Understanding the Five Layers of Digital Transformation
Digital transformation is all about strategically leveraging technology to drive value across all areas of the business. This could include migrating from on-premises to the cloud to reap cost savings and enable scalability or introducing data analytics and business intelligence tools to derive insights. Every business is unique, however, and the digitalization end state for you may be different for others.
Let us explore digital transformation and the five business technology layers that each play an essential role.
The Five Business Technology Layers You Will Encounter with Digital Transformation
Before diving into the business technology layers of digital transformation, let us clarify an important matter. Different businesses are at different maturity levels regarding digital transformation. We recommend starting with layer one, and honestly assessing the current state of maturity for your business at each layer.
Layer 1: The Hardware, Infrastructure, Bare Metal
Server hardware, IT infrastructure, or the “bare metal.” However you refer to it, IT infrastructure is the base layer of any digital transformation strategy. It forms a technological foundation, defining the capabilities and limitations that influence what businesses can or cannot do in the long term.
Performance factors to consider include CPU, RAM and storage resources, network bandwidth and latency, database technologies, datacenter geography, and hybrid- or multi-cloud assets. You also have the choice of public cloud for more economical shared computing, or virtual private clouds for isolated instances that offer better security and stability.
In the 2021 State of IT report, hardware accounted for 31% of IT budgetary expenditure—this is a huge chunk of the pie. Slow or incompatible IT infrastructure can also degrade productivity and digital service performance, leading to bad employee and customer experiences. This makes it vital for IT teams to optimize existing infrastructure, assess current IT capabilities against future need, and proactively implement new server technologies to support future business projects.
Layer 2: IT Management Components
Now that you have hardware in place, you need a way to communicate with and control it.
In the multi-cloud, this could be an orchestration layer. For Kubernetes containers, this might include a microservice layer. Some common components include configuration management, asset discovery, resource and asset management, network firewalls and encryption, system and process logs, or security and data auditing.
This layer is an opportunity to drive standardization across your IT network. Choosing interoperable technologies means you can do more with less components, reducing the number of dependencies to manage. Otherwise, IT management components should enable agile operations while protecting security and compliance for underlying systems.
Layer 3: Platform as a Layer
With hardware in place, and an interface to control this hardware, next we have the platform layer. A platform is simply a group of hardware or software components that work together to achieve an intended outcome. A data warehousing company could offer ANSI SQL cloud interfaces and services, ETL pipelines, SQL query processing, and cloud data storage, for example, which combine to form an enterprise data warehouse platform.
Other platform types can include security, Internet of Things, analytics and business intelligence, artificial intelligence or machine learning, and application programming interfaces.
In this layer, one digital transformation goal might be service-oriented architecture or the reuse of software components via service interfaces. This reduces the effort needed to integrate platforms through the use of open standards. Another goal could be removing data silos using a data lake, data warehouse, or federated database platform. This improves data availability and accessibility, while also enabling big data analytics and data mining capabilities.
Layer 4: Domain Layer
Much as a royal entity has the kingdom as their domain, IT teams have a collection of entities, services, and business logic that form a domain layer. Domain-driven design (DDD) is one way to model the domain layer according to the wider enterprise business model.
The domain layer is a way of encoding real-world business rules in a digital format understood by machines. It models how and who can create, store, view and edit data. It also models how business objects interact together, and defines expected workflows for events and actions.
The overarching objective is to isolate an essential domain model. This exists without dependencies or connections to other applications. System designers and architects can use this to understand relationships between entities in the domain, ignore application-specific modules, and drive agnosticism at the domain layer.
Layer 5: User-Facing Channel Layer
Layers one to four are hidden from users in most cases. What they can see, however, is the channel layer. Think of this as an IT communication channel for user-facing applications and services. Isolated instances of an application can communicate together through this layer; for example, two people collaborating in real-time on a single cloud document.
The channel layer is dependent on the platform layer and domain layer. Channel layers are also asynchronous for both send and receive traffic. It could include your live chat widgets, e-commerce store, or vendor relationship management software.
The focus with this layer should be meeting present and future demand from customers and stakeholders. This can be achieved by focusing on agnostic open standards and minimising custom code.
Rahul Jain is Chief Delivery Officer - Global Technology Services at Trianz