When a health insurance company launches an app that allows members to print their insurance card or refill prescriptions, the outcome is digital business optimization that improves the existing business. But if that same company launches a telehealth arm, its ambition would be toward digital business transformation through a fully digitized product. Whether the end goal is to optimize or transform, organizations need a digital business technology platform (DBTP) to enable it.
A DBTP provides the architecture to interlace and orchestrate five overlapping technology sub-platforms critical to digital business. The five include: information systems; customer engagement; data and analytics; Internet of Things (IoT); and partner ecosystems.
Download now: Building a Digital Business Technology Platform
With a DBTP architecture to connect and integrate these distinct digital capabilities, organizations are able to sense activity from stakeholders — such as customers, partners, internal employees or things — decide what to do about it, and act on the information. In the case of a health insurance company, incoming data might calculate that the member is nearly out of medication (sense) and renew the prescription (decide and act), or it might sense through a personal fitness device that a member is having a health issue (sense) and suggest a telehealth appointment (decide and act). Both use cases require a different set of applications and tools, yet they all integrate with and flow through a DBTP.
But how do you build one? You’ll need a clear digital ambition: are you trying to optimize what you already do or transform it? Digital business leaders also need to set clear expectations. Building a DBTP is a long-term, multiphase project that depends on consistent iteration to scale and improve to keep relevant. Once the ambition and vision are in place, digital business leaders can work through the following 10 steps.
Download IT roadmap: Digital Business Transformation
10 Steps to Building a Digital Business Technology Platform
- Vision and capabilities. The organization’s digital ambitions translate into a digital vision and supporting capabilities for delivering value to customers. You’ll need to decide on the capabilities, the order in which you plan to develop them and the timeline over which you’ll progress. Sequencing helps set the expectation that this is a long-term, multi-part journey, the first major destination along which is a minimum viable product (MVP) that demonstrates progress and allows you to test that the DBTP works.
- Sequenced goals. Define the diverse metrics to measure success. Some will be traditional enterprise key performance indicators that quantify operational or financial performance improvement; others will be digital business metrics that indicate progress toward the organization’s ambitions.
- Multi-year budget. Digital business is not a project that begins and ends, but a capability that needs to be funded every year. The Gartner 2020 Building Digital Platforms Survey finds that 80% of companies with more than $5 billion in revenue spend more than $5 million a year on digital business software and professional services. Ninety percent of companies with $1 billion to $5 billion in revenue spend more than $2 million annually.
- Create organization. Seventy-five percent of global companies have at least 50 people working on their digital business platform. These are cross-functional teams that include software architects, cloud experts, data analysts and business application specialists, among others. Only 45% of organizations place the DBTP team under the umbrella of IT. Assign in-house people who are willing to upskill to develop the capabilities you need, and supplement with external resources.
- Engage service provider. Almost 100% of organizations work with a service provider to develop their DBTP. Organizations commonly use providers to help select technology (70%), define ambition (66%) and for long-term development and maintenance (64%).
- Plan for skills development. Service providers eventually leave, and when they do, in-house teams need to be prepared to take over. Start by inventorying the needed skills, how many people need them and by when, and where in-house gaps lie. Decide which skills you will train and which you need to hire, and build ongoing development and learning into employees’ weekly work rhythms.
- Select technologies. Organizations that report greater success realizing their digital business ambitions use a larger number of new technologies and methods. Examples include cloud-native application architecture, Agile/DevOps application development methods, event-driven architecture, and so on. Most DBTPs are built in the cloud, partly to minimize upfront costs and allow the platform to go live quickly with limited budget. Costs increase as the capabilities (and value) increase.
- API and integration strategy. The variety of applications systems and technology capabilities that flow into and out of the DBTP requires effective and secure integration. Many organizations achieve this with a mesh app and service architecture (MASA), which includes an outer layer of APIs to connect to user-facing applications and manage traffic, and inner APIs to connect application systems and microservices to each other inside the platform.
- Develop and deploy the MVP. Once the architecture is set, the teams can begin building the capabilities. You may assign feature sets and stories to different groups to work on simultaneously. Prioritize capabilities that can be developed and tested quickly under real-world conditions — even before the team has developed a complete MVP.
- Scale and expand. With the value proven, the team can build out the platform capabilities defined as critical for fulfilling the organization’s digital ambition. Regularly revisit and redefine the ambition and related capabilities to adapt to changes in the market. Relevant technologies will also improve, exposing the need to revise aspects of the original architecture.
Download now: Create a Successful API-based Ecosystem