In this week’s issue, I’m going to show you how you can go about for Digital Business Architecture of an enterprise from scratch.

If you follow this blueprint, you’ll increase your chances dramatically to demonstrate clarity and best-in-class thinking for Digital Business.

Unfortunately, most people take Digital business architecture for granted – the same standard one-size thinking for all customers without realizing the potential of this.

I call this Digital Business Architecture 101. It is the foundation of everything else we do later.

Know The industry

An important part of a Digital Business Architecture is having a strong outlook of the industry you are working in.

That means you are going to have a good orientation of the industry and the players within it.

Every industry goes through a stage of being born through some innovation, then through a phase of growth till maturity when growth slows down. Eventually, the industry contracts paving way for new types of services, and products. In a way industry is re-born.

Ask yourself these questions-

At what stage is this industry?
What is the history of the industry?
Which are the major players?
Who are the leaders in market share in the industry?

Know Your Customer

Next, know your customer company very well. Depending on at what stage a company enters the industry, it creates a strategy for entry, growth, and sustaining the market share.

Cost leadership, innovation, differentiation, focusing on a specific customer segment, Merger & Acquisition – a company has many ways to capture value in the industry.

Ask yourself –

What is your customer good at?
Is your customer a cost leader or an innovation leader?
What is your customer’s focus – Customer, Product, Platform?
Is your customer targeting a special segment of customers?
How does your customer differentiate their products and services?
How much is the business traffic?
Has your customer organization grown through M&A over the years?
What is the goal of the company? (Reaching X by the year Y)

Know Technology Leverage in the Industry

Once you know the industry and the customer organization, figure out what is the role of technology in the industry and what problem of the industry is solved by digital solutions.

Going by research findings, Google & Amazon are in all major industries – all by themselves or through venture investments. Apart from them, there are tech players entering into industries, traditional leaders are transforming & making partnerships with technology companies.

The Digital business employs technology primarily for three benefits:

Improve customer experience and provide offerings to solve customer problems
Improve the efficiency of operation and reduce efforts and costs
Explore new business models and monetize data, and ecosystems in as many ways as possible

So, ask yourself these questions

What is the role of digital solutions in the industry? (possible areas: aggregator, marketplace etc)
Is there a customer experience leader employing digital solutions?
Is there an aggregator/data player in the industry?
What is the strategy of Big Tech companies for that industry?
What are the new tech startups focusing on the industry
How are traditional leaders responding with their digital strategy?

Visualize the end-state of your Customer

As you have looked into the industry, technology leverage in the industry, and have known your customer, it’s time to visualize the activities w.r.t. generation of value.

You want to lay out all the processes from handling basic raw materials through production, distribution, and sales to end-customer usage & disposal of the product. In other words, we focus on the value chain of the industry.

Given an organization’s capability and appetite, the organization can focus on end customers or production or distribution. Sometimes, all of them. Typically, over a period of time, organizations try to build new capabilities and move to the most profitable segment of the value chain which again is typically near the end-customer who pays for the consumptions of the products/services.

Now, for your customer organization, to understand the operations of your customer better under the hood of the above value chain, you select 3-5 key business journeys –

1 business journey – from Product development
1 business journey – from Sales
1 business journey – from Servicing
1 business journey – from Partner operations
1 business journey – one of the most critical business journeys not covered above.

Now your goal is to kick in design thinking to visualize the current state of the business journeys and also to pain the end-state of these journeys. While doing this design thinking, reflect on the industry analysis and adopt some of the practices of the best-in-class players, the key successful digital initiatives taken by competitors.

As an Architect, you would then get into the creation of Service blueprints to depict the interaction of different layers of the enterprise (Channels, Services, Enterprise Apps/Platforms, Data) and the potential end-state of this interaction to realize the key business journeys (designed & thought above).

Here too, ask yourself a few questions

Have you looked at the typical end-customer journeys beyond your business where your offering can be inserted naturally to solve customer problems? (For example – no customer looks for a loan, a customer finds out a house and then the financial means to buy it)
How the end customer experiences will be improved (from the current state)?
Are you adopting any elements from the key business journeys of the best-in-class players? The tech players? the tech start-ups?
Have you thought of leveraging data & analytics in the business journeys?
Will the reimagined journeys contribute to capturing more behavioral data from customers?
Have you established synergy & looked at partnerships with any of the tech players in your industry?
That’s it – you have Service Blueprint with digital initiatives for the key business journeys of the enterprise.

To Conclude:

The Business Architecture of Digital Business separates the winners from the also-runs.

The above outline is a proven, tested blueprint that has worked for me in projects, programs, and proposals for years.

Every time there is a significant business proposition to look at (new transformation initiative, bringing a new offering in the market, leveraging data strategically etc), a rapid iteration of the steps will give you insights that otherwise will be lost.

If you already have a process to think and visualize the architecture of Digital Business, plug in the above steps to make it more robust.

Well, that’s all for today. Digital Business Architecture 101.

Till, next week.