The next BriefingsDirect digital business optimization discussion explores how open standards help support a playbook approach for organizations to improve and accelerate their digital transformation.
As companies chart a critical
journey to become digital-first enterprises, they need new forms of
structure
to make rapid adaptation a regular recurring core competency. Stay with
us as we explore how standards, resources, and playbooks around digital
best
practices can guide organizations through unprecedented challenges --
and allow
them to emerge even stronger as a result.
Listen to the podcast. Find it
on iTunes. Read a full transcript or download a copy.
Here to explain how to architect for ongoing disruptive innovation is our panel, Jim Doss, Managing Director at IT Management and Governance, LLC, and Vice Chair of the Digital Practitioner Work Group (DPWG) at The Open Group; Mike Fulton, Associate Vice President of Technology Strategy and Innovation at Nationwide and Academic Director of Digital Education at The Ohio State University, and Dave Lounsbury, Chief Technical Officer at The Open Group. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.
Here are some excerpts:
Gardner: Dave, the pressure from the COVID-19 pandemic response has focused a large, 40-year gathering of knowledge into a new digitization need. What is that new digitization need, and why are standards a crucial part of it?
Lounsbury: It’s not just digitization, but also the need to move to digital. That’s what we’re seeing here. The sad fact of this terrible pandemic is that it has forced us all to live a more no-contact, touch-free, and virtual life.
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| Lounsbury |
This was always an evolution, and we’ve been working on it for years. But now, this pandemic has forced us to face the reality that you have to adopt digital in order to survive. And there’s a lot of evidence for that. I can cite McKinsey studies where the companies that realized this early and pivoted to digital delivery are reaping the business benefits. And, of course, that means you have to have both the technology, the digitization part, but also embrace the idea that you have to conduct some part of your business, or deliver your value, digitally. This has now become crystal clear in the focus of everyone’s mind.
Gardner: And what is the value in adopting standards? How do they help organizations from going off the rails or succumbing to complexity and chaos?
Lounsbury: There’s classically been a split between information technology (IT) in an organization and the people who are in the business. And, something I picked up at one of the Center for Information Research meetings was, the minute an IT person talks about “the business” you’ve gone off the rails.
If you’re going to deliver your business value digitally -- even if it’s something simple like contactless payments or an integrated take-out order system -- that knowledge might have been previously in an IT shop or something that you outsourced. Now it has to be in the line of business.
Pandemic survival is digital
There has to be some awareness of these digital fundamentals at almost all levels of the business. And, of course, to do that quickly, people need a structure and a guidebook for what digital skills they need at different points of their organizational evolution. And that is where standards, complemented by education and training, play a big role.
Fulton: I want to hit on this idea of digitization versus digital. Dave made that point and I think it’s a good one. But in the context of the pandemic, it’s incredibly critical that we understand the value that digitization brings -- as well as the value that digital brings.
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| Fulton |
We’re seeing that here at Nationwide. We are taking steps to apply digitization internally to increase the productivity of our organization and help us drive the cost down of the insurance that we provide to our customers very specifically. This is in response to the adjustment in the value equation in the context of the pandemic.
But then, the digital context is more about looking externally. Digital in this context is applying those technologies to the customer experience and to the business model. And that’s where the contact list, as Dave was talking about, is so critically important.
There are so many ways now to interact with our customers, and in ways that don’t involve human beings. How to get things done in this pandemic, or to involve human beings in a different way -- in a digital fashion -- that’s where both digitization and digital are so critically important in this current context.
Gardner: Jim Doss, as organizations face a survival-of-the-fittest environment, how do we keep this a business transformation with technology pieces -- and not the other way around?
Project management to product journey
Doss: The days of architecting IT and the business separately, or as a pure cascade or top-down thing; those days are going. Instead of those “inside-out” approaches, “outside-in” architectural thinking now keenly focuses on customer experiences and the value streams aligned to those experiences. Agile Architecture promotes enterprise segmentation to facilitate concurrent development and architecture refactoring, guided by architectural guardrails, a kind of lightweight governance structure that facilitates interoperability and keeps people from straying into dangerous territory.
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| Doss |
Those are some really huge trends and the project-to-product shift is going on in business and IT. These trends have been going on for a few years. But when it comes to undoing 30 or 40 years of project management mentality in IT -- we’re still at the beginning of the project-to-product shift. It’s massive.
To summarize what David was saying, the business can no longer outsource digital transformation. As matter of fact, by definition, you can’t outsource digital transformation to IT anymore. This is a joint-effort going forward.
Gardner: Dave, as we’re further defining digital transformation, this goes beyond just improving IT operations and systems optimization. Isn’t digital transformation also about redefining their total value proposition?
Lounsbury: Yes, that’s a very good point. We may have brushed over this point, but when we say and use the word digital, at The Open Group we really mean a change in the mindset of how you deliver your business.
This is not something that the technology team does. It’s a reorientation of your business focus and how you think about your interactions with the customer, as well as how you deliver value to the customer. How do you give them more ways of interacting with you? How do you give them more ways of personalizing their experience and doing what they want to do?
This goes very deep into the organization, to how you think about your value chains, in business model leverage, and things like that.
One of the things we see a lot of is people thinking about is trying to do old processes faster. We have been doing that incremental improvement and efficiency forever and applying machines to do part of the value-delivery job. But the essential decision now is thinking about the customers’ view as being primarily a digital interaction, and to give them customization, web access, and let them do the whole value chain in digital. That goes right to the top of the company and to how structure your business model or value delivery.
Balanced structure for flexibility
Gardner: Mike Fulton, more structure comes with great value in that you can manage complexity and keep things from going off of the rails. But some people think that too much structure slows you down. How do you reach the right balance? And does that balance vary from company to company, or there are general rules about finding that Nirvana between enough structure and too little?
Fulton: If we want to provide flexibility and speed, we have to move away from rules and start thinking more about guardrails, guidelines, and about driving things from a principled perspective.
That’s one of the biggest shifts we’re seeing in the digital space related to enterprise architecture (EA). Whereas, historically, architecture played a directional, governance role, what we’re seeing now is that architecture in a digital context provides guardrails for development teams to work within. And that way, it provides more room for flexibility and for choice at the lower levels of an organization as you’re building out your new digital products.
Doss: The days are over for “Ivory Tower” EA – the top-down, highly centralized EA. Today, EA is responding to right-to-left and outside-in versus inside-out pressures. It has to be more about responding, as Mike said, to the customer-centric needs using market data, customer data, and continuous feedback.
EA is really different now. It responds to product needs, market needs, and all of the domain-driven design and other things that go along with that.
Lounsbury: Sometimes we use the term agile, and it’s almost like a religious term. But agile essentially means you’re structured to respond to changes quickly and you learn from your mistakes through repeatedly refining your concepts. That’s actually a key part of what’s in the Open Agile Architecture Standard that Mike referred to.
The reason for this is fundamental to why people need to worry about digital right now. With digital, your customer interface is no longer your fancy storefront. It’s that black mirror on your phone, right? You have exactly the same six-by-two-and-a-half-inch screen that everybody else has to get your message across.
Internally that means as a business that you have to have your team structured so they can quickly respond to the marketplace, and not have to go all the way up the management chain for some big decision and then bring it all way back down again. You’ll be out-competed if you do it that way. There is a hyper-acceleration to “survival of the fittest” in business and IT; this has been called the Red Queen effect.
That’s why it’s essential to have agile not as a religion, but as the organizational agility to respond to outside-in customer pressures as a competitive factor in how you run your business. And, of course, that then pulls along the need to be agile in your business practices and in how you empower your agile teams. How do you give them the guardrails? How do you give them the infrastructure they need to succeed at all of those things?
It’s almost as if the pyramid has been turned on its head. It’s not a pyramid that comes down from the top of some high-level business decisions, but the pyramid grows backward from a point of interaction with the customers.
Gardner: Before we drill down on how to attain that organizational agility, let’s dwell on the challenges. What’s holding up organizations from attaining digital transformation now that they face an existential need for it?
Digital delivers agile advantage
Doss: We see a lot of companies try to bring in digital technologies but really aren’t employing the needed digital practices to bring the fuller intended value, so there’s a cultural lag.
The digital technologies are often used in combination and mashed up in amazing ways to bring out new products and business models. But you need digital practices along with those digital technologies. There’s a growing body of evidence that the difference between companies that actually get that are not just outperforming their industry peers by percentages -- it’s almost exponential.
The findings from the “State of DevOps” Reports for the last few years gives us clear evidence on this. Product teams are really driving a lot of the work and functionality across the silos, and increasingly into operations.
And this is why the standards and bodies knowledge are so important -- because you need these ideas. With The Open Group DPBoK, we’ve woven all of this together in one Emergence Model and kept these digital practices connected. That’s the “P” in DPBoK, the practitioner. It’s those digital practices that bring in the value.
Fulton: Jim makes a great point here. But in my context with Digital Executive Education at Ohio State, when we look at that journey to a digital enterprise we think of it in three parts: The vision, the transformation, and the execution.
But you also have to set the vision upfront. You have to be able to envision, as a leadership team of an organization, what a digital enterprise looks like. What is your blueprint for that digital enterprise? And so, you have to be able to figure that out. Then, once you have aligned that blueprint with your leadership team, you have to lead that digital transformation journey.
And that transformation takes you from the vision to the execution. And that’s what I really love about The Open Group and the new direction around an open digital portfolio, the portfolio digital standards that work together in concert to take you across that entire journey.
But then, how do you actually deliver the capabilities and practices, and uplift the organization with the new skills to function in this digital enterprise once you get there? And you can’t wait. You have to bring people along that journey from the very start. The entire organization needs to think differently, and it needs to act differently, once you become a digital enterprise.
Lounsbury: Right. And that’s an important point, Mike, and one that’s come out of the digital thinking going on at The Open Group. A part of the digital portfolio is understanding the difference between “what a company is” and “what a company does” -- that vision that you talked about – and then how we operate to deliver on that vision.
Dana, you began this with a question about the barriers and what’s slowing progress down. Those things used to be vertically aligned. What the business is and does used to be decomposed through some top-down, reductionist, refactor or delegate, decompose and delegate of all of the responsibilities. And if everybody does their job at the edge, then the vision will be realized. That’s not true anymore because of the outside-in digital reality.
A big part of the challenge for most organizations is the old idea that, “Well, if we do that all faster, we’ll somehow be able to compete.” That is gone, right? That fundamental change and challenge for top- and middle-management is, “How do we make the transition to the structure that matches the new competitive environment of outside-in?”
“What does it mean to empower our team? What is the culture we need in our company to actually have a productive team at the edge?” Things like, “Are you escalating every decision up to a higher level of management?” You just don’t have time for that anymore.
Are people free to choose the tools and interfaces with the customers that they believe will maximize the customer experience? And if it doesn’t work out, how do you move on to the next step without being punished for the failure of your experiment? If it reflects negatively on you, that’s going to inhibit your ability to respond, too.
All of these techniques, all of these digital ways of working, to use Jim’s term, have to be brought into the organization. And, as Mike said, that’s where the power of standards comes in. That’s where the playbooks that The Open Group has created in the DPBoK Standard, the Open Agile Architecture Standard, and the IT4IT Reference Architecture actually give you the guidance on how to do that.
Part of the Emergence Model is knowing when to do what, at the right stage in your organization’s growth or transformation.
Gardner: And leading up to the Emergence Model, we’ve been talking about standards and playbooks. But what is a “playbook” when it comes to standards? And why is The Open Group ahead of the curve to extend the value when you have multiple open standards and playbooks?
Teams need playbook to win
Lounsbury: I’ll be honest, Dana, The Open Group is at a very exciting time. We’re in a bit of a transition. When there was a clear division between IT and business, there were different standards and different bodies of knowledge for how you adapt to each of those. A big part of the role of the enterprise architect was in bridging those two worlds.
The world has changed, and The Open Group is in the process of adapting to that. We’re looking to build on the robust and proven standards and build those into a much more coherent and unified digital playbook, where there is easy discoverability and navigability between the different standards.
People today want to have quick access. They want to say, “Oh, what does it mean to have an agile team? What does it mean to have an outside-in mindset?” They want to quickly discover that and then drill in deeper. And that’s what we pioneered with the DPBoK, with the architecture of the document called the Emergence Model, and that’s been picked up by other standards of The Open Group. It’s clearly the direction we need to do more in.
Gardner: Mike, why are multiple standards acting in concert good?
Fulton: For me, when I think about why you need multiple standards, it’s because if you were to try to create a single standard that covered everything, that standard would become incomprehensible.
If you want an industry standard, you need to bring the right subject matter experts together, the best of the best, the right thought leaders -- and that’s what The Open Group does. It brings thought leaders from across the world together to talk about specific topics to develop the best information that we have as an industry and to put that into our standards.
But then, what The Open Group is now doing with the digital portfolio is intentionally bringing those standards together to make sure that the standards align. It brings the standards together to make sure that they have the same messaging, that we’re all working on the same definitions, and that we’re all thinking about big, broad concepts together in the same way and then allow us to dig down into the details with the right subject matter experts at the level of granularity needed to provide the appropriate levels of benefits for industry.
Gardner: And how does the Emergence Model help harmonize multiple standards, particularly around the Digital Practitioner’s Workgroup?
Emergence Model scales
Lounsbury: We talked about outside-in, and there are a couple of ways you can approach how you organize such a topic. As Mike just said, there’s a lot of detail that you need to understand to fully grasp it.
But you don’t always have to fully grasp everything at the start. And there are different ways you can look at organizations. You can look at the typical stack, decomposition, and the top-down view. You can look at lifecycles, that when you start at the left and you go to the right, what are all the steps in-between?
And the third dimension, which we’re picking up on inside The Open Group, is the concept of scale through the Emergence Model. And that’s what we’ve tried to do, particularly in the DPBoK Standard. It’s the best example we have right now. And that approach is coming into other parts of our standards. The idea comes out of lean startup thinking, which comes out of lean manufacturing.
When you’re a startup, or starting a new initiative, there are a few critical things you have to know. What is your concept of digital value? What do you need to deliver that value? Things like that.
Then you ideally succeed and grow and then, “Wow, I need more people.” So now you have a team. Well, that brings in the idea of, “What does team management mean? What do I have to do to make a team productive? What infrastructure does it need?”
But you don’t know those things at the start. You do have to know them at the end. What you need to know at the start is that you have a map as to how to get there. And that’s the architecture, and the process to that is what we call the Emergence Model.
It is how you map to scale. And I should say, people think of this quite often in terms of, “Oh it’s just for a startup. I’m not a startup, I’m in a big company.” But many big companies -- Mike, I think you’ve had some experience with this – have many internal innovation centers. You do entrepreneurial funding for a small group of people and, depending on their success, feed them more resources.
So you have the need for an Emergence Model even inside of big companies. And, by the way, there are many use cases for using a pattern for success in how to do digital transformation. Don’t start from the top-down; start with some experiments and grow from the inside-out.
Doss: I refer to that as downscale digital piloting. You may be a massive enterprise, but if you’re going to adapt and adopt new business models, like your competitors and smaller innovators who are in your space, you need to think more like them.
Though I’m in a huge enterprise, I’m going to start some smaller initiatives and fence them off from governance and other things that slow those teams down. I’m going to bring in only lean aspects for those initiatives.
So, all of those things are happening as a company grows and the DPBoK and Emergence Model is great for, “Hey, this is what’s around the corner.”
With a lot of other frameworks, you’d have to spend a lot of time extracting for scale-specific guidance on digital practices. So, you’d have to extract all that scale-specific stuff and it’s a lot of work, to be honest, and it’s hard to get right. So, in the DPBoK, we built the guidance so it’s much easier to move in either direction -- going up- and down-scale digital piloting as well.
Gardner: Mike, you’re on the pointy end of this, I think, in one of your jobs.
Intentional innovation
Fulton: Yes, at Nationwide, in our technology innovation team, we are doing exactly what Dave and Jim have described. We create new digital products for the organization and we leverage a combination of lean startup methodologies, agile methodologies, and the Emergence Model from The Open Group DPBoK to help us think about what we need at different points in time in that lifecycle of a digital product.
And that’s been really effective for us as we have brought new products to market. I shared the full story at The Open Group presentation about six months ago. But it is something that I believe is a really valuable tool for big enterprises trying to innovate. It helps you think about being very intentional about what are you using. What capabilities and components are you using that are lean versus more robust? What capabilities are you using that are implicit versus explicit, and what point in time do you actually need to start writing things down?
At what point in time do you absolutely need to start leveraging those slightly bigger, more robust enterprise processes to be able to effectively bring a digital product to market versus using processes that might be more appropriate in a startup world? And I found the DPBoK to be incredibly helpful and instructive as we went through that process at Nationwide.
Gardner: Are there any other examples of what’s working, perhaps even in the public sector? This is not just for private sector corporations. A lot of organizations of all stripes are trying to align, become more agile, more digital, and be more responsive to their end-users through digital channels. Any examples of what is working when it comes to the Emergence Model, rapid digitization, and leveraging of multiple standards appropriately?
Good governance digitally
Doss: We’re really still in the early days with digital in the US federal government. I do a lot of work in the federal space, and I’ve done a lot of commercial work as well.
They’re still struggling in the federal space with the project-to-product shift.
There is still a huge focus on the legacy project management mentality. When you think about the legacy definition of a deliverable, the project is done at the deliverable. So, that supports “throw it over the wall and run the other way.”
Various forms of the plan-build-operate (PBO) IT organization structure still dominate in the federal space. Orgs that are PBO-aligned tend to push work from left to right across the P, B & O silos, and the space between these siloes are heavily stage-gated. So, this inside-out thinking and the stage-gating also supports “throw it over the wall and run the other way.” In the federal space, waterfall is baked into nearly everything.
Product management, for example, employs a single persistent team that remains with the work across the lifecycle and ties together those dysfunctional silos. Such “full product lifecycle teams” eliminate a lot of the communication and hand-off problems associated with such legacy structures.
The other problem in the federal space with the PBO IT org structure is that the real power resides in these silos and these silos’ management focus is downward into their silo….not as much across the silos; so there are a lot of cross functional initiatives such as EA, service ownership, product ownership or digital initiative that might get some traction for a while but such initiatives of functions have no real buying power or “go/no-go” decision authority so they get squashed eventually by the silo heads, where the real power resides in such organizations.
In the US, I look over time for Congressional, via new laws or Office of Management and Budget (OMB) via policy, to bring in some needed changes and governance about how IT orgs get structured and governed.
Ironically, these two digital anti-patterns also lead to the creation of lots of over-baked governance over decades to try to assure that the intended value was still captured, which is like chasing more bad money after that other bad money.
This is not just true in federal this is also true in the commercial world. Such over-baked governance just happens to be really, really bad in the federal space.
For federal IT, you have laws like Clinger-Cohen, Federal Information Technology Acquisition Reform Act (FITARA), policies and required checks by the OMB, Capital Planning and Investment control, Acquisition Regulations, DoD Architecture Framework, and I could go on -- all which require tons of artifacts and evidence of sound decision making.
The problem is nobody is rationalizing these together… like figuring out what supersedes what when something new comes out. So, the governance just gets more and more un-lean, over-bloated and what you have at the end is agencies are either misguided by out-of-date guidance or overburdened by over-bloated governance.
Fulton: I don’t have nearly the level of depth in the government space that Jim does, but I do have a couple examples I want to point people to if they are trying to look for more government-related examples. I point you to a couple here in Ohio, both Doug McCollough and his work with the City of Dublin in Ohio. He’s done a lot of work with digital technologies; digital transformation at the city level.
And then again here in Ohio – and I’m just using Ohio references because I live in Ohio and I know a little bit more intimately what some of these folks are doing -- Ervan Rodgers, CEO of the State of Ohio, has done a really nice job of focusing on digital capabilities and practices to build up across state employees.
The third I’ll point to is the work going on in India. There’s been a tremendous amount of really great work in India related to government, architecture, and getting to the digital transformation conversation at the government level. So, if folks are interested in more examples, more stories, I’d recommend you look into those three as places to start.
Lounsbury: The thing, I think, you’re referring to there, Mike, is the IndEA India Enterprise Architecture initiative and the pivot to digital that several of the Indian provinces are making. We can certainly talk about that more on a different podcast.
Similarly, in India, the utter need to deliver to a very diverse, large rural population, and grow that needed digitization. And certainly, the U.S. federal sector and the defense sector are very aware of the disparity. And I think, things like, the defense budget changes or changes in mission will drive some of these changes that we’ve talked about that are driven by the pandemic urgently in the commercial sector.
So, it will happen, but it is, I’ll agree with Jim, probably the most challenging ultimate top-down environment that you could possibly imagine doing a transformation.
Gardner: In closing, what’s coming next from The Open Group, particularly around digital practitioner resources? How can organizations best exploit these resources?
Harmony on the horizon
Lounsbury: We’ve talked about the evolution The Open Group is going through, about the digital portfolio and the digital playbooks having all of our standards speak common language and working together.
A first step in that is to develop a set of principles by which we’re going to do that evolution and the documents is called, Principles for Open Digital Standards. You can get that from The Open Group bookstore and if you want to find it quickly, you go to The Open Group’s The Digital-First Enterprise page that links to all of these standards.
Looking forward, there are activities going on in all of the forums of The Open Group and the forums are voluntary organizations. But certainly, the IT4IT Forum, the Digital Practitioner Workgroup, in these large swaths of our architecture activity they are working on how we can harmonize the language and bring common knowledge to our standards.
And then, to look beyond that, I think we need to address the problems of discoverability and navigability that I mentioned earlier to give that coherent and an easy-to-access picture of where a person can find out what they need when they need it.
Fulton: Dave, I think probably one of the most important pieces of work that will be delivered soon by The Open Group is putting a stake in the ground around what it means to be a digital product. And that’s something that I don’t think we’ve seen anywhere else in the industry. I think it will really move the ball forward and be a unifying document for the entire open digital portfolio.
And so, we have some great work that’s already gone on in the DPBoK and the Open Agile Architecture standard, but I think that digital product will be a rallying cry that will make all of the standards even more cohesive going forward.
Doss: And I’ll just add my final two cents here. I think a lot of it, Dana, is just awareness. People need to just understand that there’s a DPBoK Standard out there for digital practitioners.
If you’re in IT, you’re not just an IT practitioner anymore, you’re using digital technology and digital practices to bring lean, user-centric value to your business or mission. So, digital is the new best practice. So, there’s a framework in a body of knowledge out there now that supports and helps people transform in their careers. The same thing with Agile Architecture. And so it’s just the awareness that these things are out there.
Lounsbury: And if I can pick up on that awareness point, I do want to mention, as always, The Open Group publishes the standards as freely available to all. You can go to that digital enterprise page or The Open Group Library to find these. We also have an active training ecosystem that you can find these days. Everybody does that digital training.
There are ways of learning the standards in depth and getting certified that you’re proficient in the knowledge of that. But I also should mention, we have at least two U.S. universities and more interest on the international sector for graduate work in executive-level education. And Mike has mentioned his executive teaching at Ohio State, and there are others as well.
Gardner: Right, and many of these resources are available at The Open Group website. There are also many events, many of them now virtual, as well as certification processes and resources. There’s always something new, it’s a very active place.
Listen to the podcast. Find it on iTunes. Read a full transcript or download a copy. Sponsor: The Open Group.
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