Recently, I got to sit at the font of wisdom which is Jeanne Ross, and get her view into digital disruption and the role of Enterprise Architecture in enabling firms to respond. I am going to summarize her main points here which I hope will be as useful to you as it was for me.
Jeanne, Research Director and Principal Research Scientist, MIT Sloan School of Management, started her talk by saying that she has a passion for Enterprise Architecture. And she said for me and for you, as the digital economy has arrived, I have felt this was our moment. We were going to have integrated channels, seamless end-to-end transactions, real understanding of customer data, and real tight security. “And this of course means architecture”. And she in jest says that she was hoping that the whole world had come to this very same conclusion. Clearly, she said, it hasn’t happened yet but Jeanne importantly believes with the march to becoming digital, it will happen soon.
Success in the digital economy is not guaranteed
Jeanne says one thing is becoming increasingly clear–enterprises will not be successful if they are not architected to execute their firm’s business strategies. At the very same time, she has found with the companies (existing successful enterprises) that she talks to believe their success is not guaranteed in the digital economy. Given this, Jeanne decided to research what incumbent enterprises actually look like that have taken concrete steps to respond to the digital economy’s mandates. The 27 companies :
She found that digital strategies were inspired by the capabilities of powerful readily available technologies including things like social, mobile, analytics, cloud, and internet of things. Digital strategies were forcing companies around a rallying point but surprisingly there was not much distinction behind the rallying point more than, “I want to be the Amazon or Uber of my industry”. But Jeanne claims this is okay because competitive advantage is not going to be about strategy but instead about execution. And being the best at execution is going to eventually take you in a different direction than other market participants.
At this point, Jeanne stressed that there is no competitive advantage in a single capability. This is why Uber has so much competition. But for established companies, advantage will come from an integrated established set of capabilities. “Competitive advantage will come from taking capabilities that others may or may not have and integrating them in ways that make something extraordinarily powerful”. This in Jeanne’s mind is how established companies can best startups because as we know, startups “can only do one thing well”. Integrating business capabilities provides a whole value proposition that is hard for others to copy.
Jeanne says that there is one more thing that existing companies need to get good at. They need to become responsive. Startups are constantly monitoring and learning what to do next. Think about Christopher Columbus and what an established company and a startup would do. The startup would pivot and learn how to do something different.