Digital transformation: 5 layers to build on

There's no single approach to implementing digital transformation. Whether you're just starting out or are well into the journey, consider these five layers on which to build your initiative
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Digital transformation leadership lessons

Digital transformation is defined as “the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers.” That’s why every company’s digital transformation journey looks different. Ultimately, it is a paradigm shift in how you do business.

5 areas to initiate digital transformation

Depending on where you stand in the digitization process, here are five different layers you can use to start building new practices and generating values.

1. The infrastructure/hardware layer

It’s a common misconception that “digital transformation” is just another way of saying “moving to the cloud.” But it’s true that the infrastructure layer is an easy place to start: Consider moving from legacy systems to private, public, or hybrid cloud environments. It can bring many benefits, including cost savings, increased flexibility, unparalleled scalability, and more.

Moving from legacy systems to private, public, or hybrid cloud environments can bring many benefits, including cost savings, increased flexibility, unparalleled scalability, and more.

2. The foundation layer

The foundation involves common components like multi-cloud management, system configuration, and micro-service management. It provides common components like resource management, service discovery, service orchestration, logging, and auditing. This is where you get things ready to provision complex and advanced systems. A good foundation layer will provide agility, sustainability, and security to systems being deployed on top of it.

[ Working on hybrid cloud strategy? Get the four-step hybrid cloud strategy checklist. ]

3. The platform layer

The platform is where you host your data lake, service engine, and artificial intelligence (AI) engine. Some possible initiatives include building a data foundation, developing a service-oriented architecture, and enabling AI capabilities.

The data foundation should be inherently unified and interconnected end to end. Here’s where you manage data collection, cleaning, validation, transformation, and modeling and provide unified, centralized data services and data products. These will become your managed data assets.

[Also read: Digital transformation: 3 roadblocks and how to overcome them.]

A service-oriented architecture is where shared business capabilities can be used across functions. They should be ready-made building blocks with data models neatly fitting to your particular business.

Lastly, the AI engine should provide cutting-edge AI capabilities in optimization, prediction, and intelligence in sales planning, logistics, fulfillment, and other areas.

4. The domain application layer

The domain application layer is where you really harness the power of data, build integrated applications that fit end to end, let the AI algorithms evolve and adapt quickly, and replicate the success to cover more business cases.

This is where domain knowledge meets powerful digital technologies, and where your digital transformation initiatives inspire innovations. You can work with the business and engineering teams to quickly test their ideas on this layer. On top of the application layer can sit your integrated office automation and workflow engine. It should be designed to fit your organizational workflow to ease collaboration with different clients.

5. The channel layer

Finally, the channel layer includes all the external parts that users or customers can see and interact with. With solid support from the platform layer and the domain application layer, the channel layer can offer many applications that are missing, such as supplier relationship management, a B2C e-commerce platform, and the B2B marketplace. Transforming this layer will make your applications agile enough to meet the increasing demands from internal and external stakeholders.

A successful digital transformation roadmap will likely include all five layers, but they don’t need to be planned out in order. For instance, even if your infrastructure and foundation layers are not ready, you can start with planning the core platform functionalities you need.

Flexibility in where to start ensures that you don’t need to wait for everything to happen all at once. How would you like to get started?

[Where is your team's digital transformation work stalling? Get the eBook: What's slowing down your Digital Transformation? 8 questions to ask.]

Kate Yuan is a startup consultant with a focus on go-to-market strategies and enterprise sales. She has worked with startups in four continents and 30+ countries as an investor, advisor, and operator. Most recently, she was the Operating Partner at Hemi Ventures, an early-stage fund investing in mobility, biotech and enterprise AI sectors.
Rui Chen is a Consultant at Kate Yuan Consulting. As a solution architect with 20 years of experience in IT, cloud technology, and digital transformation, he has helped numerous Fortune 500 companies define, implement, and upgrade their IT strategy in emerging markets for business expansion.