Too often do businesses rely on their IT teams to come up with the goods in order to solve a specific business issue, even if it means buying a whole new enterprise application to do it. The goal might be to capture and retain market share, or boost sales in a particular area, which is fine.
An IT-led approach can provide short-term practical solutions to business threats. However, in reality it frequently fails to deliver adequately because it requires the business to wrap itself around the technology, rather than the other way round. As a result, there is often a gap between what the business wants and what the business actually gets.
Meanwhile, businesses need to respond faster than ever. Customers are now driving the change in all sectors, requiring high levels of service, engagement and product functionality. Every business wants the ‘Apple effect’ but it takes focus and strategy to achieve it.
In order to keep pace with the continuous change in the marketplace, and successfully evolve the business, strategic solutions are required rather than a tactical point-based approach. Deploying a technology ‘life-boat’ – or a team of IT heroes working on a business problem in isolation won’t change the tanker – the business itself – and it’s no longer an option to throw money at the problem.
A new business strategy is needed to cope with the enormity of what is required to keep pace. The answer is to invest in ‘capability’, and not just the next big thing (which in the past might have been a new ERP or information management system).
The new, strategic approach means, for example, dealing with ‘big data’ as a business capability, where ‘capability’ describes what the business is trying to achieve. It’s fundamentally a business-led rather than IT-led activity, and therefore requires a change in tactics and behaviour.
So how does it work in practice? A capability is often derived from the company’s overall business goals, which usually describe a high-level, long-term strategic vision. An example may be to double sales over the next two years. The capability describes ‘how’ the goal can be reached, and the solution would involve multiple business units and close collaboration across the business and between business and IT.
A capability-led strategy is all about identifying where existing business and technology systems could be exploited, and working out the additional systems and technology infrastructures that would need to be adopted to achieve the outcome.
It’s a shift I have enabled in a number of my customers, including several large retailers, manufacturers and telecoms firms. They have gained new efficiencies and agility through having capability-led architectures.
If you are ready to take that step forward, my advice is to keep it simple; don’t over engineer, ensure that all your projects are business-led and driven by business outcomes. Try to spot the synergies across the business; bring IT and business leaders together; and prioritise your project investment based on your new capability strategy.
Capability-based architecture is the architecture of the future. The results include reduced ROI, an agile environment that can respond well to change, and the end of IT-led business decisions.
Daren Ward is a partner at Glue Reply and leads a team of experienced consultants working with clients such as Sainsbury’s and John Lewis. Daren has a passion for ensuring technology drives the best possible outcome for retailers and consumers alike. Daren has worked in IT for over 20 years. Before joining Glue Reply to head its retail practice, Daren was principal architect at Marks and Spencer where he created the first M&S enterprise architecture and went on to establish a successful business architecture team