Architectural Thinking: The Essential Skill of Our Time

1. What is Architectural Thinking?

Architectural thinking, from my perspective, is the evolutionary path of enterprise management in the digital age.

• Core Concept: It is a cognitive system for understanding the world, akin to the philosophical idea of “Dao” which gives rise to all creations.
• More Than a Tool: It should not be confined to system design alone, but seen as a method for comprehending complex matters.
• Dual Perspectives: It involves both holistic and reductionist views, dissecting complex entities into smaller parts, understanding the relations, and then reassembling them like LEGO to ensure proper function.
• Evolution of Thinking: Every era has its cognitive approach. Today, we need to adopt a modern scientific way to grasp our digital reality.
• The Digital Context: In our lives and businesses, we’re surrounded by applications that support our daily routines and production processes. Architectural thinking helps us make sense of these software and the data they generate.
• Software and Data: Understanding the interplay between software and data is crucial, and architectural thinking is the means to navigate this in the digital era.

For example, in business processes, such as applications for services, architectural thinking can help convert sequential steps into data structures, streamlining the workflow and driving the production and life with data and software.

Hence, in the digital age where software and data prevail, architectural thinking is an essential skill for understanding the world, combining reductionism and holism.

2. Who Needs Architectural Thinking?

Everyone should possess some degree of architectural thinking, varying across different roles.

• Business Leaders: Naturally the chief architects of their enterprises, determining organizational and business structures. Modern managers, especially in small and medium enterprises, need to embrace this thinking to integrate various software systems effectively.
• Importance of Structure: Without a clear architectural vision during software design, problems like siloed information can arise, leading to a revolving door of CTOs. Business leaders should at least understand the overarching business and system support structures.
• Middle Management: Often, middle managers are the de facto business architects, controlling the actual business architecture. Their thinking is critical for business collaboration, process improvement, and the design and implementation of business architecture solutions.

For instance, in successful large projects, middle managers play a pivotal role as they are involved in solution planning, contrasting with many businesses that solely rely on professionals for designs and outcomes, which can lead to disconnection and project failure.

• Training and Awareness: In my digital transformation training sessions, it becomes apparent that understanding the impact of architectural thinking is vital for grasping the essence of digital transformation.
• Technical vs. Business Architecture: There’s a misconception that architecture roles are purely technical. Business and data architecture should be aligned with the business side, while application, network, security, and other purely technical architectures remain on the technical side.

Thus, everyone needs architectural thinking to some degree, with leaders and middle management requiring a deeper understanding.

3. How to Address Implementation Challenges?

Challenges in implementing enterprise architecture often precede the existence of an architecture rather than follow it.

• Work Models: The issue lies in the work models, transitioning from business needs to IT implementation. An architectural approach should inform the development process to ground the architecture in reality.
• Beyond Design: Architecture isn’t just about designing a plan; it must be integrated with project management and communication.
• Collaborative Consensus: There’s no single correct architecture. Success comes from collective agreement among stakeholders: management, business units, architects, and implementation teams.

4. Impressive Enterprises in the Digital Innovation Rankings

I’m honored to participate in these rankings, aimed at interpreting cases to guide and inspire businesses in their transformation journey.

• Representative Cases: The wide coverage of the rankings increases their representativeness, gathering exemplary cases over time.
• Noteworthy Enterprise: Baifenliang, a data security and service provider that also works with blockchain, impressed me with its focus not only on blockchain technology but on solving industrial issues.
• Case Study: In Yuhuan City, Baifenliang consolidated small valve businesses onto its platform, improving procurement prices and stimulating production. Within a year, the platform united over 850 small businesses, with a cumulative sales volume of 1.8 billion yuan, reducing copper procurement costs and increasing profits by 20%.

This case exemplifies the significant local economic impact of digital platforms and the concept of a digital transformation that benefits entire industries.

5. Characteristics of China’s Digital Transformation

China’s digital transformation is distinctive in that it intertwines with government policies and industrial park developments.

• Policy Leverage: Businesses should leverage policy benefits as this round of digital transformation is strongly policy-driven.
• Collective Movement: Digital transformation isn’t just for individual businesses; industry-wide cooperation can maximize external digital dividends.
• Low Profile: Many successful transformations go unnoticed. For instance, Midea’s nine-year digital journey was only recognized when they shared it publicly.

Business performance and digital transformation aren’tequivalent; architectural thinking is about upgrading the tools of production, indirectly affecting business outcomes.

• Technology and Business: The value of technology lies not in its use but in its utility in solving business problems, making its impact on performance indirect.
• Cost-Effectiveness: While cost reduction is a theme, the broader goal should be organizational vitality, looking beyond short-term gains.

6. Recent Research on Digital Transformation

I spend my free time delving into policies related to digital transformation, which are abundant and indicative of market directions.

• Policy Research: For those involved in digital transformation, understanding national policy guidelines is crucial.
• Business Architecture: My focus is on transferring architectural thinking to businesses through workshops to bolster their digital capabilities.
• Confidence in Transformation: Companies often get overwhelmed by technical jargon or unsure how to proceed with technology in digital transformation. It’s essential to establish an enterprise capability map from an architectural standpoint.
• Top-Down Design: Digital transformation requires a top-level design, evaluating and deciding on methods post-assessment, which is more cost-effective than diving straight into technology.

Patience and careful observation are key before actively engaging in digital transformation.

• “Horse Racing” Mechanism: Not all bets need to be placed immediately; observing and concentrated trial-and-error can reveal what works, albeit at a cost.
• Business Mindset Shift: There’s a shift from a fast-paced approach to a more stable growth mindset, focusing less on rapid change and more on collective willingness to embrace and drive change.

The internet sector, having not yet experienced a full economic cycle, faces a change in business thinking as it enters a downturn, contrasting with the broader digital economy still in its growth phase.

Looking forward, confidence in one’s ability to navigate digital transformation is paramount, especially when crossing industry boundaries. In times of uncertainty, a strong belief in one’s vision is essential.

We aim to be the ’enlightened’ in a complex world, gaining clarity and understanding together.