If you are building a home addition, you would not have a contractor begin demolition where you think you want the addition to go, construct what seems to make sense and hope the project will meet your expectations. You would hire an architect to obtain or recreate plans for the existing structure and draw up plans for the new configuration. Then, she would create a work plan for how the project would be executed, based upon the materials, techniques, equipment, and personnel to be used.
Risk management would inform the design of the addition, the workplan, and specify the risks that should be monitored throughout the project.
There are many parallels between building an addition and evolving your company – while a home renovation is a discrete project, evolving your company should be a continuous and perpetual process. The risk controls you employ to ensure the desired results of your construction project cease when it’s completed. As you evolve your company, risk management must be continuously reviewed, and revised as the circumstances change. However, if your capacity to update your risk management plan cannot keep up with the evolution of your company, there will be gaps that could trigger negative outcomes or missed opportunities.
In my previous article I asserted that Agile Enterprise Risk Management is essential for companies to be sustainable. Below, I will examine the elements that are required.
Architecture—the Blueprints for Everything
In your home remodel, the building plans document all the components and systems, and how they interact— weight-bearing walls, HVAC, electrical and plumbing systems as well as where the windows and doors are. Similarly, Enterprise and Business Architecture show the structure of your company in terms of Value Streams, Capabilities, Processes, Systems, People, and how they all relate and interact. Technical Architecture illustrates your infrastructure, applications, data repositories, structures, flows and other relevant elements. Both home remodeling and enterprise evolution require “as-is” and “to-be” blueprints as input to planning how to evolve efficiently and safely.
Transformation vs. Change
Many people use these terms interchangeably, but I differentiate them. Change is, well, change. Companies often just react to threats, needs or opportunities by changing, ad-hoc. Technical Debt is caused by compromised design from rushed development that creates a need for excessive effort or cost to evolve systems, downstream. Change may relieve immediate pressures but leave Technical Debt in its wake. Transformation is an intentional, choreographed process by which the enterprise’s architecture is transitioned to a new state. Transformation is performed mindfully, with consideration for the interrelationships of elements of the architecture, with intent to balance benefits, costs, and risks and to minimize negative side effects, such as Technical Debt. Ultimately, transformation reduces short- and long-term risks, as compared with change.
Digital Transformation is currently a hot topic and widely misunderstood. The ultimate goal of Digital Transformation is to develop the ability to deliver digital services and products on top, alongside or independent of traditional products and services. It is possible to do that by changing, perhaps by bolting new groups and technologies onto the existing enterprise, but that ultimately generates Technical Debt and becomes unsustainable. Transforming, on the other hand, creates a foundation that enables agility and enhances responsiveness, both critical to remaining competitive. To go back to my home renovation example, change is what happens if you let your contractor run your project; transformation is what happens when you have an architect do it.
Cloud and Agile/DevOps—the Toolkit
Cloud-native services are the substrate upon which a digital company should be built. In a world where everything is evolving at a rapid pace, cloud-based services can be transformed, where more traditional infrastructure can only be changed. Cloud-based computing and storage capacities can be morphed, expanded or contracted elastically with little lead time while remaining consistent with the overall architecture, while traditional infrastructure must be expanded in pre-determined chunks, often with significant lead time and long-term commitments. Cloud capabilities can help to turn what might otherwise be a change into a transformation.
Agile and DevOps are techniques and enabling technology to facilitate collaboration between business product owners and developers. Experimentation and rapid serial refinement are critical to delivering digital products and services, Agile approaches and DevOps development practices underlie them.
Risks in building and delivering digital solutions mainly cluster around the balance of achieving velocity and avoiding Technical Debt that ultimately undermines velocity of subsequent development or enhancements. Having a defined architecture and the discipline to evolve via transformation and not change is pivotal to Digital Transformation success and achieving sustainability for your company.
Architecture, Transformation, the Cloud and Agile/DevOps are important elements of successful business transformation and increased agility. It is on these topics, that I will hang the framework of Agile Enterprise Risk Management in future articles.
BIO:
Howard M. Wiener is Principal of Evolution Path Associates, Inc., a New York consultancy specializing in technology management and business strategy enablement. Mr. Wiener holds an MS in Business Management from Carnegie-Mellon University and is a PMI-certified Project Management Professional.
He can be reached at:
howardmwiener@gmail.com
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