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Understanding Organizations' Digitalization Preparedness

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Understanding Organizations' Digitalization Preparedness 284/2020 ELIISA VAINIKKA ELIISA ANTTI KOIVISTO Understanding Prekarisaation tunnemaisema Organizations’ Digitalization Preparedness An analysis through the lens of enterprise architecture maturity Tampere University Dissertations 326 Tampere University Dissertations 326 ANTTI KOIVISTO Understanding Organizations’ Digitalization Preparedness An analysis through the lens of enterprise architecture maturity ACADEMIC DISSERTATION To be presented, with the permission of the Faculty of Engineering and Natural Sciences of Tampere University, for public discussion in the lecture hall K1702. of the Konetalo, Korkeakoulunkatu 6, Tampere, on 13 November 2020, at 12 o’clock. ACADEMIC DISSERTATION Tampere University, Faculty of Engineering and Natural Sciences Finland Responsible Professor supervisor Samuli Pekkola and Custos Tampere University Finland Pre-examiners Associate Professor Titularprofessor Johan Magnusson Stephan Aier University of Gothenburg University of St. Gallen Sweden Switzerland Opponent Professor of Practice Tomi Dahlberg University of Turku Finland The originality of this thesis has been checked using the Turnitin OriginalityCheck service. Copyright ©2020 author Cover design: Roihu Inc. ISBN 978-952-03-1734-8 (print) ISBN 978-952-03-1735-5 (pdf) ISSN 2489-9860 (print) ISSN 2490-0028 (pdf) http://urn.fi/URN:ISBN:978-952-03-1735-5 PunaMusta Oy – Yliopistopaino Vantaa 2020 ABSTRACT Digitalization is an important modern phenomenon, and examples can be found both in our daily lives as well as in the business world. Digitalization challenges us to question existing business processes and makes it possible to increase their flexibility and functionality. Fully utilizing the opportunities offered by digital technology is currently one of the most significant challenges for organizations. This research is geared toward understanding organizations’ digitalization preparedness. Enterprise architecture management is a comprehensive management mechanism which considers business and information technology (IT) processes. The maturity model is a tool that illustrates the maturity of an organization according to specified criteria. Enterprise architecture maturity models have been used in this work because these models can be used to measure the maturity of an organization. The research included participants from the Finnish public sector and large and medium-sized companies within Finland. Only municipalities within the public sector were included. Research data were collected via surveys, which were repeated three times in order to obtain comparable samples. This study therefore utilizes the longitudinal method. This work provides Massachusetts Institute of Technology (MIT) maturity level information for all businesses surveyed and represents new knowledge about the maturity levels of the Finnish public sector as well as large and medium-sized companies within Finland. Additionally, the MIT maturity levels can also be measured using a planned questionnaire with other research groups outside of the research groups studied in this work. The research results indicate that large companies have adopted enterprise architecture management and have centralized IT management organization. Large companies have also engaged in a significant amount of digitalization development activities. These companies had the highest enterprise architecture maturity levels and were therefore better prepared for digitalization than the Finnish medium-sized companies and Finnish public sector. This study has also shown that the medium-sized companies surveyed had not adopted enterprise architecture management methods. They instead focused on iii implementing digitalization projects. This finding supports the current understanding from the literature that medium-sized companies typically adopt an experimental working model. The maturity of the medium-sized companies were initially the lowest, but they were able to increase their maturity faster than the other research groups. The medium-sized companies tried to benefit from digitalization, but were not as well prepared for digitalization as large companies. Public sector digitalization was the Finnish government’s top priority project. However, the benefits of digitalization have been rather limited, despite high expectations. According to the results of this study, enterprise architecture is more visible in the public sector than in the private sector because functioning enterprise architecture management was required by the information and communication technology (ICT) law for public administrators. The Finnish public sector did not invest as heavily in concrete digitalization activities when compared with the other research groups. Concrete digitalization projects enhanced enterprise architecture maturity more than solely methodology-focused enterprise architecture management mechanisms, especially those forced by the ICT law. This suggests that it would be beneficial to start more concrete digitalization activities. The public sector had the lowest maturity level, despite active enterprise architecture work and digitalization promotion; this suggests that the Finnish public sector still struggles with its preparation for digitalization. I recommend that future enterprise architecture research place additional focus on small and medium-sized companies to enable their adoption of enterprise architecture practices. Small and medium-sized companies should be encouraged to evaluate the benefits of enterprise architecture for their organizations. Researchers should also focus on providing additional assistance to small and medium-sized companies to enable them to benefit from digitalization, by offering them more appropriate enterprise architecture methods. iv TIIVISTELMÄ (ABSTRACT IN FINNISH) Digitalisaatio on tärkeä moderni ilmiö ja esimerkkejä löytyy sekä päivittäisestä elämästämme että liike-elämästä. Digitalisaatio haastaa meidät kyseenalaistamaan olemassa olevat liiketoimintaprosessit ja mahdollistaa niiden joustavuuden ja toimivuuden lisäämisen. Digitaalitekniikan tarjoamien mahdollisuuksien täysimääräinen hyödyntäminen on tällä hetkellä yksi organisaatioiden merkittävimmistä haasteista. Tämä tutkimus suuntautuu organisaatioiden digitalisointi valmiuden ymmärtämiseen. Yritysarkkitehtuurin hallinta on kattava johtamismekanismi, joka ottaa huomioon liiketoiminnan- ja tietotekniikan prosessit. Kypsyysmalli on työkalu, joka kuvaa organisaation kypsyyttä määriteltyjen kriteerien mukaisesti. Tutkimuksessa on käytetty yritysarkkitehtuurin kypsyysmalleja, koska näitä malleja voidaan käyttää organisaation kypsyyden mittaamiseen. Tutkimukseen osallistui Suomen julkinen sektori ja Suomen suuret ja keskisuuret yritykset. Julkisella sektorilla vain kunnat olivat mukana tutkimuksessa. Tutkimustiedot kerättiin kyselyillä, jotka toistettiin kolme kertaa vertailukelpoisten näytteiden saamiseksi. Näin ollen tämä tutkimus hyödyntää pitkittäismenetelmää. Tutkimus tarjoaa Massachusetts Institute of Technology (MIT) kypsyystasotiedot tutkimusjoukoille ja edustaa uutta tietoa julkisen sektorin sekä suurten- ja keskisuurten yritysten kypsyystasoista. Lisäksi MIT-kypsyystasoja voidaan mitata suunnitellulla kyselylomakkeella myös tutkimuksen ulkopuolella oleville joukoille. Tutkimustulokset osoittavat, että suuret yritykset ovat ottaneet käyttöön yritysarkkitehtuurin hallinnan ja keskittäneet IT-johtamisen organisaation. Suuret yritykset ovat myös sitoutuneet merkittävissä määrin digitalisoinnin kehittämistoimintaan. Suurilla yrityksillä oli korkein yritysarkkitehtuurin kypsyystaso, ja siksi ne olivat paremmin valmistautuneita digitalisointiin kuin keskisuuret yritykset ja julkinen sektori. Keskisuuret yritykset eivät ole käyttöönottaneet yritysarkkitehtuurin hallinnan menetelmiä. Sen sijaan ne keskittyivät digitalisointihankkeiden toteuttamiseen. Tämä havainto tukee kirjallisuuden nykyistä käsitystä, jonka mukaan keskisuuret yritykset käyttävät tyypillisesti kokeellista toimintamallia. Keskisuurten yritysten maturiteetti oli aluksi alhaisin, mutta ne pystyivät kasvattamaan maturiteettia nopeammin kuin v muut tutkimusjoukot. Keskisuuret yritykset pyrkivät hyötymään digitalisoinnista, mutta ne eivät olleet yhtä hyvin valmistautuneita digitalisointiin kuin suuret yritykset. Julkisen sektorin digitalisointi oli Suomen hallituksen ensisijainen projekti. Digitalisaation hyödyt ovat kuitenkin olleet melko vähäiset korkeista odotuksista huolimatta. Tämän tutkimuksen tulosten mukaan yritysarkkitehtuuri on näkyvämpää julkisella sektorilla kuin yksityisellä sektorilla, koska toimiva yritysarkkitehtuurin hallinta vaadittiin julkishallinnon tieto- ja viestintätekniikan laissa. Julkisen sektori ei ole investoinut yhtä voimakkaasti konkreettisiin digitalisointihankkeisiin kuin muut tutkimusjoukot. Konkreettiset digitalisointiprojektit paransivat yritysarkkitehtuurin kypsyyttä enemmän kuin pelkät metodologiakeskeiset yritysarkkitehtuurin hallintamekanismit, etenkin lain pakottamat. Tämä viittaa siihen, että olisi hyödyllistä aloittaa konkreettisia digitalisointitoimenpiteitä. Julkisen sektorilla oli alhaisimmat kypsyysasteet aktiivisesta yritysarkkitehtuurityöstä ja digitalisoinnin edistämisestä huolimatta. Tämä viittaa siihen, että julkinen sektori kamppailee edelleen digitalisointi valmiuden kanssa. Tulevaisuuden yritysarkkitehtuuritutkimus tulisi keskittyä pieniin- ja keskisuuriin yrityksiin, jotta ne voisivat hyödyntää yritysarkkitehtuurikäytäntöjä. Pieniä- ja keskisuuria yrityksiä olisi rohkaistava arvioimaan yritysarkkitehtuurin
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