Nothing is static in business; yet periods of stabilization must follow periods of change to realize benefits from transformational investments. Resilience and agility are key to navigating business changes, especially in areas like product innovation, supply chain operations, sustainability, compliance, etc. I previously elaborated on the concept of a “digital core” which can vary based on the industry and context. It encompasses the central components of an integrated business ecosystem, its vital data assets, analytics platform(s), as the foundational technologies propelling digital transformation.
Product and service innovators need to embed their PLM strategy into the digital core tapestry to steer operations through master data consistency and business intelligence integrity.
A digital core also implies a robust foundation that enables adaptability, innovation, and continuous improvement—fostering open connectivity and a willingness to embrace change in a cohesive way throughout the extended enterprise. Driving a cohesive digital core strategy involves tackling 5 concurrent considerations:
- Balancing the need to connect business capabilities with the management of complexity across enterprise and its integrated ecosystem, meaning building the right Digital Threads.
- Building a robust and sufficient architecture to prioritize system interfaces, automate workflows, and maintain agility while continuously driving simplification and minimizing digital constraints.
- Leveraging new technologies such as data lakes, AI, and ML to drive cross-functional insights, finding the optimal balance for conducting analytics at source where possible and as relevant, as well as across platforms to sustain effective pan-business operational synergies.
- Building data assets and driving analytics reconciliation, including effectively managing cybersecurity concerns and reducing data model complexity.
- Balancing creativity and productivity in the ever-evolving technological landscape while defining and implementing a scalable and adaptable digital core strategy.
Whether your “digital core” strategy revolves around the ecosystem itself, the integrated core data assets, or a combination of both, enterprise architects and business leaders must establish fundamental principles and necessary guardrails to steer digital transformations.
A clean digital core signifies an organized, well-maintained, and efficient technology and data architecture to significantly impact the relevant aspects of the enterprise ecosystem.
SAP promotes their software suite to adopt a clean core approach as the “strategy of maintaining a simplified, efficient, and well-structured core system to facilitate scalability. It focuses on 3 extensibility options – In-app extensibility, developer extensibility and side-by-side extensibility.”
The tagline “keep your core clean” is said to have been coined by Björn Goerke, former SAP CTO, in his TechEd 2018 keynote. Subsequently, a Forbes article quoted Goerke elaborating on the need to drive out-of-the-box capability adoption, end-to-end integration through scalable and secure infrastructures, with constructive and adaptive customizations that protect the “core” to ensure future upgradability and evolutions.
Beyond the marketing jargon, the clean core strategy is sound and can apply to any enterprise scope, beyond ERP or specific vendor platforms. A well architected and maintained digital core should promote operational efficiency, accelerate decision-making processes, and reduces the risk of unmanaged technical debt—also putting clean and consistent data at its core. Simply put, a “clean” digital core can be defined with 10 essential characteristics:
- Streamlined data flows: how to ensure that data moves efficiently through the digital core, avoiding bottlenecks, gaps, or unnecessary detours?
- Minimal data redundancies: how to avoid unnecessary duplications of data, processes, or systems to enhance efficiency and reduce resource consumption?
- Minimal evasive system customizations: how to govern system extensions and interfcaces to minimize maintenance and change impacts?
- Effective data management practices: how to organize, store, and retrieve data that align with industry best practices, ensuring accuracy and accessibility?
- Infrastructure compatibility with tightly coupled extensions: how to seamlessly integrate the relevant systems without over-constraining the landscape, promoting a cohesive and interoperable ecosystem?
- Fit-for-purpose digital assets that are tightly governed: how to govern data assets with a clear purpose, ensuring they are well-organized, and easily accessible when needed?
- Scalability to adapt seamlessly to evolving business needs: how to architect a scalable digital core, accommodating for business growth and requirement changes without compromising performance?
- Real-time analytics capabilities for data-driven decision-making: how to drive right-time analytics to empower informed decision-making based on the most up-to-date trusted information?
- Integration flexibility to connect with new applications and systems: how to embed flexibility into the core to connect other data assets or applications, while maintaining the suitable interoperability?
- Technical debt management: how to keep current, drive ever-green solution strategies, embed ongoing learning and business adaptability, including new standard adoption and new capability deployment, including cybersecurity, sustainability, AI, etc.?
A clean digital core serves as the backbone infrastructure, designed not only to seamlessly integrate various systems and data sets, facilitating “plug and play” and configurable connectivity.
Broadly speaking, a clean core is about fostering agility and adaptability. It provides a solid foundation for integrating new technologies, accommodating business expansions, and responding promptly to changing market dynamics. The organizational clarity resulting from a clean digital core enhances collaboration, as teams can access and share information seamlessly, breaking down silos and promoting a more unified and collaborative working environment.
The “plug and play” connectivity approach suggests a straightforward flexible approach to data, process, and system integration. In this setup, different components should be easily interconnected or replaced, while minimizing the complexities associated with integrating systems and enhancing the organization’s agility to swiftly respond to evolving business requirements.
What are your thoughts?
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