Formula 4.0 for Digital Transformation: A Business-Driven Digital Transformation Framework for Industry 4.0

by Venkatesh Upadrista

Overview

A staggering 70% of digital transformations have failed as per McKinsey. The key reason why enterprises are failing in their digital transformation journey is because there is no standard framework existing in the industry that enterprises can use to transform themselves to digital. There are several books that speak about technologies such as Cloud, Artificial Intelligence and Data Analytics in silos, but none of these provides a holistic view on how enterprises can embark on a digital transformation journey and be successful using a combination of these technologies. FORMULA 4.0 is a methodology that provides clear guidance for enterprises aspiring to transform their traditional operating model to digital. Enterprises can use this framework as a readymade guide and plan their digital transformation journey. This book is intended for all chief executives, software managers, and leaders who intend to successfully lead this digital transformation journey. An enterprise can achieve success in digital transformation only of it can create an IT Platform that will enable them to adopt any new technology seamlessly into existing IT estate; deliver new products and services to the market in shorter durations; make business decisions with IT as an enabler and utilize automation in all its major business and IT processes. Achieving these goals is what defines a digital enterprise — Formula 4.0 is a methodology for enterprises to achieve these goals and become digital. Essentially, there is no existing framework in the market that provides a step-by-step guide to enterprises on how to embark on their successful digital transformation journey. This book enables such transformations. Overall, the Formula 4.0 is an enterprise digital transformation framework that enables organizations to become truly digital.

Product Details

ISBN-13:	9780367746841
Publisher:	Productivity Press Inc.
Publication date:	05/27/2021
Pages:	348
Product dimensions:	7.00(w) x 10.00(h) x (d)

About the Author

Venkatesh Upadrista is currently leading digital transformation for several clients across UK and Ireland, Benelux and France regions for a large IT Services company. He has been recognized as an exceptional digital talent leader by UK Tech Nation and is recipient of several national and international awards. He is a board advisor to digital start-ups and provides his guidance on technology trends to develop competitive products and service offerings.

Mr. Upadrista is a thought leader in the digital transformation space. In his career of more than two decades experience, he got an opportunity to consult several Fortune 500 companies on large scale enterprise level digital transformations. Mr. Upadrista has also provided his guidance to several enterprises in areas of Cloud Transformation, IoT & Blockchain implementation, Project to Product Transformation, and Agile-DevOps set-up, and he used these varied experiences in crafting this book.

Mr. Upadrista began compiling technical encyclopedias as a high school student. He took the vast collection of experimental facts from various sources and the research that he had been accumulating since several years and began to deploy them throughout his professional experience.

He is an advisor to a number of digital initiatives in UK and has been a partner to CIOs of several large organizations to help them define ways to improve their business using technology.

His experience moves across technology and sales leadership. He has worked in a blended mixture of the onsite/offshore model, and through his experience, he has helped many customers move their strategies to gain several qualitative and quantitative benefits.

Table of Contents

Foreword Erik Verrijssen xiii

Foreword Simon Hollins xv

Foreword Satyanarayana Murthy xix

Foreword Raahil Burhaani xxi

Foreword Julia Sattel xxiii

Acknowledgments xxv

About the Author xxvii

Introduction 1

Notes 4

Section I Introduction to Formula 4.0

1 A Generic Industry Perspective on Digital Transformation 7

Designing Business for Future 9

Digital Transformation-How Is It Being Driven Today 10

Cloud Computing 12

Cloud Deployment Models 13

Edge Computing 14

Data Analytics 16

Summary 18

Notes 18

2 Business-Driven Digital Transformation Framework: Formula 4.0 19

Formula 4.0 (Business-Driven Framework for Digital Transformation Using Digital Enablers from Industry 4.0) 20

Business Transformation Model 21

Formula 4.0 Horizontal Service-Foundation Platform 23

Formula 4.0 Horizontal Service-People, Processes, and Tools 24

Product-Based Organization 25

Formula 4.0 Horizontal Service-Data and Analytics 27

Formula 4.0 Vertical Service (Automation and Enterprise Governance) 28

Automation 28

Enterprise Governance 29

Notes 30

Section II Identifying Business Processes for Digital Transformation Using Systems Thinking and Design Thinking

3 Business Strategy for Digital Transformation 33

Customer Engagement Strategy 35

Business Transformation Strategy 37

Process Transformation 38

Model Transformation 38

Domain Transformation 39

Choosing between Customer Engagement and Business Transformation Strategy 40

Notes 42

4 Business Transformation Model and Intelligent Business Transformation Model 43

Systems Thinking 44

The iceberg Model for Systems Thinking 45

Design Thinking 47

Stage 1 Empathize-Research Your Users' Needs 48

Stage 2 Define-State Your Users' Needs and Problems 49

Stage 3 Ideate-Challenge Assumptions and Create Ideas 49

Stage 4 Prototype-Start to Create Solutions 50

Stage 5 Test-Try Your Solutions Out 50

Applying Systems Thinking and Design Thinking Together-A Case Study 51

Discovery Phase 52

Define Phase 53

Develop Phase 54

Rollout Phase 55

Strong Focus on Customers 55

Rigorous Process for Analyzing and Communicating Insights 55

Experiments and Iterations 56

Conclusion 56

The Intelligent Business Thinking (IBT) Model 56

Business Transformation Model (BT Model) 57

Applying IBT Model on the Business Processes 59

Business Transformation Model Treatments 60

Digital from Core 60

Digital from Surround 61

Treatments for Systems under Each Zone of the BT Model 62

Notes 64

Section III Foundation Platform

5 Creating a Foundation Platform with Digital Triplets (Atomic Architecture, Cloud Infrastructure, and Application Programming Interface) 67

Atomic Architecture 70

Separation of Concerns 72

Cloud Infrastructure 73

Application Programming Interface (API) 74

Notes 75

6 Cloud infrastructure 77

Infrastructure Role in Digital Transformation 78

Data Center 80

Infrastructure Evolution-From Data Centers to Cloud 80

Cloud Computing 81

Cloud Delivery Models 83

Infrastructure as a Service (IaaS) 83

Platform as a Service (PaaS) 84

Software as a Service (SaaS) 84

Cloud Deployment Models 85

Cloud Migration Approach/Treatment 85

Lift and Shift Migration or Rehosting 86

Shift to SaaS/Repurchase/Drop-And-Shop 88

Replatforming or Lift-Modify-Shift 88

Refactoring/Rearchiteeting 89

Retain 90

Retire 90

Cloud Migration Strategy 90

Cloud Benefits Cannot Be Realized If It Is Not Managed Properly 94

Preparing to Migrate to Cloud-The Eight-Step Cloud Migration Checklist 97

Right Planning 97

Execution Methodology (Iterative Cloud Migration Factory) 99

Migration Strategy/Approach 100

Application Dependencies 101

Zero to 100% Cloud Approach 102

Testing 103

Version Upgrades 104

Cloud Provider Features (Not All Features of Cloud Provider Will Work) 104

Case Study 105

Notes 106

7 SAP Cloud Migration 107

A Bit of Background about ECC to Suite on HANA to S/4HANA 109

The SAP Cloud Platform 112

SAP S/4HANA Cloud 112

The SAP HANA Enterprise Cloud (HEC) 112

SAP on the Public Cloud 113

SAP Embrace Initiative 113

Point of View (POV) on Different Cloud Providers 114

SAP Cloud Migration Strategy 115

Homogeneous System Copy 115

Heterogeneous System Copy 117

Heterogeneous Migrate to SAP HANA 117

SAP Near- Zero Downtime (NZDT) 117

System Conversion for S/4HANA 117

Key Considerations for SAP Migration to the Public Cloud 118

Note 122

8 Application Programming Interface (API) 123

API Gateway 127

Importance of API Gateway 128

The API Implementation Journey: Creating an API Platform 130

API Enablement Team 132

T-Mobile Case Study 132

Note 135

Section IV People, Processes, and Tools

9 Product Organization 139

What Is a Project Or a Project Organization? 139

Product Organization 141

Product Life Cycle 144

Hypothesis to Cash 145

What Does Transforming to a Product Organization Mean? 146

Breaking Product into Epics and User Stories 151

Formula 4.0 Product Metrics 154

Product Business Metrics 155

Product IT Success Metrics 157

Agile Software Development Methodology in Formula 4.0 Product Development 159

Reduced Cost 163

Global Talent Pool 163

Increased Productivity 163

Cost of Quality 165

Agile-A De Facto Formula 4.0 Methodology 165

Notes 168

10 Human Resource Management 169

Formula 4.0 People Identification 170

The Cost Implications of a Traditional Pyramid 172

Formula 4.0 Hackfest Model 175

Shortlisting 175

Product Focused Evaluation 176

Behavior Evaluation 177

Trainings 177

Note 178

11 Importance of DevSecOps in a Product-Based Organization 179

Continuous Integration (CI) and Continuous Delivery (CD) in DevOps 182

Typical Tools Used to Build a DevOps Pipeline 182

Source Code Repository 182

Build Server 183

Configuration Management 183

Test Automation Tools 183

CI/CD Tools or Pipeline Orchestration 183

Infrastructure 183

DevSecOps 184

Application Security Threat Modeling 186

Static Application Security Testing (SAST) 187

Dynamic Application Security Testing (DAST) 187

Open Source Vulnerability Assessment 188

Network Vulnerability Detection 189

Real-Time Monitoring of Threats 190

Notes 190

Section V Data Analytics, Automation, IT-OT Integration, and Enterprise Governance

12 Big Data and Analytics 193

(BIG) Data First Reference Model 194

The Data Source 196

The Data Storage Layer 197

Data Injection Layer and Data Processing Layer 197

Data Consumption Layer 198

Data Operation 198

Data Governance 201

Components of a Data Governance Framework 203

Data Governance Implementation 204

Data Governance Tools 204

Data Security 204

Data Security Tools 205

(BIG) Data First Strategy 206

The First Lever. The Data Platform 207

The Second Lever: Smart Data Management 208

The Third Lever. Consumption-Based Analytics 209

The Fourth Lever: Smart Data Operations 210

Big Data: Challenges and Mistakes 213

Formula 4.0 Data Maturity Levels 214

The First Capability Area: Data Pipeline 216

The Second Capability Area: Data Governance 217

The Third Capability Area: Data Operations 219

The Fourth Capability Area: Data Platform 219

The Fifth Capability Area: Tools 219

The Benefits of Moving to Maturity Level 2 219

Maturity Level 2 Case Studies 221

Notes 224

13 Automation with RPA and AI-ML 225

Robotic Process Automation 227

Artificial Intelligence with Data Science 228

Data Science 229

The Link between Artificial Intelligence and Data Science 230

Importance of Quality Data 230

Formula 4.0 Automation Methodology 231

Full Stack Operations Automation 236

How to Get Automation Programs Right 239

Build Automation Center of Excellence at Enterprise Level 239

Follow a Structured Formula 4.0 Automation Identification Methodology 240

Automation Should Eventually Be Part of the Software Development and Operations Life Cycle 240

Compliance Due Diligence 240

Design a Business Process with End-to-End View 241

Cost Is Important but Business Impact Is Much More Key 241

Note 242

14 IT-OT Integration 243

Operational Technology-A Preview 245

The IT-OT Integration 247

Security in an IT-OT Integrated World 248

Cybersecurity Solutions for IT-OT Integration 253

IT-OT Integration Reference Architecture 256

IoT Devices 256

Device Management System 259

Gateways 259

Full Stack IoT Platform 260

When to Get Started on IT-OT Integration 261

Formula 4.0 IT-OT Core Team 262

Planning IT-OT Integration 265

IT-OT Integration with Formula 4.0 267

Notes 269

15 Enterprise Governance 271

Formula 4.0 Guidance on Digital Transformation Governance 273

Section VI Bringing the Pieces Together

16 The Formula 4.0 Methodology: Bringing All Capabilities Together for Digital Transformation 283

Understand the Goals and Objectives of an Enterprise 284

Defining Business Strategy and Identifying Business Processes for Digital Transformation 286

Setting up the Foundation 286

Cloud Infrastructure 286

Selecting the Right Cloud Strategy 289

Atomic Architecture 290

API Platform 291

Tools and Software Consolidation 291

Tactical Benefits 292

Operational Benefits 293

Strategic Benefits 293

Formula 4.0 Tools Consolidation Approach 293

Product Organization and People Transformation 295

People Transformation aka Workforce 296

Setting Up DevSecOps for Product Development 296

Data First 297

Enterprise Governance 298

Enterprise Governance within Capability Areas 298

And Finally-Enabling Automation with RPA, AI, and ML 299

IT-OT Integration as the Last Capability Area 299

Note 300

Index 301

Editorial Reviews

Many books have been written about Digital Transformation, but so far nobody has been able to define a real good pragmatic framework for success, until this book is released. In my experience as CIO of large corporations, I can only testify that we need to a holistic framework for digital transformation; we need a clear guide, cookbook for success. This book is a big step forward to such guide. It contains true pragmatic approaches that can be applied very widely. To those who are trying to crack the digital transformation nut, FORMUL 4.0 framework as defined in this book is recipe to sure shot success and is worth your reading time!

— Erik Verrijssen, Chief Information Officer, Sanofi

Over the last several years as the Chief Information Officer for Essar Oil UK and some of the other industries, I have come across many enterprises and individuals who spoke about digital transformation - most of the time it was about technology and less about business drivers. Business demand drives digital transformation and not vice versa - this is the most important point which every industry expert need to understand when they bring digital transformation agenda to their customers. Mr. Upadrista has been spot-on to this concept in the book which he named as "Formula 4.0 for Digital Transformation". If you are looking for a capability with the breadth and depth of business and technology to make your enterprises successful in digital transformation, there is no better person than Mr. Upadrista and a model than Formula 4.0 to lead you to success.

— Raahil Burhaani, Chief Information Officer, Essar Oil (UK) Limited

Before reading the book produced by Mr. Venkatesh Upadrista, I was not convinced that a single methodology exists in the market that can guide an enterprise in their digital transformation journey. Mr. Upadrista has since proved me wrong with his unique methodology on digital transformation, which he calls Formula 4.0. Few people are as well qualifies as Mr. Upadrista to help organizations understand and successfully navigate the challenges of digital transformation. My advice to all chief executives who aspire to excel in their business using technology: read this book, study its lessons. Take its advice to heart. There is no better guide than Mr. Venkatesh Upadrista to show the way to digital transformation success.

— Satyanarayana Murthy, Advisor to President, Microsoft

Venkatesh Upadrista has written a book that outlines the practical approaches that any successful digital transformation will need. Venkat has created a work full of insights, techniques, and practical examples. Taken together, they represent all of the core skills that a leader needs to drive a transformation that is successful, enduring, and joyful. I wish I’d had this book to learn from when I started out as a CIO. I hope that you enjoy it as much as I have.

— Simon Hollins, Group CIO, Informa PLC (Retired)

Formula 4.0 is a powerful methodology for enterprises to embark on their digital transformation journey. Mr Venkatesh Upadrista provides a unique way to think about how business and technology need to come together and create value. The book proves to be a great guide for enterprises thriving to reinvent themselves using digital & is a must read for everyone who wants to do business differently using the power of technology.

— Julia Sattel, Senior Expert, Travel IT & Advisor for Airlines and Mobility

From the Publisher