Disrupt for Digital Transformation

4/25/2017
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© 2017 FORRESTER. REPRODUCTION PROHIBITED.
Disrupting Your Company to Enable
Sustainable Digital Transformation
Randy Heffner, VP & Principal Analyst
@BizTech21
April 26, 2017

4/25/2017
2
3© 2017 FORRESTER. REPRODUCTION PROHIBITED.
Digital farming = iron + intelligence
Image sources: deere.com, nasa.gov, thevelvetrocket.com, mottmac.com, toshiba.com, tradingcharts.com, mirageforum.com
71
%
John Deere’s growing value proposition
Reference: June 2015, “How APIs Reframe Business Strategy” Forrester report
Tractors
Data shared across:
• John Deere Operations Center
• Equipment dealers
• Agribusiness providers
• Crop scientists
• Crop insurance agents
• Bankers
• Government agencies
• More
Equipment
sales/service
Equipment
optimization
Farm optimization
Parts
Dealer
network
Tractors
Parts
Dealer
network
IoT APIs
Connected
systems
Tractors
Parts
Dealer
network
IoT APIs
Connected
systems
MyJohnDeere.comSensors
(soil, satellite, etc.)
APIs

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3
Ecosystems can do what you can’t
Reference: September 2015 “Monetizing APIs: Help Execs Think Bigger, And Drive More Revenue” Forrester report
A simple mobile
web app turns
into many rich
mobile apps
Almost for free
Digital business = interlocking ecosystems
Source: “APIs Underpin a Digital Business Platform” Forrester report
Customers’
Ecosystems
Your
ecosystem
Partners’
ecosystems
New, adjacent
ecosystems

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4
Digital transformation is the new norm
Source: Forrester Business Technographics® Business and Technology Services Survey, 2016
Base: Services decision-makers at enterprises globally, n=2810
When told. . .
• “A digital transformation fundamentally changes the way
customers, employees, and partners interact with and generate
value from your company.”
. . .71% of decision makers that say:
• We are currently undergoing a digital transformation
• We completed our digital transformation in the past 12 months
71%
12+
months
total
6.5
months
total
How to transform fast? Agile is not enough
› First time around the track...
› Second time around the track...
› What should have been:
Source: “Agile-Plus-Architecture: Embrace The Oxymoron” Forrester report
6 months rapid delivery
6 months architecture + re-delivery
6 months rapid delivery
2 weeks
planning
Architecture in parallel

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Digital business needs sustainable business agility
› Sustainable business agility:
• Continually making one business change after another, large or small...
• ...in ways that make future changes easier...
• ...or at least in ways that do not adversely affect the ability to make future changes.
Source: “Architect For The Next Digital Decade” Forrester report
2 steps forward
Agile alone Agile-plus-architecture
2 steps forward
1 back
1 back
2 steps forward
3 steps forward
4 steps forward
1 back
1 back
2 steps forward
Business requirements documents are dead
Which means:
Every business is a digital business, for better or for worse.
Which means:
You need a model for holistic digital business design.
Business
It’s not two things
+ Technology Digital business
It’s one thing
Requirements
document

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6
Digital business requires holistic business design
Operations
statement
Balance
sheet
Cash flow Market
stature
Your organization
• People
• Process
• Teams
• Finances
• Suppliers
• Partners
• Resources
• Software
• Information
• Technology
Services and products
delivered
Top-level business outcomes
Constant interplay
between the two
Soft metrics –
indicators of
future
financial
outcomes
Digital business design  business implementation
Source: “Business Capability Architecture: Use Business Outcomes To Drive Technology Strategy” Forrester report
Digital business
Digital business design
ERP
CRM
SCM
OrdersIoT
Analytics
Mobile
Billing
Products
Old target:
collection of applications
New target:
business implementation
Corporate management
Product innovation
Customer
serviceManufacturing
Sales
Application portfolio
Applications
are pushed to a
lower level of
abstraction.

4/25/2017
7
O2 Ireland reaches new markets with its billing
Source: “Digital Business Design Sharpens Organizations’ Competitive Posture” Forrester report
› Deliver in days not
weeks
› New revenue:
• Toll road company
lets drivers charge
tolls to telco bill
Service consumers
Integration technologies / atomic services
Core applications
Billing
Customer
systems
. . .
Service
configuration
SOA-API business services
(e.g., BillingCharge, ServiceProvisioning)
Networks
Internal solutions External APIs
Business
policies for
service use
Application
adapters
Process
orchestration
. . .ESB
Toll road firm
Corporate management
Product innovation
Customer
serviceManufacturing
Sales
Digital business design considers everything
Source: “Business Capability Architecture: Use Business Outcomes To Drive Technology Strategy” Forrester report
Business design drives implementation of:
 A complete, running, measured part of your business.
 An integrated, operational, instrumented combination of
people, process, technology, and resources (physical and
digital) that fulfill the definition of a business capability.
Balance sheet
Statement of
operations
Cash flow
Market
stature
Physical
world
Digital
world
Trucks
Business
partners
Financing
Web pages
Legacy apps
RFID
Employees
Sensors
Unified
communications
SaaS
BPM
APIs-SOA
Enterprise
data
Regulators
Products
Digital home
Mobile
devices
Customers
Factories
Email
New custom
apps
Event
processing
Embedded
analytics
IaaS
Contracts
Outsourcing
arrangements
Geography
Skills
Policy
IoT

4/25/2017
8
Fidor Bank curates an ecosystem of start-up services
Source: Fidor Bank
Social
lending
Social
investing
Crowd-
funding
Payments
Precious
metals
Virtual and
crypto currencies
Digital business  business building blocks
Source: “Digital Business Design Is The New Integration” Forrester report
Digital
business
Digital
business
Digital business
design
Business
building blocks
Role-based workspaces
Monitored process flows
SOA and API services
Virtualized data views
Policies, events, rules,
collaborations, analytics
B2B connections and flows
User roles
Business processes
Business transactions
Business data
Insight & optimization
Business relationships

4/25/2017
9
Digital business needs a platform
Customers’
Ecosystems
Your
ecosystem
Partners’
ecosystems
New, adjacent
ecosystems
Digital business platform
A modular technology base, built around
business APIs, designed for rapid
reconfiguration of business models,
processes, and ecosystems
A platform of platform for business building blocks
Insight engines
Structured,
unstructured,
semantic, cognitive,
and contextual
analysis delivered
where and when
insight is needed for
human and automated
decisions
Business processes
Configurable,
monitored, controlled,
auditable flows of
work across roles and
ecosystems
Business transactions and queries
Open, secure, managed, API access to business
transactions, queries, content, products, and data
Business content
Virtualized internal and external data from
customers, transactions, processes, physical assets,
data providers, and more
User experience and IoT
Interface to the physical world:
a) Unified, multitouchpoint workspaces for humans;
b) Monitoring and control embedded in customers’
and users’ environments via IoT

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Evolutionary, success-first, street-level strategy
Reference: "Build Your Stepwise Strategy For Business-Centered EA“ Forrester report
Degree of technology completeness
Degreeofbusinessimpactsought
Path with
each
approach
Technology-
first approach
Success-first
approach
Strategic
vision
Street-level
starting point
Street-level strategy:
• Provides a
lightweight vision for
guidance (strategy)
• Builds toward the
vision with each
business
improvement (street-
level)
• Is very careful with
large upfront
technical outlays
Agile-plus-architecture guides delivery
Source: “Agile-Plus-Architecture: Embrace The Oxymoron” Forrester report
Program C
inception
Program
increment 1
Program
increment 2
Program
increment n. . .Program B
inception
Program
increment 1
Program
increment 2
Program
increment n. . .Program A
inception
Program
increment 1
Program
increment 2
Program
increment n. . .
Sprint  zero
Architecture
planning
Sprint  1:
Feature dev
Sprint  2:
Feature dev
Sprint  n:
Feature dev. . .
Architecture
sprint
Architecture
sprint
Sprint  zero
Architecture
planning
Sprint  1:
Feature dev
Sprint  2:
Feature dev
Sprint  n:
Feature dev. . .
Architecture
sprint
Sprint
team 1
Sprint
team n
. . .
Program
increment
Architecture direction
set and updated
Enterprise architecture
• High‐level direction
• Broad context setting
• Agility planning
• Architecture debt monitoring
• Business architecture
• Information architecture
• Application architecture
• Infrastructure architecture
• Cross‐cutting architectures
(security, integration, etc.)

4/25/2017
11
Agile delivery project
======================
Continuous delivery stream
Solution
architect
======================
Solution
architect
Use architect collaboration to evolve portfolios
Source: “Best Practices For Agile-Plus-Architecture” Forrester report
Domain
architect
Enterprise
architectOther
domain
architects
======================
Solution
architect
Multilevel architect collaboration
• Sprint zero, revisited each sprint
• Prioritized for architecture significance
• Infused with patterns
• Tension between intentional and emergent arch
Saxo Bank
Trading platform
Saxo Bank’s open business
Source: “How APIs Reframe Business Strategy” Forrester report
APIs
Institutional customers
Web
Custom
UX
White
label UX • Core business
capability
becomes a
revenue
source.
• Innovation is
decoupled.
• The bank
wins from
customer
innovation.
The shift
• What is the
bank’s key
value-add?
• Its trading
platform? Its
trading UX?
Both?
• From where
will the next
unbundling
come?
The questions
“If we don’t disrupt our own business, then
someone else will — out of the blue.”
— Ashley Latham, CIO, Saxo Bank
• Loosely-
coupled
strategies for
each asset
and capability.
• API-enable
more and
more of them.
• Disrupt where
possible,
react when
needed.
The strategy

4/25/2017
12
Forrester recommendations
Treat digital transformation as a Copernican shift
Trash requirements in favor of digital business design
Build from a digital business vision, execute from street-level
FORRESTER.COM
Thank you
Randy Heffner
rheffner@forrester.com
@BizTech21

Disrupt for Digital Transformation

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