportunities of digital. Historically, journeys were completed to understand human actor concerns across a series of experiences (what is enjoyable, what is not, what is frustrating, etc.). While useful in many settings, we saw untapped potential in these journey maps. Rather than stopping at human concerns, we believe true experiences can only be understood by a deep exploration of all the elements that went into serving up the key customer moments.
It was these realizations that drove us to develop what we call an Engagement Blueprint. The Engagement Blueprint is a highly visual and informative way to look across a series of experiences to understand how customers engage with brands and companies. We now no longer stop at the human actors but rather help our clients map the moments into processes and supporting applications/technologies, capturing the data needed, and even what cloud infrastructure components were called upon to provide scale, speed, and security in these moments. As we work to reimagine customer experiences we also capture (or define, if lacking) the KPIs that matter at each step to ensure we can measure the value of proposed enhancements.
By mapping the journeys, you get to know your stakeholders and can humanize the architecture by approaching it with a truly outside-in perspective. It also provides contextual relevance, allowing brands to better understand the motivations and feelings of the customer at any given point in the journey. Emotions like excitement or stress all impact the experience and the insights offered by the Engagement Blueprint allow brands to ensure interactions are pleasurable, valuable, and memorable.
The explosion of new technologies, changing demographics and the overall digitization of our everyday experiences warrant an increased focus on how we orchestrate experiences for stakeholders across interaction channels. In the experience architecture we then codify concerns such as actors/personas, journeys, motivators, desired outcomes, and human emotions.
Digital requires massively open and agile architectures. Innovations are continuously challenging the notion of legacy architectures. It is important that businesses ensure their application portfolios are digital-ready. This can be done by modernizing the technology, wrapping and extending it, or starting fresh completely. It is crucial to actively manage application portfolios to avoid anchors that prevent digital mastery.
Engagement layers are being built to shield customers from internal complexities and to hide non-user-friendly interfaces. We assist our clients with API/microservices migrations to ensure the application architecture is a source of competitive advantage and not a limiter in partnering with new consumers and suppliers.
Many organizations are also realizing that the heavy lift of transforming the entire application architecture tier can be aided by infusing technologies such as RPA, OCR, and NLP that allows for the orchestration of rapid automation solutions. These investments have cost benefits while more sweeping transformations in business models are evolving. Pivoting to a fully open platform-based operation will take time and require both internal and external coordination with many counterparts. But, that said, we cannot stop innovating in the application architecture tier while these strategies evolve.
One must always remember that we consider the application architecture from an outside-in perspective. Delivering the blended digital and physical experiences envisioned must be orchestrated so that applications are consistent, familiar, and branded across all channels. As uncovered in Engagement Blueprinting, traversing the app-to-web-to-physical locations must be thoughtfully architected to shield customers from inherent technology complexities.
Real-time data is the lifeblood of digital. The explosion of data sources and the sheer volume of data means that businesses need to implement a data strategy that ensures relevancy, value, and the secure and ethical use of data as it proliferates.
Digitally-focused organizations today are enabling the insights-driven enterprise – infusing real-time analytics into key moments to drive behaviors, as well as analytics to steer the business. They’re also removing IT as a hurdle by leveraging data innovations such as data lakes and powerful visualization tools to empower business users.
Data science is a competitive lever for all organizations. The EA team must partner with data scientists to ensure all requisite architectural components are in place to allow for true hypotheses-driven data science. Equally important, the architectures should be ready to consume these insights and findings in a way that customers, associates, and executives can feel the transformative value of these game-changing realizations.
The rapid innovation of data technologies, data management, and storage also allows data architects to modernize complex data warehouses, data marts, and business intelligence solutions that have become bloated with reports that in many instances, are not understood. We are applying the same approach to data and analysis as we are for customer self-service enablement – putting it at the fingertips of the human actors that need it, at the right moment, in the right form factor. Gone are the days of calling the IT team for yet another derivative of a report – today’s knowledge worker must be made self-sufficient in reporting, analytics, and visualizations. The value of this in the hands of marketers, sales teams, and customer service teams is significant and will shape a virtuous feedback loop of continual digital innovations.
Underlying all of the above is the cloud architectures that provide the option to power the various digital operation models being envisioned. Architects – working with their counterparts in business and technology – must define the patterns and decision frameworks for the usage of ready SaaS solutions, when PaaS makes sense for innovative new development outside of core platforms, and when IaaS services are leveraged for compute/storage/network. What once was a key limiter of technology innovation and speed to market while also consuming significant capital has evolved into a series of utility services to be consumed, connected, and delivered in fit-for-purpose cloud architectures.
The recurring theme of one-size-does-not-fit-all holds true in the cloud architecture layer of EA. Capgemini Invent’s clients are nearly all leveraging a hybrid cloud strategy in which elements of SaaS/PaaS/IaaS are being provisioned from multiple partners and the application integration architectures are being modernized to allow for these connections. Larger players that command scale and industry leadership positions are even able to secure private public clouds – meaning a provider such as AWS, Azure, or Google will carve out a private cloud on their public cloud for a customer.
Another heavy area of innovation in technology architecture is ensuring architectures are ready to handle the explosion of connectivity being driven by 5G and IoT. Having the ability to provide unrestrained digital customer experiences using the significant speed increase of 5G is promising to be a game changer in many industries and will alter strategies and customer engagement. Similarly, the continual digitization and connectedness of every device we interact within personal, professional, industrial, or service/utility settings requires a significant architectural strategy to properly address. The volumes, frequency, and security/privacy concerns are unlike anything prior generations or architecture had to address and at Capgemini Invent, we are seeing leading companies invest heavily in these areas for competitive advantages. These new streams of data must be correlated with the aforementioned customer, transactional, and data science elements to provide that sought after 360-degree view of the enterprise.
IT architectures follow a readable pattern of gradual separation of layers and concerns as new technologies evolve (e.g., business services embedded in core platform –> services layers -> APIs -> microservices). Similarly, we are helping our clients completely sever any linkage between the application tier and the compute tier using containerization. In many instances, the agility and scale at which technology architectures can be adopted, evolved, and widely shared will provide competitive advantages. The required speed of development, the pressure to lean-out IT, and need to drive down defects and increase predictability in IT delivery is driving continued investments in DevSecOps and CI/CD. We believe that companies not well on their way to this style of IT operations and are at a clear disadvantage and will struggle for relevancy with customers and partners that expect this degree of automation, predictability, and frequency of new feature introductions.
No longer an afterthought and the domain of a small team of experts, security architecture has rightfully come to the forefront of digital architecture teams. Digital transformation is predicated on trust. Trust of your customer, trust of your associates, trust of your eco-system partners. The concerns of security, privacy, and data protection must be architected into solutions early and cannot be considered a standalone domain in the world of digital. After all, what’s more annoying than continual asks for reauthentication as we navigate a mobile app across service moments?!
High-performing digital architecture teams are investing heavily in the foundational security technologies that provide the required degree of protection and risk mitigation for the company. Of course, there is a tight partnership required with the CISO organization to ensure coordination across security strategies, security architecture, security engineering, and security operations.
In certain industries and key customer moments, well architected and marketed security capabilities can even be a competitive advantage. Customers are often willing to pay more or take more time in a transactional moment when dealing with very sensitive personal data, health data, or financial data. This is where investments in security architectures can empower digital transformations and not only be thought of as GRC concern.
Realizing the disruptive power – and immense promise – of digital puts the entire enterprise in focus. Successful digital transformation requires a comprehensive approach that blends both outside-in and inside-out perspectives of the enterprise, stakeholders, and the supporting technologies and data. Organizations that prioritize digital transformation are constantly evolving and growing to meet the changing business landscape that surrounds them. They are able to find new sources of value and create the types of experiences that will accelerate them into the future. Digital transformation involves many disciplines, but it has become evident that businesses cannot succeed in digital transformation without investing in digital architecture.