Good morning, Good afternoon everyone. Welcome to this work day and IDC webinar adaptable architecture. The backbone of digital business models. I'd like to begin with a few brief introductions. I'm Kate Andrews. I'm from work day and I'm delighted to be joined by a very distinguished trio from both IDC and here at work day. Even just a moment to Phillip Carter from IDC's chief analyst Europe, Philip drives innovation in new research topics and deliverables, promoting collaboration and knowledge sharing. He's joined by his colleague Daniel Hernandez, research analyst for IDC's European digital transformation practice. Here. She focuses on assessing the digital impact of emerging technologies and supports IDC's regional and global consulting projects for key clients in the digital transformation space or third member of the panel. For this session is workdays Kelly, IMO senior director of Technology solutions marketing. In this role, she needs a team focused on work days, technology, innovation and platform architecture and how it's supposed. Supports agility for both the business and ITI. Gotta hand over now to fill it to get the session underway. Thanks Phillip. Super thank you very much. Gates Anna very warm. Welcome from my side. I'm very pleased to be able to moderate this session with two esteemed speakers. So thank you both to Kelly as a spokesperson for work work day and also to Danielle will be providing insights from an IDC standpoint now. The objectives of this session or or threefold. And we're going to be first of all, looking at how business models are evolving to deal with this unprecedented uncertainty that we are seeing in the market. But then we're going to look at what this means for technology, leadership and the CIO in particular. And finally, we will discuss the role of application architectures to drive the organizational agility as required in this day and age. Is on some of the tradeoffs that really need to be made in order to make this happen, so some interesting insights coming from the session let me kick things off with, uh, an overview of where we see the new normal, which is all about managing business in unprecedented times of uncertainty and volatility. So our view is that the level of organizational agility that is going to be required to deal with this environment is only going to be possible with a business model that is technology driven or enabled by technology. So organisations that are focusing on digital or focus on digital first are really delivering the financial outcomes that are required. In fact, adcs research shows that digital first organisations are actually twice as profitable. And deliver 8 times the revenue as those of their non digital peers in their respective industries. And this situation really highlights the financial impact of transitioning towards these digital business models as a requirement. So let's discuss what those digital business models look like in a bit more detail. I'm going to come across to you first. Danielle. What are organizations need to do to make this transition? Thank you very much Phil and uh capitalizing on the digital opportunity to make that transition where organizations deliver financial growth, that financial growth that you mentioned that requires a change in the business model, which is reflected by the Infinity loop or the butterfly that you can see at the center of this chart. And if we look at the left wing technology, provides the capabilities to deliberate continuous optimization across the entire value chain. Which reflects on a higher profit and on the right wing technology enables then the Co creation of digital product services on experiences that drive a potential increase of revenue. So these two sites need to really be connected to drive that changing the business model which is driven by different trends across several industries. As you can see at the top of the slide, for example, in retail and hospitality, it's all about customer. Pressures that are pushing for real time personalization in banking is the open banking revolution and the emergence of Fintechs. But regardless stay industry. What digital business models have in common is that they rely on intelligence to analyze real time data from the ecosystem and then transform that information into insights and finally outcomes. Absolutely agree that that that technology underpinning those business models is the norm is becoming the norm. It leads to the role of the CIO in this digital economy and technology leadership in general, and we see three types of CIOs in the industry emerging. So you have the operational CIO focusing on cost and risk. The strategic series that are looking to orchestrate digital transformation across their different respective organisations and then the more disruptive type of series that are really looking to lead digital transformation. Now when we speak to CIOs, what is becoming clear is that as CIOs move towards the right and become more strategic and disruptive that it doesn't mean that they forget the basics because all CIOs really have to provide this highly available it environment that is secure. And delivers on business continuity and then once you've got that platform in place, then you can focus on agility. The insights in the transformation pieces as you move towards more strategical disruptive type of levels. So let me come across back to you, Danielle, based on our research, which of these profiles do most CIOs lean towards at the moment? Well, according to our latest CIO survey, the vast majority, so 73% of the European CIOs are in that center of the chart. Or, uh, the strategic. Part of the The CIOs and by talking to our CIO community, we get the sense that they have as a professional goal to expand the relevance in their organization by orchestrating all of the budgets, the stakeholders. But also, of course, the technologies that are driving digital transformation. Now this means that they will need to evolve and then provide value beyond the traditional area. So responding to service test tickets and keeping the lights on. So the strategic CIOs that we are talking to our focus on supporting the needs and the priorities of what we call the detail dream team which includes the C level executives in finance, in HR, in operations in CX and security becausr, according to IDC's data. If we look at the global tech spend 54% of the technology budgets are owned by it on the broader tech leadership that you can see. At the top right corner of the slide, but the rest 46% of the budgets are spread across the different lines of business. So without an orchestrator digital transformation then becomes a series of isolated projects and the outcome unfortunately is a massive waste of resources in pilots and PLC's that never scale because they are disconnected from the Koratty on the core business. So in the end. Delivering financial growth from digital initiatives requires alignment across the entire detail dream team. Yeah, so that really highlights thanks. Let Daniel. It really highlights the importance of CIO stepping up to the plate and and helping to orchestrate the technologies. The stakeholders in the budgets to scale digital efforts, but let me bring Killian here Kelly. What are you seeing from work? Their customers based on what we've discussed so far in the session? Absolutely thank you, Fellow. At work day, we've also been partnering closely with our customers, and especially their digital dream teams as they navigate in there changing world, and we see that it is really at the center of the impact of change. Today we see companies all over the globe are reimagining the aspects of their operations to drive efficiency in revenue while gaining what we call organizational agility. They're working on driving down operating possible simultaneously, maintaining security availability, and enabling their company to pursue Newark. Opportunities through digital products and services. And that's a goal across all industries. But now we face things like global crises and that increases the challenge exponentially. So while every functional leader needs to think differently in a global crisis, we believe the largest changes facing the CIO after the good news for it meters is that while technology resiliency in a quiet time of crisis is challenging to attain, we believe it's the glue that helps in organization move through the crisis and keeps workers and customers connected to the value of the business. So this is good news for it. But the challenge for it and for the CIO is to maintain a balance. It's really a balance between Business Innovation and business continuity. One of the SuccessFactors that we believe for it to be able to do this. To maintain this balance is to free up resources that are currently challenged with maintaining technical debt and trying to adapt to changes in monolithic siloed systems that have. Riddle integrations on by thinking about investing in architecture, especially adaptable architecture for the systems that run their business operations. We believe that the CIOs and their digital dream teams can find the bandwidth to continue to pilot, test and implement digital innovation for their customers and their employees. So I want to turn it back over to you, fill up and dive into this concept of adaptable architecture. Yeah, thank you Kelly and it is a balancing act indeed. And as you mentioned. This is about developing this adaptable architecture because it does underpin these future business models and from our perspective, technology leaders and CIOs in particular really need to rethink the architecture to support business models of the future and shift to away from that traditional stack that we know well that represents enterprise in application architecture, but more to this type of conceptual model. With enterprise it is modernized aggressively to this intelligent code that you see at the center of this chart, and it's important to note that that core still encompasses infrastructure, middleware, data management and enterprise applications. But those that environment is fundamentally transformed in infused with intelligence to deal with the data pipelines coming not only from internal sources and process is, but increasingly the external triggers and actions from there. Ecosystem which are dynamically evolving as we can see based on this uncertain market that we're dealing with now, this takes the CIO into new space, is increasingly outside of the four walls of the organization and sometimes a little bit uncomfortable spaces as well. So Danielle, just to dig a bit deeper into this. Why don't you take us through some of the key attributes of this architecture at this stage? Sure feel and uh, from our perspective, there are three core attributes to this adaptable architecture. Number one is openness because as we saw at the beginning in the detail, economy value is generated through business agility and this needs external collaboration and also internal collaboration. So the outside in nature of digital business models means that the underlying technology architecture has to. To enable the seamless flow of data across different elements of the value chain. Now #2 is intelligence becausr as the amount of information increases, there is also a need for intelligent systems are capable to transform structure an unstructured data into insights and actions. And finally we have extensibility, which is the number 3 because of the acceleration of the pace of change in the data economy and also. The uncertainty of the current times CIOs have the need for a flexible technology environment where they can extend applications to build unique use cases that will indeed provide the competitive advantage to their business in the here and the now, but also in the future. Yeah, and what I find fascinating with this is when we speak to some of the digital disruptors up there, it's clear they've built their whole business models on this type of architecture. And that brings the exponential effect of the technology to all of the experiences that they delivered to the ecosystem. And the challenge there is at most organisations don't have the luxury of creating Greenfield technology environments. Like the digital disruptors. Do they often having to deal with a lot of legacy and technology debt like or Kelly talked about and that necessitates some trade offs in terms of the journey towards this adaptable architecture that we talked about earlier. And when we look at the two extremes, uhm, and in terms of architectural models out there from an application standpoint. On the one hand side, there's a homogeneous view, which is historically how organisations have automated processes with monolithic applications where the data, the business logic and the user interface we really packaged into the one software suite, and we're focused on the various functioning functions that they were supporting, but these applications were developed in and a pre digital world, and the focus was on application stability and operational efficiency. But it wasn't very adaptable to change, so in terms of new extensions you functionality upgrades that wasn't possible. So in parallel, what a lot of organizations did to cope with the need for speed. Individual economy was to create new apps based on this microservices architecture. This heterogeneous architecture that you can see on the right hand side to deliver digital innovation. Now, IDC predicts a that over the next five years that globally we will create 500 million knew apps and applications across all organizations, which is the equivalent is what we've created over the last 4040 years. So you see this exponential growth in the creation of software and digital innovation capabilities. So that begs the question back to you, Danielle, does this mean that all apps will be created based on this? A heterogeneous microservices type of architecture. Well, fill the short answer is no, because even though you're absolutely right, microservices enable teams to keep up with accelerated pace of innovation and also reduce the barriers to adopt knew technologies. But this model also generates a massive amount of complexity Friday teams that have to deploy secure management retire thousands of microservices, so. Additionally, for mission critical applications, most CIOs don't want to reinvent the wheel and build ERP or finance systems from scratch, and so they normally look in the market for Best of breed applications that ensure stability and efficiency on security. So In summary, CIOs are not trying to choose between a fully homogeneous or a fully heterogeneous tech architecture. But to find a balance that sweet spot that works for them. And that balance will change in different parts of their technology architecture. So if we look at the customer facing capabilities, there is indeed a bigger focus on micro services that are independently diploid. Typically in a hyper scaler environment that allows organizations to scale up, scale down, and fail fast without generating a massive risk of failure across other systems and applications. But as you move. From the edge of the technology architecture into the intelligent or where the application layer is typically internally facing their most organizations, find their sweet spot in a Federated Sass model. And what we call Federated services applications, where the capabilities are did coupled from the underlying technology that makes them run, and that enables organizations to take advantage of continuous innovation. We thought going through you know, as full software update that can generate down time. So as you can see, UM on screen in this model, applications are decomposed in a set of models that are loosely coupled to drive that speed of innovation. But at the same time they have a shared business logic, security model, UX and infrastructure to avoid that intrinsic complexity of the Micro Services an ultimately generate the consistency that is. Certainly needed in mission critical applications on the underlying process is that they support. Very good, yeah. I think that makes it clear that all organisations need to draw their own lines in terms of what they standardized and focus in terms of the homogeneity versus what becomes more extensive or or externally focusing. And based on that more microservices type of architecture. But let me bring Kelly back in here to talk a little bit about the work day view on. Architecture application architecture more specifically. Yeah, thank you. Pull up and at work day you know we were really founded on the idea that enterprise applications needed a new approach and we've been on a journey with that and along the journey we've seen how architecture really matters for sustaining agility across the organization, enabling it and their teams to drive innovation while sustaining what we're calling this technical resilience. That's so important today. So looking at this slide, you'll hear more about the concept further on in the webcast, but the first point I want to make about architecture is that an optimal intelligent core is fundamentally architected for agility, and we believe that starts with being built as a cloud service that provides elasticity for unplanned loads and frees up resources from infrastructure maintenance to be able to innovate, and agile architectures can adapt to bring a new innovations and respond to process changes without costly development projects or functional regression. 2nd, if you look in the middle architecture for architecture to become intelligent, it really starts with data. An intelligent architecture leverages internal and external data that turn data into actionable insights, and those insights help business and it leaders that need to dynamically drive decisions. And when machine learning can be built into the core of the architecture, it actually moves towards being predictive, adding even more value to Human Judgement. Finally, on the right side, architectures need to be open and integrate across the landscape as she heard before, and this really protects its investment in their existing systems while giving them that adaptability. So now that I've mentioned why we believe architecture is so key for it to balance technology resilience and innovation I think the next question I want to answer is where is a good place for the CIO and their digital dream team to start. And we believe in a multi cloud future and we're all major business systems was benefit from being deployed in the cloud and within the landscape of the solutions. We believe it makes sense to start with the systems that optimize your most valuable organizational resources. So these are your people and your finances and it worked. We've combined support for finance, a charm, planning functions with a single cloud architecture that delivers one source for data across these key areas and can be augmented with external operational data for visibility. This visibility is really critical for business leaders to see the implication of business events, changing forecasts and results of business execution in real time. To really give them that feedback to make rapid pivots when necessary. So let me give you a simple example that brings this home. What is a solution that's built on adaptive architecture in the cloud for finance? A charm planning mean for business users. It means their work is no longer bounded to barriers between data. They can access all relevant data in one system. So in it let me give you an example. Planning a scenario. Usually business leader only has access to one type of data, like HCM data. But what if you're in a situation in a planning process where your teams need more context? Imagine you're a financial analyst for retail organization, and your CEO asks you to evaluate the opening of a new store location, like the location in Orange. There on this simple graphic, it brings up the key question. Can your current revenue and cash position support this growth? Is there a successful organizational structure that exists from which you can model the staffing for the new location? And do you have seasoned employees ready and able to relocate to jump start the operation? So if you have a system like work day, it enables a more natural way working with work day. The data resides securely in the cloud in the same data model, so your teams can model different scenarios, drill into the data and learn why certain location succeed and others don't. Things like the ratios. Service to sales people with skills at the location or the overall cost of location you can surface meaningful insights with the relevant context. So I want to make one last point also about architecture, and that's the point about being open and integrated. I want to briefly touch on the importance of being open and integrated with work day. We've always been architected to integrate well with other systems as we built integration into the core part of the service, not as a Bolt on, and this is really important for it because integration is designed at the core, it simplifies exchanging the data between work day and external systems. And if you think back to that last scenario, you might need to pull in operational data or data about costs of properties at a different location. And basically. With work days, configurable security and business process framework, it works with integration and minimizes cost to set this up. The work they open architecture provides our customers and partners with the ability to create a new user experience as well and even completely new applications that run on and work with work day data that exists for HCM and financial application. Applications and because architecture is founded on open APIs, it seamless to extend and integrate. So I think this really brings home these ideas that open and extensible is so key for an adaptable architecture. So I think we want to explore more now about the business value of an adaptable architecture, and I'm going to hand it back to Phillip and Danielle. Super thank you Kelly and I. I really like how you explain the role of architecture on business impact. So using a scenario to explain how that architecture can actually deliver this type of business value. Now our view is that the business value from this adaptable architecture that we've been talking about is expressed through the business process and our view is that as we look to create these business models of the future. The business process is need to adapt to deal with the fluidity in the market in parallel. So based on this new architecture, we believe organizations really need to reinvent business processes by reducing the number of steps and one of documents to achieve a specific business outcome. And you've got to do that while also ensuring security and complying with regulations as well. So our view is that. It incorporates three key, a critical characteristics to deliver these business prices of the of the future. The first one is around intelligence to ensure that the users are provided with real-time recommendations on next best action to deliver value in that specific business process that those processes are integrated. To ensure color collaboration for the users internally. But increasingly externally, as part of those business models of the future that we've talked about. But increasingly, this focus on automation and it's not typical automation is extreme automation to really reduce manual intervention where possible across the entire business process. So that's where we see these processes hitting. But we also need to think about the future of these business processes as part of a broader road map. So Danielle, Let's Come Back to you and talk through what this could look like in the form of a digital road map as part of broader digital transformation initiatives. Sure feel and a digital road map basically shards out the expected business outcomes delivered by digital transformation in the short, medium, and long-term or Horizon 1, two and three. And each of those horizons should be broken down into very granular use cases that have a focus on incremental innovation in the horizon. One disruptive innovation in the horizon 2 and finally the horizon three is where the business model transformation happens. Now to generate the level of alignment that is needed in the beetle strategy. So we space to focus first on that Horizon 3. And then work backwards. So basically reverse engineer that business model of the future to know what you need to do in the tournament. In the short term to get there. Now let's see a real life example of an insurer an in the horizon. Three what they're trying to do is to deliver no GAP Insurance where they can create personalized profiles of the risk appetite of certain individuals and then build a full insurance package that spans across health, live home. And car insurance for example. Now that is a very data driven business model, and in order to get there than in the horizon 2 they will have to deploy use cases that generate agile delivery of insurance services. Perina secure fashion with things like intelligent regulatory reporting and usage based insurance. Now if we go to the horizon, won the focus there is on delivering powerful customer experiences. Because that will allow them to generate deeper relationship with their customers and then access more personal data. Now the problem with many organizations that we talked to is that they focus only on the use cases that are required to transform the primary functions when they are going through these exercise, but without integrating supporting functions such as ITA term finance, it is virtually impossible to just drive a change in the overall business model and scale that now. Let's see an example. Of how these elements all come together in this slide, which is basically a double click in the horizon 2. And here the focus is on business agility, which is driven by the change in the competitive environment. So for example, last year the CEO of AXA publicly acknowledged that his future competition would be the likes of Facebook, Google and Apple and so to remain relevant, traditional insurers need to shift towards fluid organizational structures to support that flexible outcome based focus teams. And this has to be based also on real time customer needs so. In this environment there 8 or teams require a single integrated toilet talent platform that enables them to an end to end visibility on the skills across the entire organization. Regardless the job title. To be able to allocate talent, San measure people very effectively. Now if we go across to finance for them, agility will start with holistic financial planning and that enables the maximization of the probability of the investment strategy and the overall business stran It is so here. The role of Eiti is again orchestrating the primary use cases, linking them back to the systems that are supporting those core process is that will enable the evolution of the supporting functions with a hybrid multi cloud strategy. I thank you, Daniel. I think that's a really great example of the role of it starting to orchestrate some of these key supporting functions to enable the broader digital transformation that we talked about and really brings that orchestration roll to light. But our view is it's not just about finance and HR, it's enabling this entire digital dream team with the necessary capability to deliver on digital. So for operations around continuous optimization. For the front office feeders, only experience for Security Digital Trust. These are the sort of capabilities that really bring the CIO into the right types of discussions. With the right language to orchestrate this once and for all across this digital dream team, but Kelly let me bring you back in to talk about how work day helps this digital dream team to to make this a reality. That sounds great and I really like that term digital dream team. I had to practice saying it a few times, but it's a It's a great description for this team so I'd really like to wrap up today's discussion with the word debut on how adaptable architecture can help the digital dream dream team towards these goals. First of all, by supporting a single source of truth across the workforce and financial and operational data, the CIO and their dream team can get the visibility to align on joint it. Business strategies and this is so important as we move forward in a changing world to constantly keep the IT priorities in line with the business priorities and collaborating together. And they can see the impact of planned or unplanned changes, which is such a reality today and allowing them to prioritize their investments across their people, their skills and the digital innovations they need. While if it constantly staying in line with their business goals and it can deliver what I like to call. Digital system of action or business operations and provide their business stakeholders digital support to engage in continuous planning and analyzing. Let me double click into this concept of this digital system for action. It's a system that surface is insights that cross your enterprise resources, your people, your financing, your operational information in real time without requiring a large amount of resources to pull out data from disparate systems. To build cross system views in spreadsheets, and those can quickly get dated. So with the system for action, users can pivot naturally from plan to action and then analysis and with work day they were able to deliver this because the data lives in what I like to call purpose built places to optimize its function. So you see on the bottom these concepts like the elastic hypercube that support highly scalable modeling for planning and our graph database that supports the transactional object data model but are adaptable architecture. Contrans send these underlying persistent stores to provide that single view of data. And enable the business users to take that immediate action. You can go from a head count plan to an actual to an actual and then immediately trigger hiring processes. As an example. Finally, in workday all of this is built with a single security model that drives execution across who can view Acton analyze on the data. There's no need to map security across planning transactional analysis functions because security is always on an that's so key for technical resiliency. So I'm going to wrap up this session with return to the concept of adaptive architecture and just bring this back a little bit to work day. Architecture is built on a few guiding principles that hold true even as we evolve with new technologies. An respond to are constantly changing. World architecture works on one source for data that creates an underpins that system for action. It supports one security model that ensures privacy and trust, and it delivers a seamless, resilient user experience in the cloud and with all our customers running on the same version of our application. They can engage in one community, share best practices, and support each other with content and insights. And that's so important for it. Teams facing a world of constant change and it work day, we call this the power of one. And combined with the fact that our architecture is inherently open extensible, that enables it continuous flow of data and agile business processes that are fundamental to its intelligent core. So with that I'm going to wrap up today. I appreciate your time and I want to thank you for joining us as we explore this importance of architecture for success in a changing world and I'm going to hand it back to build up so bad. Thank you Kelly and you will come back in because you've created you have done a great summary there, but we still need to do the one sentence test, which is how we we wrap up these sessions. So we coming back to you shortly. I also just want to thank the panelists are Danielle and Kelly just for. The great insights we've covered, a lot of ground. We've talked about how business models are evolving. We've talked about the changing role of it in the CIO, in particular an and. Then we've also dug into the trade offs in terms of architecture, application architecture, specifically to drive organizational agility. With a bit of a focus on the business process piece to showcase the business value that comes from that. So a little ground lot of good insights. But we do have a bit of time to get one final recommendation from both of you in the one sentence, if possible, to wrap up the session so Danielle and would have come to you first. What is what is your one sentence recommendation for audience today? Thank you Phil. I'll give it a shot so organizations are spending millions of dollars on digital. But to deliver a financial return from that, there needs to be a strong partnership across the entire detail. Dream team and STIO is the best place to orchestrate all those data initiatives in a flexible technology architecture. Very good that would. With several comments. Kelly, one sentence from your side. Absolutely. And when the CIO works in collaboration with their business partners in additional dream team, they can align across their business priorities and then look at the importance of adaptable architecture in being able to create more agility in those priorities and be able to enable them to deliver business continuity and also innovation. So the power of adaptive architecture for the digital dream team. Excellent, excellent, very good. Yeah, I do like the that that focus on the architecture to drive the alignment, prioritization and execution for the digital dream team, which is clearly what they need. Given the uncertainty in the market that we're facing so great session, I'm going to hand back to cater app up and thank you very much for all of your attention. Really appreciate it. Great thank you is lots of food for thought there so I just like to add my thanks to all of you for that insightful session. And with that I'm going to wish you all a good rest of your day. And thanks again for joining us goodbye. _1590832391818
The role of the CIO is evolving. They increasingly find themselves having to respond to the pressure to lead the digital transformation of the business, while not losing sight of traditional IT priorities such as ensuring cybersecurity and data privacy. Managing the trade-off between flexibility and standardization when designing a modern enterprise application architecture is not a simple task, and the CIO must lead the organization towards finding a happy medium.
A new IDC white paper explores how next generation technology architecture can enable organizations to respond to the needs of the market in an agile fashion, providing best practice recommendations for assembling an application architecture that will underpin successful digital transformation.
During this webinar, the paper authors from IDC and Workday’s expert in this field explore and break down the findings of the research in this area, with particular focus on:
Digital business models
Next generation technology architecture
The role of the CIO, CFO and CHRO in transforming the core IT into an intelligent core