Visionary Chinese Banks Show How Customer-Oriented Architectures Support Innovation

Charlie Dai

Five of the top 10 companies in the latest Forbes Global 2000 company list (published in May) are from China, and four of them are commercial banks. If you think this is only due to China’s massive consumer base, and that you can easily apply your global innovation strategy to the Chinese market, you’re almost certainly wrong. Enterprise architecture (EA) professionals at companies doing business in China should take a look at what the country’s banking and financial services industry (BFSI) is doing to enable customer-centric innovation.

I recently published two reports focusing on China’s BFSI. In these reports, I analyzed the Chinese banking landscape and the business challenges banks face, described a systematic approach to innovation that EA pros should consider when planning their transformations, and shed light on how they use both mainstream and emerging technologies to unleash the power of innovation around products, operations, and the organization. Some of the key takeaways:

  • Chinese banks suffer from their own customer experience issues. As a longtime monopoly, China’s BFSI has suffered from inefficiency, quality problems, and an uncompetitive ROI — and thus can no longer meet the high bar for customer satisfaction in the age of the customer. EA pros must find innovative ways to resolve these issues.
  • Internet companies and regulatory changes are challenging BFSI players. Visionary Internet companies like Alibaba and Tencent have launched financial services products, including innovative products like Yuebao, that are disrupting China’s BFSI with higher profits, lower barriers to entry, and better flexibility. The government is also making regulatory changes that will open up the market and intensify competition.
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How Will The Data Economy Impact Enterprise Architects?

Gene Leganza
No self-respecting EA professional would enter into planning discussions with business or tech management execs without a solid grasp of the technologies available to the enterprise, right? But what about the data available to the enterprise? Given the shift towards data-driven decision-making and the clear advantages from advanced analytics capabilities, architecture professionals should be coming to the planning table with not only an understanding of enterprise data, but a working knowledge of the available third-party data that could have significant impact on your approach to customer engagement or your B2B partner strategy.
 
 
Data discussions can't be simply about internal information flow, master data, and business glossaries any more. Enterprise architects, business architects, and information architects working with business execs on tech-enabled strategies need to bring third-party data know-how to their brainstorming and planning discussions. As the data economy is still in its relatively early stages and, more to the point, as organizational responsibilities for sourcing, managing, and governing third-party data are still in their formative states, it behooves architects to take the lead in understanding the data economy in some detail. By doing so, architects can help their organizations find innovative approaches to data and analytics that have direct business impact by improving the customer experience, making your partner ecosystem more effective, or finding new revenue from data-driven products.
 
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The "Three Kingdoms" Of The Public Cloud Market In China

Charlie Dai

The classic work of Chinese historical fiction “Romance Of Three Kingdoms” describes the history of China after the Han dynasty. This work focuses on three power blocks that fought against each other in an attempt to be the dominant kingdom. After my discussions with many users and vendors at the OpenStack Summit 2013, I see an analogy between these three kingdoms and the evolution of the IaaS market in China as I described it in my report “PaaS Market Dynamics In China, 2012 To 2017” early this year.

Three categories of players are emerging in public cloud market in China, and similar to the Three Kingdoms, these players will fight against each other and collaborate at the same time, accelerating both the adoption and the maturing of cloud solutions in Chinese market.

  • State of Shu: Amazon Web Services. The king of Shu was the descendant of Han dynasty before the era of the Three Kingdoms; because of his “royal blood,” he had many supporters and followers to fight against the other two kingdoms.

Amazon.com is in a similar situation: It has very good reputation among architects and developers in China. However, Amazon’s promotion activities are lagging. Amazon is trying to expand its cloud territory into Chinese market by building a data center in Beijing and recruiting local personnel. However, its relationship with the government is not as good as Microsoft’s, and Amazon’s ambition to launch AWS in China has been slowed down due to local regulations.

  • State of Wu: Microsoft Windows Azure and its alliances. The state of Wu is competitive because it has the natural advantage of the Yangtze River, helping it defend against invasion and expand its territory.
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Visionary companies are driving next generation enterprise architecture in China – are you ready?

Charlie Dai

For the past ten years, the major IT initiative within Chinese organizations has been service oriented and/or process driven architecture.  The pace of change has been slow for two reasons: 1) From an end user perspective, related business requirements are not clear or of high priority; 2) more importantly,  solutions providers have not been ready to embrace  technology innovation and  meet emerging technology requirements through new business models.

Times are changing. IBM and other major ISV/SI in China (as well as end users) are driving momentum around emerging technology, such as cloud and enterprise mobility.  I recently attended the IBM Technical Summit 2013 in Beijing from July 11 to 12.  Here’s what I learned:

  • Telecom carriers supported by technology vendors will accelerate cloud adoption by SME.  Contributing to more than 60% of total GDP in China, small and medium enterprises (SMEs) have always sought to simplify their IT operation as much as possible, and at the same time scale it up when business expands as quickly as possible. IaaS solutions appear to be a perfect match for SMEs; however IT professionals have concerns about the security and data privacy over the operations by other companies.
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Digital Customer Experiences: Integration Opens A World Of Optimization Possibilities

Randy Heffner

What if you could look over the shoulder of every one of your customers as they used your mobile apps, web pages, kiosks, and other digital channels? What could you learn? How might you use what you learn to dynamically adjust your digital experiences?

In the days when web applications were king, this type of insight was doable with simple web analytics and similar tools. Today, continual experience optimization is much more difficult because of:

  • Multiple interaction channels. You must collect, correlate, and analyze data in a coherent way across multiple channels of customer interaction. A single customer interaction may cross between channels or even use more than one channel at the same time.
  • Many back end servers. You must integrate data from multiple back end servers including recommendation engines, commerce, mobile application servers, digital asset management, community, collaboration, messaging, and more.
  • The need for rapid change. You must quickly change any or all of your digital experiences and back end services based on what you’ve learned.
  • The need for contextual experiences. You must use each individual customer’s context to dynamically adjust experiences in real-time.
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Systems of Engagement vs Systems of Reference – Core Concept for Infrastructure Architecture

Richard Fichera

My Forrester colleagues Ted Schadler and John McCarthy have written about the differences between Systems of Reference (SoR) and Systems of Engagement (SoE) in the customer-facing systems and mobility, but after further conversations with some very smart people at IBM, I think there are also important reasons for infrastructure architects to understand this dichotomy. Scalable and flexible systems of engagement, engagement, built with the latest in dynamic web technology and the back-end systems of record, highly stateful usually transactional systems designed to keep track of the “true” state of corporate assets are very different animals from an infrastructure standpoint in two fundamental areas:

Suitability to cloud (private or public) deployment – SoE environments, by their nature, are generally constructed using horizontally scalable technologies, generally based on some level of standards including web standards, Linux or Windows OS, and some scalalable middleware that hides the messy details of horizontally scaling a complex application. In addition, the workloads are generally highly parallel, with each individual interaction being of low value. This characteristic leads to very different demands on the necessity for consistency and resiliency.

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Don't Establish Data Management Standards

Michele Goetz

A recent survey of Enterprise Architects showed a lack of standards for data management.* Best practices has always been about the creation of standards for IT, which would lead us to think that lack of standards for data management is a gap.

Not so fast.

Standards can help control cost. Standards can help reduce complexity. But, in an age when a data management architecture needs to flex and meet the business need for agility, standards are a barrier. The emphasis on standards is what keeps IT in a mode of constant foundation building, playing the role of deli counter, and focused on cost management.

In contrast, when companies throw off the straight jacket of data management standards the are no longer challenged by the foundation. These organizations are challenged by ceilings. Top performing organizations, those that have had annual growth above 15%, are working to keep the dam open and letting more data in and managing more variety. They are pushing the envelope on the technology that is available.

Think about this. Overall, organizations have made similar data management technology purchases. What has separated top performers from the rest of organizations is by not being constrained. Top performers maximize and master the technology they invest in. They are now better positioned to do more, expand their architecture, and ultimately grow data value. For big data, they have or are getting ready to step out of the sandbox. Other organizations have not seen enough value to invest more. They are in the sand trap.

Standards can help structure decisions and strategy, but they should never be barriers to innovation.

 

*203 Enterprise Architecture Professionals, State of Enterprise Architecture Global Survey Month,2012

**Top performer organization analysis based on data from Forrsights Strategy Spotlight BI And Big Data, Q4 2012

Don't Establish Data Management Standards

Michele Goetz

A recent survey of Enterprise Architects showed a lack of standards for data management.* Best practices has always been about the creation of standards for IT, which would lead us to think that lack of standards for data management is a gap.

Not so fast.

Standards can help control cost. Standards can help reduce complexity. But, in an age when a data management architecture needs to flex and meet the business need for agility, standards are a barrier. The emphasis on standards is what keeps IT in a mode of constant foundation building, playing the role of deli counter, and focused on cost management.

In contrast, when companies throw off the straight jacket of data management standards the are no longer challenged by the foundation. These organizations are challenged by ceilings. Top performing organizations, those that have had annual growth above 15%, are working to keep the dam open and letting more data in and managing more variety. They are pushing the envelope on the technology that is available.

Think about this. Overall, organizations have made similar data management technology purchases. What has separated top performers from the rest of organizations is by not being constrained. Top performers maximize and master the technology they invest in. They are now better positioned to do more, expand their architecture, and ultimately grow data value. For big data, they have or are getting ready to step out of the sandbox. Other organizations have not seen enough value to invest more. They are in the sand trap.

Standards can help structure decisions and strategy, but they should never be barriers to innovation.

 

*203 Enterprise Architecture Professionals, State of Enterprise Architecture Global Survey Month,2012

**Top performer organization analysis based on data from Forrsights Strategy Spotlight BI And Big Data, Q4 2012

Forrester's Top 15 Emerging Technologies To Watch: Now To 2018

Brian  Hopkins

The pace of technology-fueled business innovation is accelerating, and enterprise architects can take a leading role by helping their firms identify opportunities for shrewd investment. In our 2012 global state of EA online survey, we asked again what the most disruptive technologies would be; here’s what we found:

The results shouldn’t surprise anybody; however, if you are only looking at these, you are likely to get smacked in the face when you blink -- things are changing that fast. In the near future, new platforms built on today’s hot technologies will create more disruption. For example, by 2016 there will be 760 million tablets in use and almost one-third will be sold to business. Forrester currently has a rich body of research on mobility and other hot technologies, such as Forrester’s mobile eBusiness playbook and the CIO’s mobile engagement playbook. But by 2018, mobile will be the norm, so then what?

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Road Maps Are Powerful When Linked To Business Outcomes

Gene Leganza

The use of road maps to illustrate technology plans is fairly widespread. Whether it's a vendor explaining its product plans or a technology architect showing the evolution of a particular area of the infrastructure, road maps are great for communicating what happens when. And when plans as illustrated by the road map get sign-off, they can become a useful tool in change management as well. Someone wants your key resources for a special project? Fine, but all the dates on that road map they just approved just shifted six months to the right. Road maps tell the story of what to expect an organization to accomplish for the foreseeable future, and that's what makes them powerful. 

That's why road maps that link traditionally difficult-to-explain areas of technology, such as those related to information management, to specific and highly desirable business outcomes can be a major win for architects looking to communicate what they're doing and why. There's always been a Catch-22 about explaining the value of complex technologies to audiences with no appetite for technical complexity -- but with needed sign-off authority for key resources (like funding). If the EA team has credibility (OK, that can be a big "if"), just showing the interrelationships between business outcomes, business capabilities, IT projects, and required activities in the various EA domains can satisfy the need for "explaining" that complex technology. Or for explaining the need for that not-well-understood architecture process that requires business involvement, such as information architecture development or governance. 

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