1

Major Jason Uppal, P.Eng. Open CA Level 3 Certified Chief Architect

Tamim Rahman Enterprise Architect

Project Management Strategic Planning

Portfolio Management

SDLC

ITSM

Strategic Themes & Balanced Scorecard

Enterprise Architecture

Organization Change Management

Business Transformation Made Straight-Forward

A Proven Approach that

Unites All Disciplines in an

Organization to Collaborate

Together to Enable

Disruptive Change

2

Copyright© 2013 QR Systems Inc.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or

by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the copyright

owners.

Boundaryless Information Flow™ and TOGAF® are trademarks and Making Standards Work®, The Open Group®, UNIX®, and

the “X” device are registered trademarks of The Open Group in the United States and other countries. All other trademarks are

the property of their respective owners.

All other brand, company, and product names are used for identification purposes only and may be trademarks that are the

sole property of their respective owners.

Published by QR Systems Inc. December 2013

First Published as Business Transformation as an Enterprise Capability, November 2012

Any comments relating to the material contained in this document may be submitted to:

QR Systems Inc.

100 Arbors Lane, Suite A

Woodbridge, Ontario L4L 1A1

Or by email to: jason.uppal@qrs3E.com

3

TABLE OF CONTENTS IN BRIEF

WHY YOU SHOULD READ THIS BOOK .............................................................................................. 4

PREFACE ..................................................................................................................................... 5

ACKNOWLEDGEMENTS .................................................................................................................. 7

GLOSSARY OF TERMS ................................................................................................................... 9

CHAPTER 1: A CASE FOR CHANGE ................................................................................................. 15

CHAPTER 2: FRAMEWORK CONFUSION .......................................................................................... 33

CHAPTER 3: THE BUSINESS TRANSFORMATION CAPABILITY............................................................. 70

CHAPTER 4: BUSINESS TRANSFORMATION SERVICES ..................................................................... 88

CHAPTER 5: INDUSTRIALIZE THE BUSINESS TRANSFORMATION CAPABILITY ................................... 166

CHAPTER 6: CASE STUDIES OF CAPABILITY-BASED THINKING ....................................................... 220

CHAPTER 7: AN APPLICATION OF BUSINESS TRANSFORMATION ..................................................... 243

CHAPTER 8: BUSINESS TRANSFORMATION TEMPLATES AND SAMPLES ............................................ 262

NEXT STEPS ............................................................................................................................. 267

Please see the Chapter page for more insights into the topics covered

Why You Should Read this Book

4

Why You Should Read this Book

Do you get excited about doing something new?

Are you looking to make something better?

Are you driven by challenge?

Does the prospect of change excite you but also cause panic as to how it can be realized?

Have you wondered why even straight-forward initiatives get bogged down and what can be done

to improve their chances of success?

Are you eager to realize complex change and transformation?

If you answered “yes” or “maybe” to any of the above questions, welcome to the Business Transformation community!

This book is intended for all audiences and all levels to understand key considerations of how to make Business Transformation

more reliable and straight-forward in its application and success. If you are a consumer of transformation, you will want to

focus on chapters 1, 2 and 3. For those that are responsible for transformation, chapters 4 and 5 will show you the services

that are needed to realize the expected business outcome.

Business Transformation does not need to be left to chance; this book will show you a systematic approach and articulate the

skills that you need to realize the goals of the many. When business transformation does not deliver, those involved with it

are not the only ones that loose; the entire organization is set back. Together, it is our collective aspiration that we are able to

help the Business Transformation community be successful so that we all can be part of the benefit.

We hope that you can be part of the community and take the next steps highlighted at the end of this book.

Preface

5

Preface

I have been working in the business transformation

industry for the last 25 years. During this time, a few

things have become clear: business transformation leaders

require technical skills to define comprehensive and

complete technical solutions and equally important, also

require skills to build consensus among all affected

stakeholders. About 25 years ago, one of my mentors

pointed out a simple formula: amount of change is equal to

the product of the quality of the technical solution and the

degree of commitment by all. If you have a one hundred

percent complete solution and zero commitment, the

resulting change will effectively be zero.

With this premise, I started my career as an industrial

engineer, then as a project leader and eventually graduated

to Enterprise Architect. Over the years, I have worked in

manufacturing, banking, insurance and healthcare

industries which helped me earn the Open CA Level 3 Chief

Architect designation in January 2012. It is my experience

that for Business Transformation Professionals to be

effective, they need to be scattered throughout the

organization and also ensure that each professional has the

right skills; the Open Group CA program does well in

articulating these necessary skills and competency.

This book is based on my experience as a Business

transformation leader and highlights the case for change,

how a myriad of frameworks help paralyze the organization

as opposed to liberating them from indecision, advocate a

business transformation value chain, define precisely who

does what, when, how, to-what level of detail and who is

accountable for the quality of work at each phase gate as

well as for the final outcome. Furthermore, the two content

chapters near the end of this book proposes a method to

industrialize the business transformation capability within

the organization and a sample of end-to-end architecture.

This book was originally titled “Business Transformation as

an Enterprise Capability” and in this update certain content

has been refreshed to reflect our new insights.

This book also proposes that Enterprise Architecture is done

throughout the organization by Business Transformation

Professionals and is not the domain of a few in one

department; such as commonly found in IT or any other

line of business. Secondly, in this book we specify the skills,

how the work needs to be done, what artifacts and

deliverable are produced and how to validate their quality.

The target audience for this book includes all resources

within an organization that spend at least a portion of their

time leading or being part of change programs. This book

provides step-by-step direction, however, we recognize the

unique culture of each organization and strongly advise the

reader to adapt the business transformation capability

outlined in this book to suite your organization’s culture and

objectives.

Finally, I want to thank you for being part of our Business

Transformation Community and it is my hope that

collectively, we can help organizations achieve their vision

Preface

6

Sincere Regards,

Jason Uppal, P.Eng.

Chief Architect, QRS

Key Contributors

Tamim Rahman, CISSP, CISM, TOGAF® 9.1

Enterprise Architect, QRS

Focus: Help clients understand their business and technical models to enable the right business decision.

Tamim’s passion is to help organizations successfully adopt change that creates a better working

environment as well as realize the expected business value.

Stewart Carroll

Enterprise Architect

Focus: Bringing all key members to the table to make the right decision.

Stewart brings passion and energy to helping all overcome the hurdles that are faced when it comes to

complex business transformation.

Acknowledgements

7

Acknowledgements

This book is a work in progress and will always remain a work in progress. I thank all our students, consultants and

practitioners who have helped define, debate and spilled countless pints of ‘beverage’ over its content. Your contribution is

sincerely appreciated by so many.

Business Transformation is a like a Jazz Band…

The organization’s Business Transformation practice is like a Jazz band, depending on the stage of the work, a different

professional discipline is in the lead. It is this collective behaviour of various disciplines and musicians that create a lasting

competitive advantage and memorable music.

See Miss Doreen’s band in the video below and how various artists take the lead at different times, produce great music

despite all the traffic and distractions around them.

Acknowledgements

8

Figure 1: Doreen's Jazz Band plays ‘Do You Know What It Means to Miss New Orleans’

If you are ever in New Orleans, do stop by Miss Doreen’s street band in French Quarters at the corner of Royal and St. Peter

streets.

Video 1: Book Orientation

As you review the remaining sections of this book, keep in mind of the following two questions:

1. What is preventing you from doing what is being discussed in your organization today? List these obstacles.

2. What obstacles can you tackle on your own and whose help will you need for the ones that remain?

Glossary of Terms

9

Glossary of Terms

Throughout the chapters of this book, the context of terms used is critical to

understanding Business Transformation. This section highlights some of

these key terms used throughout the chapters.

Glossary of Terms

10

Architecture – The articulation of a problem through the identification of its components, their relationships with one another

and the constraints/obstacles that need to be overcome for a successful resolution. The architecture also expresses the

performance of the capabilities needed to obtain the desired business outcome.

Attributes of a Capability – Components, Measures, Metrics: Current and Target, Process, People and Technology.

Automation – The ability to perform a well-defined process more efficiently so that it can yield consistent and repeatable

results.

Balanced Scorecard – A construct used by management and decision-makers to assess the performance of the enterprise or

capability in real-time. When expectations are not being met, the Balanced Scorecard provides guidance of where to direct

focus.

Benchmark – Ability to compare with others: in-house, industry and ideal.

Business Outcome – The results of an organization's output in the marketplace. The outcome can be expressed in terms of

realized value for the organization that was planned against the actual results.

Business Strategy – Defines what capabilities will be consumed to achieve prescribed business outcomes as well as what

investments will be made in specific capabilities to transition those capabilities to a new state to enable the business outcomes.

Business Transformation – In this context Business Transformation as a Capability is what we have the ability to do. In this

case, the Business Transformation Capability applies to all three: Run, Grow and Transform.

Business Transformation Professional – An individual from a recognized discipline that helps an organization plan,

implement and realize changes needed to achieve the desired business outcome.

Capability – Ability to do something meaningful in support of the Enterprise Mission, Vision and Values. To maintain required

level of granularity – define Executive and Directive Capabilities. They are hierarchical. Executive Capabilities is what the CxO

team views. Improvement context is defined in terms of opportunities and threats. Supporting Capabilities relate to Executive

Capabilities and their improvement context is strength and weakness.

Capability Based Value Delivery Life Cycle (CBvd™) – Divided into four phases (G0 to G4), this life cycle illustrates the

stages of development for a capability and in each phase, there are activities that are performed to mature the capability to

the next phase.

Glossary of Terms

11

Capability Life Cycle – Please see "Capability Based Value Delivery Life Cycle".

Capability Roadmap – A view of how to direct organizational investment to build/strengthen a capability to achieve a desired

business outcome.

Competency – Competency is associated with Human Skills. Each competency has skills, knowledge, proficiency – required,

available, Primary and secondary, Competency Rating – self assessed, managers assessment, actually measured, competency

development plan. Enterprise Architecture is a competency with an organization. There are number of people have this

competency at certain level of competency rating.

EA – Enterprise Architecture, or Enterprise Architect; check context for applicability

Enterprise Capability – Defines what is needed from the Enterprise Value Chain to realize the strategic intent of the

organization. This term is generically used to describe Executive and Supporting capabilities; examples include 1) ability to

service customer and 2) ability to engineer a product. As a further example, the IT organization executive capability can be

defined as the ability to provide information effectively to implement the TOGAF® concept of “boundaryless information

flow™”.

Executive Capability – Defined at the strategic level of the organization and implemented by support capabilities that are

supported by one or more lines of business.

Five Forces Analysis – A framework for industry analysis and business strategy development; formulated by Michael E.

Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that

determine the competitive intensity and therefore attractiveness of a market.

1. Threat of new competition

2. Threat of substitute products or services

3. Bargaining power of customers (buyers)

4. Bargaining power of suppliers

5. Intensity of competitive rivalry"

Ideal Architecture – Adapt to conform to Enterprise constraints and then define the Transition Plan and Business Case.

Glossary of Terms

12

Ideal Roadmap – A roadmap of what is possible to achieve demonstrated through an industrial example or through valid

engineering.

Industrialize – To build an Enterprise capability that is repeatable and delivers consistent outputs through a defined and

understandable process.

Instinctual Architecture – Often done by senior management at the strategic level where they assess the overall landscape

of enterprise capabilities, capability performance, strategic advantage, strength of current and/or new competitors, through

senior management instincts. Instinctual architecture often helps define the first iteration of business strategy which is later

validated, refined or refuted through formal scientific management principles.

Levels of Architecture Abstraction – The following terms describe the levels of architecture performed throughout the

capability life cycle.

Instinctual: why, what, how and with what in aggregate – know ‘where to kick furnace’, this level stems from a “gut

feel” of what needs to be done.

Contextual: “why” are these outcome important and what processes and capabilities will be affected?

Conceptual: “what” – Describes what must be managed in order to transition capabilities to the right performance level.

Logical: “how” – Provides detailed analysis of each process of how work output is produced.

Physical: “with what” – Considers the tools and components used in the production environment."

Performance Measure – An indicator used to measure the performance of a capability. For performance measures to be of

value, they need to be measured consistently from a specified source.

Performance Metric – The numeric value of the performance measure. Metrics can be used to express desired capability

performance at various transition points to the expected target.

Phase Gate Activities – Activities performed in each phase of the capability life cycle.

Pragmatic Roadmap – Describes what can be achieved given the organization's culture, structure and constraints.

Glossary of Terms

13

Primary Activities – These are the activities that realize the final value product of the organization. Without a primary

activity, the organization will be unable to realize its value chain. Activities that perform Inbound Logistics, Operations,

Outbound Logistics, Marketing and Sales and After Sales Service would be primary activities.

RACI – An acronym that describes a role as being: Responsible, Accountable, Consulted and Informed.

RACIS – See RACI; the "S" stands for Supported.

Roadmap – A high-level view of the milestones that need to be achieved in resolving Enterprise Architecture requirements.

RPO – Recovery point objective

RTO – Recovery time objective

SMART – An acronym that usually precedes objectives and stands for: Specific, Measurable, Achievable, Relevant, Time-

Bound.

Strategic Architecture – Provides top-down direction to the organization regarding the improvements needed to Executive

Capabilities and their impact on Supporting Capabilities. This type of architecture, analogous to instinctual and contextual, is

executed at the G0-G1 phase of the Capability Life Cycle.

Strategic Intent – An extension of the Enterprise vision within a given time frame. The vision might say: be the leader in

customer service. The Strategic Intent could be expressed as: achieve 99.3 % customer Satisfaction by 2015. The Strategic

Intent guides the performance required of existing Executive Capabilities or the creation of one or more required Executive

Capabilities.

Strategic Themes – Captures the essential element of what a business strategy needs to do to achieve the strategic intent of

the organization. The strategic theme aligns with an objective and purpose and is understood uniquely way through different

perspectives.

Strategy Architecture – Articulates the strategy (plan and approach to achieving the strategic intent) to implement the

strategic themes of the organization. Impacts on all capabilities are understood and the necessary investment portfolios

needed to achieve the capability performance are also established as this architecture is executed at the G1-G2 phase of the

Capability Life Cycle. This is also analogous to conceptual architecture.

Glossary of Terms

14

Support Activities – These are activities that support the primary value product in realizing the final value product. Activities

that perform Firm infrastructure, Human Resource Management, Technology Development and Procurement would be support

activities.

Systems Thinking – The ability to understand the components of the problem, their relationship with one another, their

architecture that then can be used to evaluate possible resolutions. This is an important ability (skill) for a Business

Transformation Professional.

Transition Plan – More detailed than a roadmap, a transition plan contains more details of organization state and expected

capability performance at each transition point towards the target.

Value Chain – A strategic view of the enterprise’s chain of services/activities that bring the final value product to market. A

value chain can also be applied to a capability. The value chain shows the primary and support activities that accomplish the

organization’s value delivery.

Value Statement – A construct used to articulate the required value that one or more work packages can achieve.

Wicked Problem – A scenario where no possible solution will satisfy all problem constraints expressed in the architecture.

Possible approaches to resolving a wicked problem is to lessen its scope, change the problem understanding or re-evaluate the

problem when there are changes in the constraints imposed.

Work Package – The term used to express initiatives that help mature a capability along the Capability Life Cycle. Work

Packages are handled through all 4 phases of the Capability Life Cycle and are often call projects in the G2-G3 phase.

Chapter 1: A Case for Change

15

Chapter 1: A Case for Change

“Intellectuals solve problems, geniuses prevent them.”

Albert Einstein

Abstract

In today’s economic climate, it is not sufficient to rethink your organization’s

business model once per economic cycle. Organizations need to keep track

and be ready to pounce on opportunities created by changes in customer

behaviour, in known and hidden competitors, political direction as well as

technological advances.

Change is inevitable; I would even go as far as saying change is good. To

realize benefit, you need to be ready to take advantage of the winds of

change; otherwise it can easily become cross or turn against you.

Information and Communication Technology (ICT) capabilities enable us to

capitalize on the opportunities. You need to make sure your organization has

the capability and not just an empty promise that we are good without

validation.

Key Chapter Sections

A Case for Change…16

Industry Challenges… 17

Information & Communication

Technology… 19

About this Book… 21

Layout of the Book… 25

Assessment: ICT, Your Organization

and Enterprise Value… 28

Chapter 1 References… 32

Chapter 1: A Case for Change

16

A Case for Change

Discontinuities in an industry may stem from any

combination of internal or external forces. Efficient change

management requires the ability to identify what causes

these discontinuities and how to realign resources quickly

to take advantage of them.

Here is a brief list of forces that often lead to

discontinuities:

Acquisitions

According to Organizational Change Management,

acquiring or merging with another company has a

profound effect on organizational structure. The deletion

of duplicate departments reduces cost yet talent from

both companies can be utilized in the resulting corporate

structure. However, job functions will be altered to fit

the business model of the company and management

positions may also be eliminated. The activity of

acquisitions often causes discontinuities both within the

acquiring and acquired companies as well as for others in

the same and complementary markets.

Job Duplication

Multiple managers or executives within an organization

may create the need for change. Employees can either

become frustrated with trying to please more than one

manager, or they may find ways to use opposing views

by multiple managers to meet their needs. When

employees encounter duplicate management positions,

the structure of the organization needs to be altered to

eliminate the excess positions and bring departments

into line with the proper individual manager.

Marketplace Changes

As the marketplace changes, so do the structural needs

of the organization. For example, as fuel prices rise,

customers will likely demand more fuel-efficient vehicles.

If you own a car dealership known for selling large SUVs

and vans, you may have to shift your focus to smaller

and more fuel efficient vehicles. This requires bringing

in sales people and service technicians accustomed to

selling and working on such vehicles. Marketing then

needs to change to target the more fuel efficient car-

buying public and the previous methods should be

eliminated.

Process Changes

Changes to the way an organization does business can

cause structural changes. If your organization was

accustomed to allowing autonomous departments, then

a change to a centralized way of doing business will

impact organization structure. If a new department has

been created to address a demand, the structure must

change to accommodate the new group. For example, if

the backlog of archived files becomes so large that an

archiving department needs to be created, that can

change the flow of information in your organization and

have a significant effect on corporate structure.

Technological Changes

Chapter 1: A Case for Change

17

Changes in technology, as well as public acceptance of

technology, often lead to major discontinuities. Case in

point: the internet, affordable mobile phones and data

services as well as user centric user interface have

spawned new industries. LinkedIn, Facebook, Twitter

has decimated once mighty publishing empires.

Video 2: Discontinuity: An Opportunity to

Change the Business Model

In this section, I will briefly discuss forces that cause

discontinuities in selected industries and how Information

and Communication Technology (ICT) capabilities can help

you pounce on these opportunities.

Industry Challenges

Let’s briefly review a few industries that are going through

significant disruption and quickly review how these

disruptions are creating discontinuities and giving birth to

new opportunities for improvement.

Healthcare Delivery

The healthcare industry has several factors in its favour: a

great demand for services and a host of new products

contribute to its growth. In fact, a 3.8 percent growth in

revenue for the industry is expected in 2013, according to

Fitch Ratings.

While healthcare has seen surging demands, it faces

serious challenges especially along cost for services and

quality of care delivered; other challenges include: [6]

Changing the industry’s business model from

volume to value

Changing the model for delivering care

Partnering with doctors and other disciplines

Containing overall costs and of services delivered

Coping with a shortage of doctors; especially in

rural areas

Planning for growth

Pushing healthcare reform

Video 3: Opportunities in Healthcare

Chapter 1: A Case for Change

18

Health Care Insurance

The health insurance industry has recently confronted many

external challenges such as an uncertain regulatory

environment, meeting the demand of more price and

service-conscious consumers, a fiercely competitive market,

shifts in customer composition and a slowly recovering

economy.

The earnings performance of most American players

(UnitedHealth Group Inc., CIGNA Corp., WellPoint Inc.,

Aetna Inc. , Humana Inc. and Coventry Health Care Inc.)

were primarily driven by industry-wide factors such as

higher enrolment, increased premiums, lower-than-

expected medical care utilization and improved commercial

insurance pricing. Most of the carriers even raised their

2012 earnings estimates which reflect optimism for fourth

quarter results as well. [7]

While health insurance companies have been meeting or

beating performance expectations, the industry has several

dark clouds on the horizon both in the US where the private

insurance industry exists and in other countries where

governments act as insurance providers.

Cost of healthcare has been increasing faster than

GDP growth

Due to the aging population, pressure from

increasing cost will not subside

The public’s willingness to pay additional taxes is

declining

The public perception that there are efficiencies to

be gained only if the industry was forced to re-

evaluate how it exploits the latest technologies and

processes

In newly developed as well as in BRIC (Brazil, Russia, India

and China) countries, as the size of the middle class grows

it will start to demand publically funded high quality

affordable care; this market will develop new models of

care delivery that will compete across the borders of

nations.

Manufacturing

The manufacturing industry has been beleaguered by

obstacles. IN North America and elsewhere, nearly every

news outlet has covered the closing of factories, labour

disputes between companies and their employees or

reductions in the work force due to the shift of labour to

off-shore locations. The reputation of the industry has been

marred by low wages and less than desirable working

conditions in addition to quality-control problems.

Challenges facing the Manufacturing Industry and taking

the first steps toward the revitalization of manufacturing

according to the Association of Manufacturing Excellence

(AME)[4] is joining with its corporate members and other

leading learning organizations to adopt the following top

three priorities for revitalizing manufacturing:

1. Establishing consortiums to help sustain and grow

businesses through sharing technology and

innovative ideas;

Chapter 1: A Case for Change

19

2. Re-shoring (in sourcing);

3. Redeploying Training Within Industry (TWI)

programs to train or retrain workers who have the

ability to work in advanced manufacturing jobs,

which will ultimately revitalize manufacturing and

re-energize the economy.

This will also require engagement in reforming public

education to produce career ready citizens.

Construction

In the fields of architecture and civil engineering,

construction is a process that consists of building or

assembling infrastructure. Far from being a single activity,

large scale construction is a feat of human multi-tasking.

The construction industry everywhere faces similar

problems and challenges. However, in the developing

countries, these difficulties and challenges are present

alongside a general situation of socio-economic stress,

chronic resource shortages, institutional weaknesses and a

general inability to deal with the key issues. By and large,

the challenges for the construction industry in most

economies are: [1,2,3]

Enhancing the professionalism of the industry

Raising the skills level

Improving industry practices and techniques

Adopting an integrated approach to construction

Developing an external wing; a collective

championing effort for the construction industry

Government Services

In recent years, governments around the globe have been

fighting a common battle on three fronts:

1. A global downturn in the economy has led to

increased fiscal pressures and difficulties in

balancing budgets.

2. Growing expectations that public-sector

organizations need to be more accountable to

stakeholders and deliver better public services

have left governments struggling to provide more

citizen-focused services with less funding.

3. Impending labour shortages as an aging workforce

retires means many governments will find it

difficult to retain the knowledge workers needed to

run their operations. In fact, some governments

are already starting to experience skills shortages

in certain areas, such as information technology.[5]

How can we exploit ICT capabilities to take advantages of

these discontinuities and create lasting competitive

advantage?

Information & Communication

Technology

Information and Communication Technologies (ICT) have

been at the heart of economic changes for more than a

decade. ICT producing sectors and ICT employment

contribute to technological progress and productivity

growth.

Chapter 1: A Case for Change

20

The industry-based definition of the ICT sector is based on

Revision 3 of the International Standard Industrial

Classification (ISIC Rev. 3).

Definition

The principles underlying this definition are as follows.

For manufacturing industries, an ICT product must

fulfill the function of information processing and

communication – including transmission and display

– and they must use electronic processing to

detect, measure and/or record physical phenomena

or control a physical process.

For services industries, ICT products must enable

information processing and communication by

electronic means.

These two measures of ICT production are expressed as a

share of the total value added in the manufacturing and

business services.

Two measures of ICT employment are shown here:

a narrow measure, comprising of ICT specialists

whose job is directly focused on ICT such as

software engineers; and

a broader measure including jobs that regularly use

ICT, but are not focused on ICT per se (these

occupations include scientists and engineers, as

well as office workers, but exclude teachers and

medical specialists for whom the use of ICT is not

essential for their tasks).

These two measures of ICT employment are expressed as a

share of total employment.

Significant Statistics

In 2008, the ICT sector accounted for between 3.7%

(Switzerland) and 13.9% (Finland) of value added in

manufacturing and business services of the 28 OECD

countries with available data. The average share for the

OECD was 8.2%. Over 1995-2008 the ICT share in value

added has increased in all OECD countries except Austria (-

1.3%), Australia and Canada (-0.8%).[8]

ICT and Enterprise Value

In addition to ICT related job creation, consider the

following three scenarios in which ICT can also create

incremental value:

Process Efficiency: improve the efficiency of an

existing process by delivering the right information

to the right person in a secure and reliable manner;

this includes information that can enable high

quality decision/action. For simplicity reasons, let’s

ignore the opportunity cost of information not being

at the right place. Consider an example of value

due to process efficiency: In a hospital ward

setting, a nurse needs to communicate the

medication order change for one patient to the

physician. The nurse could: 1) find the doctor and

communicate the request, 2) page the doctor and

have the doctor respond or 3) doctor responds by

an SMS message. All three options are practical;

Chapter 1: A Case for Change

21

however the efficiency gain from the 1st to 3rd

scenario is close to 300%. [9]

Quality: Technology can improve the consistency of

output by improving the repeatability of the

process. As evident by industrial robots, CNC

(computer and numerical controlled) machines,

semi-conductor technology can help produce

consistent quality because unlike the people

element, they do not suffer from fatigue, distraction

or the effects of repetitive and tedious tasks. Their

inherent accuracy and repeatability also means that

you can count on a high quality finish for every

product produced.

New Products and Services: By leveraging ICT

capabilities, you can develop new products and

services. Case in point: In the pre-internet era of

just 15 years ago, booking business travel was a

full-time job for many office workers. Today, I can

book my air ticket, hotel, rental car and

entertainment in less than three minutes.

Video 4: Work Outputs of the ICT

Professional

About this Book

When it comes to Business Transformation, there is a lot of

confusion among various disciplines and professions. Each

profession has developed their own framework within their

own pre-defined boundary of scope. As such, there are

overlaps and gaps and it results in organizations

continuously failing to get the most out of their investment

in ICT.

Learning Objective

The learning objectives of this book include:

Establish a common vocabulary among disciplines

engaged in delivering value from leveraging ICT

capabilities and define roles and responsibilities of

each discipline

Provide a mechanism to measure the overall

contribution of ICT towards the enterprise value,

provide sufficiently granular tools for management

to hold each profession accountable through a

transparent and accountable process

Help the Business Transformation professional define

what services they provide, how and what is the

value of each artifact and deliverable

Through an end-to-end case study, demonstrate

how enterprise resources are aligned to achieve

enterprise goals and how to constantly realign and

leverage enterprise resources in a constantly

changing business environment

Based on commonly accepted frameworks, define a

process by which an enterprise Business

Transformation Capability is defined and matured

over time

Chapter 1: A Case for Change

22

Finally, it is the objective of this book to provide a

mechanism by which contribution of ICT can be

measured and how ICT professionals can help yield

the maximum output from investment in ICT

With respect to the common vocabulary among

practitioners, we would encourage the reader to review the

terms defined in section 8. A common language is essential

to communication and we encourage you to review the

terms described so that we can all have the same

understanding.

Target Audience: Business

Transformation Professionals

Who is a Business Transformation Professional?

If you are involved in the definition, development and

exploitation of enterprise capabilities, you are a Business

Transformation Professional. Your role could be an

Executive, Strategic Planner, Enterprise Architect, Portfolio

Manager, Program Manager, Delivery Lead, Process

Specialist or an Organization Change Manager among

others. You may be stationed in information technology,

finance, human resources, the front line or any other

department. Other common enterprise roles include

business analysis, IT operations and quality assurance. If

you are involved in improving the utilization of current

enterprise resources toward the betterment of the

enterprise vision, you are a Business Transformation

Professional.

Reasons why you should read this book

Understand why the Business Transformation

capability is essential for your organization

Learn how to link your performance to the

performance of your organization’s CEO

Demystify the Business Transformation Practice

Understand how to build, exploit and nurture the

Business Transformation Capability

Understand what the required skills are and how to

develop them

Understand how the Business Transformation

capability engages the entire organization

Move the Business Transformation conversation

from an academic exercise to meaningful action

plans

Learn to do your job and help your organization

thrive and not just survive

Help democratize the work in your organization, find

joy in work and help others find joy in their work

Personal Learning Objectives

Your feedback is important, write down three things that

prevent you from doing your job and also prevent you from

contributing toward the enterprise vision of your

organization. If at the end of this book, if you still don’t

know how to eliminate these obstacles, I will refund the

purchase of this book.

Chapter 1: A Case for Change

23

Enterprise Vision [your organization’s vision statement]

Your Value system: write down how your value system aligns with your organization’s vision.

Chapter 1: A Case for Change

24

Write down three things that prevent you from living your own value system and prevent you from

expending all of your energy towards enterprise vision.

1:

2:

3:

Chapter 1: A Case for Change

25

Layout of the Book

This book is organized into eight chapters. At the end of

each chapter, there are some exercises for students to

ensure they have a good understanding of the content

covered in the chapter. The last chapter is a comprehensive

case study that describes the architecture for ACME

Healthcare, a fictitious healthcare delivery organization.

Chapter 1: A Case for Change

This chapter looks at a number of industries, outlines

opportunities and describes how discontinuities in these

industries can be addressed by leveraging ICT capabilities.

Chapter 2: Framework Confusion

There are several business transformation frameworks that

are available in the market place. They cover portions of

the business transformation value chain and often have

conflicting vocabulary and measures. The purpose of this

chapter is to briefly discuss each framework and identify

overlap:

Business Transformation Frameworks – Five

forces analysis, value chain, strategic themes

mapping, balanced scorecard, enterprise

architecture, system thinking portfolio management,

project management, system development life cycle,

organization change management, IT service

management, lean sigma, IT Governance and ValIT.

Common Ground and Gaps – Within the business

transformation context, define how these

frameworks interact to help make the right decisions

and highlight how the vocabulary gaps cause

unnecessary confusion and productivity loss.

Gaps no Framework can Address – within the

business transformation context, there are gaps that

no framework can address. This section will provide

the necessary structure to define the right

deliverables and how they help in the decision

process.

Chapter 3: Business Transformation

as an Enterprise Capability

Why is the business transformation capability important?

How will you know its current state in your organization and

how can we go about maturing it?

Business Transformation as an Enterprise

Capability: Describes why the Business

Transformation capability matters.

Capability Based Value Delivery Process

(CBvd™): Introduces how to exploit the concept of

capabilities, capability performance and business

outcome to create an accountable and responsive

culture in the organization. Also discussed are roles

and responsibilities of various professionals within

the CBvd™ process and how their professional skills

can be evaluated.

Chapter 1: A Case for Change

26

Chapter 4: Business Transformation

Services

What is the role of various disciplines and teams and how

can they be held accountable?

Strategic Intent, Enterprise Capabilities and

Business Strategy - Based on five forces analysis,

current value chain and business goal define

Enterprise Capabilities, their performance measures,

performance metrics and business strategies that

will be required to transition current capabilities to

target.

Supporting Capabilities - Enterprise capabilities

then are decomposed into Supporting Capabilities

that are managed, developed and leveraged by each

line of business. This section defines the framework

to measure performance of each capability and how

to associate the capability performance into the

enterprise goals.

Architecture Roadmap for a Strategy: Using the

ADM (Architecture Delivery Methodology1), learn

how to define an Architecture Roadmap for each

Enterprise and IT Capability/Strategy. In most

cases, this roadmap considers what is possible

1 Part of the TOGAF

® Specification, http://www.opengroup.org/togaf/

without limiting our imagination by our own

organization’s constraints.

Enterprise Capabilities Transition Roadmap and

Business Case: Using the ADM, learn how to take

industry defined reference architecture for a

capability/strategy and adapt it to your

organization’s constraints and then define a

Transition Plan and Business case. The focus here

isn’t just to define the Transition Plan and Business

Case, but to also learn how to communicate it to key

stakeholders.

Transition Implementation Governance: Using

the ADM, learn how to ensure the Implementation

Program follows the agreed upon Transition Plan.

This section defines the deliverables and decision

rights not only for the system development life

cycle, but also for organization change required to

deploy and exploit the transitioned capabilities.

Post Implementation and Value Realization:

Using the ADM, learn how to exploit current

capabilities to help the organization achieve its

business goals. This section helps define the

continuous improvement plan for each capability,

measure its performance, link capability

performance to business goals and makes capability

governance real.

Chapter 1: A Case for Change

27

Chapter 5: Industrialize your Business

Transformation Capability

Learn how to make Business Transformation repeatable and

self-learning within the organization.

EA Practice (Business Transformation

Capability): How to build, nurture and exploit

value. Using the TOGAF® Skills Framework, learn the

relationship between Strategic Planning, EA, PPM,

SDLC, Organization Change and Value Management

and how the Business Transformation Capability

works with each discipline to help exploit Enterprise

Capabilities.

Business Transformation Capability Scorecard:

Learn how to determine if the Business

Transformation Capability is performing as expected

and how the Business Transformation Capability

performance scorecard can become an integral part

of corporate performance measures.

Industrialize the BT Capability: The Business

Transformation Capability is based on the Capability

Based Value Delivery (CBvd™) process. This chapter

introduces the student to major modules, the

relationship between theBTcloud and processes

necessary to implement a TOGAF® based Enterprise

Architecture Practice.

Chapter 6: Case Studies of Capability-

based Thinking

In this Chapter, a number of successful and less than

successful implementation of capability-based thinking are

presented. These examples are based on real-world

experience gained through previous consulting

engagements with client identities removed.

For each case study, the following information is presented:

Client industry,

Size of the Organization,

Enterprise and Scope,

Business Complexity,

Proposed Architecture,

Results (Outcome),

Lessons Learned and

Lessons for the Business Transformation Leader

Chapter 7: An Application of Business

Transformation

Learn how to represent the Enterprise architecture of a

fictitious healthcare delivery organization using techniques

described in previous chapters of this book.

Strategic Architecture: Translate strategy intent into

Enterprise capabilities and enterprise operations and

transformation strategies

Chapter 1: A Case for Change

28

Define supporting capabilities, their architecture,

measure performance and leverage

Define Architecture for a Business Strategy

Transition each capability to required performance

target

Define Standards Information Base and Repository

of Enterprise Capabilities

Putting it all together

Chapter 8: Business Transformation

Deliverables

Access templates and samples of the most common

Business Transformation Deliverables produced. Templates

and samples are provided by CBvd™ Phase Gate, more

information on how to execute Business Transformation

services articulated in Chapter 4 is available on

theBTcloud2.

Assessment: ICT, Your

Organization and Enterprise Value

The purpose of this section is to define an explicit

mechanism by which the impact of ICT (information and

communication technology) can be measured by the

enterprise’s bottom line. ICT often impacts both gross

margin drivers – cost of doing business – and total

revenue.

2 http://theBTcloud.com

ICT Operating Budget

Consider your ICT operating budget, this budget includes all

your ICT staff, cost of HW/SW licenses and Data Centre. As

an example, a healthcare insurance company had an ICT

operating budget of roughly 47 million dollars per year. By

developing a comprehensive Standards Information Base,

you can identify duplicate technologies, skills gaps and

overlaps; however to eliminate these redundancies you will

need to integrate these opportunities into the overall

Enterprise Business Strategy. If done properly, the cost of

ICT can be reduced by 20% as outlined by many studies

without increasing ICT related risks or reducing business

agility. This affects the cost variable of your gross profit

equation.

The opportunity: Achieve a 20% reduction in your ICT

operating budget.

ICT Capital Budget

This is the portion of the budget that the enterprise

allocates to change for the enterprise. At the top level – by

using strategic theme mapping and balanced scorecard –

senior management decides on capital budget and expected

return from these investments. Recently, we consulted for

a company that had an investment portfolio of 80 million

dollars with an expected return of 278 million dollars. Most

of this money was allocated to changes to ICT and business

operations.

Opportunity: considering the success rate of ICT projects,

what is the probability that the enterprise will actually yield

Chapter 1: A Case for Change

29

278 million dollars of return and costs will not exceed 80

million? Recently, a study done by Oxford[11] asked the

organizations to stress-test their change strategy. The

point they made was that if the cost of change increases by

four fold and expected benefit is reduced by four fold, is

this still a good investment plan?

Impact

Methods, techniques and structure outlined in this book will

help the reader manage the impact of ICT from two

perspectives:

1. Optimize the Cost of ICT without increasing

technology risks and reducing business agility

2. Ensure that ICT driven change actually produces

the expected returns and it is done in a transparent

and accountable fashion

Chapter 1: A Case for Change

30

Exercise: Assess your Case for Change and your Organization’s Preparedness

There are several considerations that need to be made when we are assessing a case for change. The following two tables

promote such considerations at the industry and organization levels to determine if there is a legitimate case for change.

Table 1: Changes in Market Condition

Subject Area No Impact Somewhat Dramatic

Are there changes in regulation, reporting needs and

increased legal scrutiny?

Are there changes in Customer expectations resulting from

the availability of mobility, social media and access to high

quality information through the internet?

Will consumer discontent – resulting from less than expected

levels of service – have an impact on your relationship with

your current customers as well as future prospects?

Accelerated Consolidation: Will industry consolidation have an

impact on your organization?

Strategic Globalization: Will new entrants from emerging

economies have an impact on your organization’s bottom-

line?

Will ICT capabilities like Big Data, unconstrained connectivity

and new sources of data have any impact on how you serve

your customers?

Chapter 1: A Case for Change

31

Table 2: Organization Readiness

Capability Area Yes No Unsure

Does your organization have explicitly defined enterprise capabilities and how do such

capabilities meet the enterprise vision and strategic Intent?

Does your organization have defined supporting capabilities – the decomposition of enterprise

capabilities – defined for each business unit and explicitly measured performance that

capability owners are held accountable for?

When the business change strategy is defined, does the strategy document include specific

references to which supporting capabilities will be affected and by how much?

For each business strategy, are the transition roadmap and business case defined before

embarking on the project execution phase?

Is each program and project manager held to cost, timeline and pre-established scope that is

defined in terms of measurable change to capability performance?

Before the project is officially closed, does the transitioned capability owner accept the

improved capability performance?

Is the performance of each capability measured continuously and linked back to the enterprise

vision and strategic intent?

If you answered “somewhat” or “dramatic” to any question in Table 1: Changes in Market Condition and “No” or “Unsure” to

any question in

Table 2: Organization Readiness then you should read on. Otherwise, either your business is immune to changes in the

marketplace or you are already doing what’s right; in which case this book will validate your current practices.

Chapter 1: A Case for Change

32

Chapter 1 References

1. Industry_Culture_A_Need_for_Change, http://www.construction-

innovation.info/images/pdfs/Research_library/ResearchLibraryA/Project_Reports/Industry_Culture_A_Need_for_Cha

nge.pdf

2. New challenges for construction training and certification http://www.csc-

ca.org/sites/csc/files/newsletters/dimensions_may10_en.pdf

3. Challenges of Construction Industries in Developing Countries: Lessons from Various Countries, G OFORI

Department of Building, National University of Singapore Architecture Drive, SINGAPORE 117566.

bdgofori@nus.edu.sg

4. AME_Whitepaper_Challenges Facing Industry 2011-02-24 FINAL

http://www.ame.org/sites/default/files/AME_Whitepaper_Challenges%20Facing%20Industry%202011-02-

24%20FINAL.pdf

5. Driving High Performance in Government: Maximizing the Value of Public-Sector Shared

Serviceshttp://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Driving_High_Performance_in_Govern

ment_Maximizing_the_Value_of_Public_Sector_Shared_Services.pdf

6. Growing Healthcare Industry Faces Challenges, http://www.openforum.com/articles/growing-health-care-industry-

faces-challenges/

7. Health Insurance Stock Outlook - Nov. 2012 http://www.zacks.com/commentary/24708/health-insurance-stock-

outlook-nov-2012

8. OECD Factbook 2011-2012 http://www.oecd-ilibrary.org/economics/oecd-factbook-2011-2012/investment-in-

ict_factbook-2011-73-en

9. Improving Patient Safety Through Provider Communication Strategy Enhancements,

http://www.ahrq.gov/downloads/pub/advances2/vol3/advances-dingley_14.pdf

10. Good reasons to invest in robots – ABB http://www05.abb.com

11. Why Your IT Project May Be Riskier Than You Think http://hbr.org/2011/09/why-your-it-project-may-be-riskier-

than-you-think/ar/1

Chapter 2: Framework Confusion

33

Chapter 2: Framework Confusion

“Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.”

Albert Einstein

Abstract

To help transform an enterprise, there are myriads of frameworks to

consider. While many frameworks are valid and useful, most of these

frameworks are deficient when they are integrated together to complete a

value chain.

This chapter outlines:

Major frameworks (not intended to be exhaustive) that are often

leveraged in business transformation programs

A mapping of these frameworks relative to how ICT is leveraged to

generate Enterprise Value

The intersection between frameworks and value chain processes highlights

gaps and overlaps. Furthermore, we provide a directional discussion on these

gaps.

Key Chapter Sections

About Frameworks (includes Five Forces

Analysis, Value Chain, Balanced

Scorecard, Strategic Themes,

TOGAF® and others)… 34

Common Ground and Gaps… 58

Business Transformation Value Chain

and Common Frameworks… 62

Gaps Addressed… 63

Exercises… 67

Chapter 2: Framework Confusion

34

Framework Confusion

Recently, a discussion was posted on a LinkedIn thread, its

sentiment can be expressed as: We as Enterprise Architects

spend way too much time discussing the ‘How to’ of

Enterprise Architecture and invest little time discussing

‘What to’ do and even less time on ‘Why’ we do it. The

question in the thread was “how can you communicate the

value of Enterprise Architecture to your CEO in less than 10

words.” Almost 100 responses were posted mostly by

practicing architects, making references to all kinds of

frameworks and thinking paradigms. If each individual

explained the value of Enterprise Architecture to the CEO in

this manner, he or she will face the same dilemma as

explained by Dr. Barry Schwartz in The Paradox of

Choice[18]. In a TED recording, Dr. Schwartz explains that

more choices lead to paralysis rather than liberation and

while some choices are better than none, that doesn’t

follow that more choices are better than some choices.

The same is true when it comes to frameworks for

managing Business Transformation. The purpose of this

chapter is to:

Briefly describe major frameworks relevant to the

Business Transformation Capability

Identify overlaps which cause nothing but frustration

among warring fiefdoms in most organizations

Identify and suggest a way to think about the gaps

that all of these frameworks have failed to rectify

Video 5: Developing a List of Enterprise

Frameworks

About Frameworks

In general, a framework is a real or conceptual structure

intended as a support or guide for the building of something

that expands the structure into something useful. A

framework is generally more comprehensive than a protocol

and more prescriptive than a structure.

Examples of frameworks that are currently used or offered

by standard bodies and organizations include:

• Resource Description Framework, a set of rules

from the World Wide Web Consortium for how to

describe any Internet resource such as a web

site and its content

• Internet Business Framework, a group of

programs that form the technological basis for a

business application. As an example, the mySAP

product from SAP, a German company that

markets an enterprise resource management line

of products

• Sender Policy Framework, a defined

programming approach for making e-mail more

secure

• Zachman framework, a logical structure intended

to provide a comprehensive representation of an

Chapter 2: Framework Confusion

35

information technology enterprise that is

independent of the tools and methods used in

any particular IT business

• The Open Group Architecture Framework

(TOGAF®), TOGAF® gives software architects a

structured approach for organizing and

governing their software technology design,

development and maintenance

• OSGi (Open Service Gateway Initiative), OSGi is

a Java framework for developing and deploying

modular software programs and libraries.

The focus of this section is to provide an overview of major

frameworks involved in the Business Transformation

Capability.[1]

Video 6: The Importance of Perspective

Five Forces Analysis

Porter's Five Forces Analysis is a framework[2] for industry analysis and business strategy development formed by Michael E.

Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that

determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the

overall industry profitability. An "unattractive" industry is one in which the combination of these five forces act to drive down

overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all

firms are driven to small if any profit.

Three of Porter's five forces refer to competition from external sources; the remainder are internal threats.

Chapter 2: Framework Confusion

36

Figure 2: Five Forces Analysis Model

Threat of New Competition

Profitable markets that yield high returns will attract new

firms. This results in many new entrants and thus

eventually will decrease profitability for all firms in the

industry. Unless the entry of new firms can be blocked by

incumbents, the abnormal profit rate will tend towards zero

(perfect competition).

There exist barriers to entry (such as patents, rights, and

so on). The most attractive segment is one in which entry

barriers are high and exit barriers are low. Few new firms

can enter and non-performing firms can exit easily.

Consider the following for evaluating the threat of new

competition:

• Economies of product differences

Chapter 2: Framework Confusion

37

• Brand equity

• Switching costs or sunk costs

• Capital requirements

• Access to distribution

• Customer loyalty to established brands

• Absolute cost

• Industry profitability; the more profitable the

industry the more attractive it will be to new

competitors

Threat of Substitute Products or Services

The existence of products outside of the realm of the

common product boundaries increases the propensity of

customers to switch to alternatives. Note that this should

not be confused with competitors' similar products but

entirely different ones. For example, Pepsi is not considered

a substitute for Coke but water, tea, coffee, and milk are.

Consider the following to evaluate this threat:

• Buyer propensity to substitute

• Relative price performance of substitute

• Buyer switching costs

• Perceived level of product differentiation

• Number of substitute products available in the

market

• Ease of substitution. Information-based products are

more prone to substitution, as online products can

easily replace material product.

• Substandard product

• Quality depreciation

Bargaining Power of Customers (buyers)

The bargaining power of customers is also described as the

market of outputs: the ability of customers to put the firm

under pressure, which also affects the customer's

sensitivity to price changes. Consider the following when

evaluating this threat:

• Buyer concentration to firm concentration ratio

• Degree of dependency upon existing channels of

distribution

• Bargaining leverage, particularly in industries with

high fixed costs

• Buyer volume

• Buyer switching costs relative to firm switching costs

• Buyer information availability

• Availability of existing substitute products

• Buyer price sensitivity

• Differential advantage (uniqueness) of industry

products

• RFM Analysis

Chapter 2: Framework Confusion

38

• RFM is a method used for analyzing customer

behavior and defining market segments. It is

commonly used in database marketing and direct

marketing and has received particular attention in

retail. RFM stands for:

• Recent activity - How recently did the customer

purchase?

• Frequency - How often do they purchase?

• Monetary Value - How much do they spend?

Bargaining Power of Suppliers

The bargaining power of suppliers is also described as the

market of inputs. Suppliers of raw materials, components,

labor, and services (such as expertise) to the firm can be a

source of power over the firm, when there are few

substitutes. Suppliers may refuse to work with the firm, or,

as an example, charge excessively high prices for unique

resources. Consider the following when evaluating this

threat:

• Supplier switching costs relative to firm switching

costs

• Degree of differentiation of inputs

• Impact of inputs on cost or differentiation

• Presence of substitute inputs

• Strength of distribution channel

• Supplier concentration to firm concentration ratio

• Employee solidarity (e.g. labor unions)

• Supplier competition: ability to forward vertical

integration and cut out the buyer

As an example, if you are making baked goods and there is

only one vendor that sells flour, you have no alternative but

to buy it from this sole vendor.

Intensity of Competitive Rivalry

For most industries, the intensity of competitive rivalry is

the major determinant of the competitiveness of the

industry. Consider the following when evaluating this

threat:

• Sustainable competitive advantage through

innovation

• Competition between online and offline companies

• Level of advertising expenses

• Powerful competitive strategy

Value Chain

A value chain[3] is a chain of activities for a firm operating in a specific industry. Products pass through all activities of the

chain in order, and at each activity the product gains incremental value. The chain of activities gives the product more added

value than the sum of the independent activities.

Chapter 2: Framework Confusion

39

Figure 3: Example of a Value Chain for Healthcare Insurance

About Value Chain

Michael Porter in 1985 introduced in his book ‘The

Competitive Advantage’ the concept of the Value Chain. He

suggested that activities within the organization add value

to the services and products that the organization produces

and all these activities should be run at an optimum level if

the organization is to gain real competitive advantage. If

they are run efficiently, the value obtained should exceed

the costs of running them, as an example, customers

Chapter 2: Framework Confusion

40

should return to the organization and transact freely and

willingly. Michael Porter suggested that the organization is

split into ‘primary activities’ and ‘support activities’.

Key Elements of a Value Chain

• Final Value Product is the output

• Determine the required Measurement (of

performance)

• Contribution of each Activity towards the

Measurement

• Capabilities needed to ensure optimum utilization of

resources

Example of Primary and Support Activities

Primary Activities

Inbound logistics refers to goods being obtained from the

organization’s suppliers ready for use in producing the end

product. Additional primary activities include:

• Operations: The raw materials and goods obtained

are manufactured into the final product. Value is

added to the product at this stage as it moves

through the production line.

• Outbound logistics: Once the products have been

manufactured, they are ready to be distributed to

distribution centres, wholesalers, retailers or

customers.

• Marketing and Sales: Marketing must make sure

that the product is targeted towards the appropriate

customer group. The marketing mix is used to

establish an effective strategy; any competitive

advantage is clearly communicated to the target

group by the use of the promotional mix.

• Post Sale Services: After the product/service have

been sold, what support services does the

organization have to offer? This may come in the

form of after sales training, guarantees and

warranties.

With the above activities, any or a combination of them,

may be essential for the firm to develop the competitive

advantage which Porter talks about in his book.

Application of Value Chain for the Wireless

Support Activities

Support activities assist the primary activities in helping the

organization achieve its competitive advantage; they

include:

• Procurement: This department must source raw

materials for the organization and obtain the best

price for doing so. For the price, they must obtain

the best possible quality.

• Technology development: The use of technology

to obtain a competitive advantage within the

organization is very important in today’s

technological driven environment. Technology can

Chapter 2: Framework Confusion

41

be used in production to reduce costs thus add

value, or in research and development to develop

new products, or via the use of the internet so

customers have access to online facilities.

• Human resource management: The organization

will have to recruit, train and develop the correct

people for the organization if they are to succeed in

their objectives. Staff will have to be motivated and

paid the ‘market rate’ if they are to stay with the

organization and add value to it over their duration

of employment. Within the service sector, as an

example, for airlines it is the ‘staff’ who may offer

the competitive advantage that is needed.

• Firm infrastructure: Every organization needs to

ensure that their finances, legal structure and

management structure works efficiently and helps

drive the organization forward.

Vision and Strategic Intent

• Enterprise Vision: Vision describes a goal with an

infinite horizon. For example, the vision of Mothers

Against Drunk Driving (MADD) is to eliminate deaths

caused by impaired drivers. This outcome where

there are no deaths due to impaired driving may not

be realized in our life time, but that does not make

the vision invalid.

• Strategic Intent: Whereas the Enterprise Vision

describes the goals of the organization outside a

specific time frame, Strategic Intent describes time-

bound specific goals of the organization. Strategic

intent would say eliminate deaths caused by alcohol

related accidents in 5 years on 400 series highways

during the May 24, Victoria Day long weekend.

Video 7: Understanding Primary and

Supporting Activities

Balanced Scorecard

The Balanced Scorecard[5] is a strategic planning and

management system that is used extensively in industry,

government, and non-profit organizations worldwide to

align business activities to the vision and strategy of the

organization, improve internal and external

communications, and monitor organization performance

against strategic goals. It was originated by Dr. Robert

Kaplan (Harvard Business School) and Dr. David Norton as

a performance measurement framework that added

strategic non-financial performance measures to traditional

financial metrics to give managers and executives a more

'balanced' view of organizational performance.

Perspectives

The balanced scorecard suggests that we view the

organization from four perspectives, and to develop

metrics, collect data and analyze it relative to each of these

perspectives:

• The Learning & Growth Perspective

Chapter 2: Framework Confusion

42

• The Business Process Perspective

• The Customer Perspective

• The Financial Perspective

Balanced Scorecard Software

The Balanced Scorecard is not a piece of software.

Unfortunately, many people believe that implementing

software amounts to implementing a Balanced Scorecard.

Once a scorecard has been developed and implemented,

performance management software can be used to get the

right performance information to the right people at the

right time. Automation adds structure and discipline to

implementing the Balanced Scorecard and helps transform

disparate corporate data into information and knowledge.

This additionally helps communicate performance

information.

Video 8: Expectations of a Balanced

Scorecard

Strategic Themes

As the concept of the Balanced Scorecard progressed, users

found that they needed to know the reason for the choice of

all Strategy Map[4] perspectives and objectives. To provide

improved motivation, management also needed to

demonstrate that these medium-level strategic goals are

permanent and defendable. Hence, each perspective and

objective should be backed up by statements that explain

and defend their existence. These are commonly called 3rd

Generation Balanced Scorecard Statements.

As mentioned below, many Strategy Maps have the

customer as the top perspective, however, this is ultimately

a decision that the author needs to make. This example

puts the finance perspective at the top and shows the

perspective purpose statements.

Perspective: Finance

Purpose: Our stakeholder wants and needs will be fully

satisfied through innovative initiatives which will maintain

and improve our financial performance

Perspective: Customer

Purpose: We will strive to always impress our customers

through innovative product provision, proactive industry

knowledge and productive relationships.

Perspective: Internal Business Process

Purpose: Our staff will constantly focus on Operational

Excellence issues including safety, efficiency and

proactivity.

Perspective: Learning and Growth

Purpose: To achieve our operational performance, our staff

will perform learning based initiatives that will enhance

organizational capability.

A typical Strategy Map is outlined in the following figure

and defines a Strategic Pillar, Supporting Strategies,

Chapter 2: Framework Confusion

43

affected capabilities and desired target state for each

Capability. As well as dependencies, investment

commitment, risk and commitment is required from the

pillar leader who is ACCOUNTABLE and RESPONSIBLE for

business outcomes.

Figure 4: Typical Strategy Themes and Capabilities Map

Chapter 2: Framework Confusion

44

Video 9: Creating Perspectives for Strategic

Themes

Enterprise Architecture and TOGAF®

TOGAF® is the most comprehensive framework for

Enterprise Architecture. It consists of seven major

modules[6]:

1. Context for TOGAF®: Its application as a Business

Transformation Framework

2. Architecture Development Methods:

Preliminary Phase, Architecture Requirements,

Opportunity Definition, Architecture and Roadmap,

Planning and Transition, Value Management

3. Guidelines and Techniques: Since TOGAF® is a

framework for Business Transformation, the scope

of transformation programs is often different and

this section provides guidelines on how to adapt

TOGAF® to your needs and secondly incorporates

techniques defined by many other management

disciplines. The techniques section is not meant to

be complete but it does provide a comprehensive

list and brief introduction to all necessary topics. In

addition, those studying Business Transformation

should review the Open CA certification

requirements to gain a deeper understanding of

required skills.

4. Architecture Content Framework (ACF): The

ACF provides a standard way to capture

architecture documents for maximum reuse and

ease of communication.

5. Enterprise Continuum (EC): Since architecture

of capabilities is reusable, the EC provides a

framework to define architecture for common

capabilities at a Foundation, Common Systems,

Industry and Organization Level. Architecture for

most capabilities should be and can be defined at

an industry level detail. In absence of these

architectures, we risk the value of learning from

other experiences and may not realize what is

possible.

6. Reference Models TRM and III-RM: These are

instances of Enterprise Continuum for an IT

Organization. They provide a framework on how to

define a Technology Simplification strategy.

7. Enterprise Architecture Skills Framework: This

section provides us insights of the skill sets needed

by those involved with business transformation.

Chapter 2: Framework Confusion

45

Figure 5: TOGAF® 9.1 Enterprise Architecture Framework

Key Highlights of TOGAF®

End conditions: Business Drivers and Enterprise Capabilities

• Business Drivers: Strategic Intent and Business

Outcomes

• Enterprise Capabilities: Helps define and refine

Enterprise Capabilities. Capabilities are optimized

using the following 4 contexts, not necessarily in

this order:

o Cost and Service Level

o Enterprise Risks

o Organic Growth

o Acquired Growth

Chapter 2: Framework Confusion

46

Integrative Thinking

Integrative Thinking is a field in Applied Mind Science which

was originated by Graham Douglas in 1986. He describes

Integrative Thinking as the process of integrating intuition,

reason and imagination in a human mind with a view to

developing a holistic continuum of strategy, tactics, action,

review and evaluation for addressing a problem in any field.

A problem may be defined as the difference between what

one has and what one wants.

Integrative Thinking theory was originated by Roger Martin,

former Dean of the Rotman School of Management, at The

University of Toronto and collaboratively developed with his

colleague Mihnea C. Moldoveanu, Director of the Desautels

Centre for Integrative Thinking. Integrative Thinking is a

discipline and methodology for solving complex or wicked

problems.

The Rotman School of Management defines integrative

thinking as:

"...the ability to constructively face the tensions of

opposing models, and instead of choosing one at the

expense of the other, generating a creative

resolution of the tension in the form of a new model

that contains elements of the individual models, but

is superior to each."[18]

The theory is made practical by thinking in four discreet but

inter-related steps: [7]

• Salience: what features do I see as important?

• Causality: how do I make sense of what I see?

• Architecture: what tasks will I do in what order?

• Resolution: how will I know when I am done?

Chapter 2: Framework Confusion

47

Figure 6: Integrative Thinking Model

Video 10: Trade-offs vs. Transcending Conflict

Salience

Causality

Architecture

Resolution

More Features of the Obstacles are considered Salient

Multi-directional and non- linear causality is considered

Whole visualized while working on individual parts

Integrated or System Thinking

Conventional Thinking Unattractive trade-offs

are accepted

Sequential/ Independent consideration of piece parts

Simplified consideration of Causality

Limited consideration of features

Chapter 2: Framework Confusion

48

Salience

The conventional approach is to discard as many

considerations as possible. To reduce our exposure to

complexity – most find complexity to be uncomforting – we

often filter out salient features when considering an issue to

guide a less than understood focus. We also do this

because of how most organizations are structured; each

functional specialty has its own narrow view of what merits

consideration and we do not cross boundaries.

Causality

In the second step of decision making, we analyze how the

numerous salient factors relate to one another.

Conventional thinkers tend to take the same narrow view of

causality that they do of salience; they only consider items

of relevant interest which is a straight-line causal

relationship. The integrative thinker isn’t afraid to question

the validity of apparently obvious links or to consider

multidirectional and nonlinear relationships.

Architecture

The order in which decisions are made will affect the

outcome. Integrative Thinkers don’t break down a problem

into independent pieces and work on them separately or in

a certain order. They see the entire architecture of the

problem of how the various parts of it fit together, how one

decision will affect another. Just as important, they hold all

of the pieces suspended in their minds concurrently.

Resolution

All of these stages – determining what are salient,

analyzing the causal relationships between the salient

factors, examining the architecture of the problem – lead to

an outcome. Too often, we accept an unpleasant trade-off

with relatively little uproar since it appears to be the best

alternative. When a satisfactory outcome does emerge, it is

inevitably due to the leader’s refusal to accept trade-offs

and conventional options. To achieve such outcomes, we

must transcend the conflicting requirements.

Portfolio of Investments

There is little consensus in the industry on exactly what is

the scope of Enterprise Portfolio Management. Many

frameworks, such as TOGAF®, make reference to this idea

but however, there is little actionable content in the most

popular frameworks. Most discussion on this subject rest on

the following notion:

"Pick the right projects and you’ll create competitive

advantage. Pick the wrong ones and you’re out of business.

This approach offers decades of practical and diverse PPM

experience - without having to suffer the failures.”[8]

Many software vendors have taken a more scientific

approach to project selection. These approaches support a

Balanced Scorecard and incorporate scientific management

methods such as ROI, risk and constraints. In all

frameworks, during the planning phase, there is an

estimate of cost and value. However, many of these

frameworks have no explicit method to measure actual

Chapter 2: Framework Confusion

49

value from the investment. Similarly, there is no

transparency, accountability and governance in terms of

exactly who is responsible and accountable for results.

Therefore, portfolio management still remains an academic

and theoretical exercise.

Project Management

Project management is the discipline of planning,

organizing, motivating and controlling resources to achieve

specific goals.[9] A project is a temporary endeavor with a

defined beginning and end. A project is also typically time-

constrained and constrained by funding and/or deliverables.

Approaches

There are a number of approaches to managing project

activities including lean, iterative, incremental, and phased.

Regardless of the methodology employed, careful

consideration must be given to the overall project

objectives, timeline, and cost, as well as the roles and

responsibilities of all participants and stakeholders.

A traditional phase approach identifies a sequence of steps

to be completed. In the "traditional approach", five

developmental components of a project can be

distinguished (four stages plus control):

Typical phases of an engineering project include:

• initiation

• planning and design

• execution and construction

• monitoring and controlling systems

• completion

Not all projects will have every stage as a sample of

projects can be terminated before they reach completion.

Some projects do not follow a structured planning and/or

monitoring process. In addition, some projects will go

through steps 2, 3 and 4 in multiple iterations.

System Development Life Cycle

Once upon a time, business software development

consisted of a programmer writing code to automate a

procedure or business process. Complex systems that

address engineering and/or scientific matters have always

been complex and often required teams of architects,

analysts, programmers, testers and users who must work

together to create the million plus lines of custom

programming code. Over the years, computing technology

has penetrated almost all aspects of our lives and today,

even simple systems must seamlessly interact with several

technologies and stakeholders. As a result, the complexity

of building, maintaining and exploiting these systems have

increased many folds over the years[10].

To manage this complexity, a number of system

development life cycle (SDLC) models have been created:

cascade, fountain, spiral, build and fix, rapid prototyping,

incremental, and synchronize and stabilize. All of these

models are variations of the oldest known method:

waterfall, which consists of the following phases:

Chapter 2: Framework Confusion

50

• Project planning, feasibility study: Establishes a

high-level view of the intended project and

determines its goals.

• Systems analysis, requirements definition:

Refines project goals into defined functions and

operation of the intended application. Analyzes end-

user information needs.

• Systems design: Describes desired features and

operations in detail, including screen layouts,

business rules, process diagrams, pseudo code and

other documentation.

• Implementation: Programming code and software

components are created.

• Integration and testing: Brings all the pieces

together into a special testing environment, then

checks for errors, bugs and interoperability.

• Acceptance, installation and deployment: The

final stage of initial development where the software

is put into production and is part of the business.

• Maintenance: During the life of the software in

production, the following maintenance activities are

accounted for: change, correction, additions, moves

to different computing platforms and more. These

activities, the least glamorous and perhaps most

important step of all, goes on seemingly forever.

Video 11: Agile vs. Waterfall

Organization Change Management

The ability to change is critical to industry leadership and

global business success. Yet change is the toughest

challenge that companies face, especially complex, high-

stakes and break-through change. Studies consistently

show that four out of five major change efforts fail [23].

What if you could minimize that risk of failure by

emphasizing both the "soft side" and the "hard side" of

change management? This was the driver behind the

Boston Consulting Group's [11] (BCG) approach to "The Hard

Side of Change Management". From studying hundreds of

major change programs at companies around the world, the

goal was to develop a more effective approach that would

reduce the risk and virtually assure a positive outcome.

Based on their findings, a systematic approach was created

that addresses:

• Operational and organizational changes

• Behaviours that affect program outcomes and are

critical to success

• Rigorous program development, tracking and

reporting to stay on schedule and on budget

BCG determined that the outcome of change initiatives is

driven by four elements:

• the Duration of the project

• the performance Integrity of the team

Chapter 2: Framework Confusion

51

• the organizational Commitment to change

• the additional Effort required of staff members

Assessing projects against these four elements, known as

DICE®, can help institutions achieve successful change. The

methodology created for scoring and statistical analysis of

the dynamics of DICE® allows an objective assessment of

the likely outcome of transformation.

Video 12: DICE Findings Create Common

Discussion Points

From collective experiences, DICE® has been a useful tool

to gage the success of a change initiative.

Leadership through People Skills

Communication skills are often under-rated and under-

valued but are also the biggest cause of ineffective plan and

execution. The reason for failure is not due to stakeholder

indifference about the issue, it is human nature that we

often lack the fundamental skills and process by which to

plan and execute communication. The Leadership through

People Skills framework provides a practical approach to

develop and continuously improve communication skills

regardless of the stakeholders involved.

The framework defines people skills as follows:

• Sizing up – observe what people do in work

situations and why

• Communication Skills – once you diagnose your

and other persons’ work and learning behaviour, you

then need a communication strategy

• Motivations Skills – create an environment for

people to do what they are capable of doing

• Adaptive Skills – vary the communication and

motivation technique that meets each individual’s

style of learning

This framework provides practical guidance on how to:

• Assess your and other people’s working and learning

behavior.

• Strategy of communication depending on the

personality type [Q1 to Q4] and apply different

communication techniques depending on the

relationship with the other stakeholder as a peer,

subordinate and superior

o Q1: Dominant & Unresponsive

Aggressive, Demanding, Close

minded, Seizes control, Forces ideas

o Q2: Submissive and Unresponsive

Aloof, Unresponsive, Cautious,

Neutral, Guarded

o Q3: Dominant and Responsive

Chapter 2: Framework Confusion

52

Over Agreeable, Meandering,

Appeasing, Compromises quickly,

Over friendly

o Q4: Submissive and Responsive

Forceful, Open, Enquiring, Task

Oriented, Responsive

• Create a five step process on how to execute the

meeting where a critical subject is being

communicated

o Social

o Objective and value for each agreement

o Other person’s opinion

o Restate common ground and identify the

disconnects

o Allow venting

o Develop go forward plan

The Leadership through People Skills text book is available

from McGraw Hill publication.[12]

IT Service Management

IT Service Management (ITSM)[13] is a process-based

practice intended to align the delivery of information

technology (IT) services with needs of the enterprise,

emphasizing benefits to customers. ITSM involves a shift

from managing IT as stacks of individual components to

focusing on the delivery of end-to-end services using best

practice process models. ITIL (Information Technology

Infrastructure Library) is a globally recognized collection of

best practices for information technology (IT) service

management.

Key ITIL Process:

Service Strategy

o Financial Management

o Demand Management

o Service Portfolio Management

Service Design

o Capacity Management

o Service Level Management

o Availability Management

o IT Service Continuity Management

o Service Catalogue Management

o Supplier Management

o Information Security Management

o Transition Planning & Support

Service Transition

o Change Management

o Configuration Management

o Release Management

o Service Validation and Testing

o Knowledge Management

Chapter 2: Framework Confusion

53

o Evaluation Management

Service Operation

o Incident Management

o Problem Management

o Request Fulfillment

o Access Management

o Event Management

o Service Desk Management

o Technical Management

o IT Operations Management

o Application Management

Continual Service Improvement

o A 7 Step Service Improvement (Identify

Strategic Direction, Define the areas that

you can measure, Collecting the data,

Processing the data, Analysing the data,

Making it usable and presenting the data,

Implementing change)

ITIL processes applied within the context of the ICT

Capability and incremental improvement that can be

realized goes a long way to define which service should be

implemented.

Video 13: ITIL: The industrialization of IT

Service Management

Lean Six Sigma

Lean Six Sigma[14, 20] is a managerial concept of Lean and

Six Sigma that results in the elimination of the seven kinds

of wastes/’muda’3 – classified as Transportation, Inventory,

Motion, Waiting, Overproduction, Over-Processing, and

Defects.

The Lean Six Sigma concepts were first published in the

book titled "Lean Six Sigma: Combining Six Sigma with

Lean Speed" authored by Michael George in 2002. Lean Six

Sigma utilises the DMAIC4 phases similar to that of Six

Sigma. The Lean Six Sigma projects comprise the Lean's

waste elimination projects and the Six Sigma projects

based on the critical to quality characteristics.

The DMAIC toolkit of Lean Six Sigma comprises of all the

Lean and Six Sigma tools. The training for Lean Six Sigma

is provided through the belt based training system:

White Belts – business value of lean six sigma

Yellow Belts – lean six sigma awareness

Green Belts – focus on tools usage and application of

lean principles through DMAIC

Black Belts – expert skills to lead complex

improvement projects

3 A Japanese word meaning "futility; uselessness; idleness; superfluity;

waste; wastage; wastefulness" according to Kenkyusha's New Japanese-English Dictionary, 5th edition, 2003, Tokyo: Kenkyusha, p. 2530 4 Define, Measure, Analyze, Improve and Control

Chapter 2: Framework Confusion

54

Master Black Belts – expert to lead and oversee

multiple projects

The DMAIC project methodology has five phases:

1. Define the problem, the voice of the customer, and

the project goals, specifically.

2. Measure key aspects of the current process and

collect relevant data.

3. Analyze the data to investigate and verify cause-

and-effect relationships. Determine what the

relationships are and attempt to ensure that all

factors have been considered. Seek out the root

cause of the defect under investigation.

4. Improve or optimize the current process based upon

data analysis using techniques such as design of

experiments, poka-yoke5 or mistake proofing, and

standard work to create a new, future state process.

Set up pilot runs to establish process capability.

5. Control the future state process to ensure that any

deviations from target are corrected before they

result in defects. Implement control systems such as

statistical process control, production boards, visual

workplaces, and continuously monitor the process.

Some organizations add a “Recognize” step at the

beginning, which is to recognize the right problem to work

on, thus yielding an RDMAIC methodology.

5 Any mechanism in a lean manufacturing process that helps an equipment

operator avoid mistakes

In recent years, Lean Six Sigma in healthcare [21] has

achieved significant prominence partially due to its focus on

error reduction, visual analysis and what matters to the

patient as a focal point of care quality.

Video 14: Lean and Six Sigma Thinking for

Process Optimization

Enterprise Governance

Enterprise governance includes Information Technology

governance [15] which is a subset discipline of corporate

governance focused on information technology (IT) systems

and their performance and risk management. The rising

interest in IT and also Enterprise governance is partly due

to compliance initiatives, for instance Sarbanes-Oxley in the

USA and Basel II in Europe. Additionally, IT governance is

also gaining prominence due to the need for greater

accountability for decision-making around the use of IT in

the best interest of all stakeholders.

There are many narrower and broader definitions of IT

governance. Weill and Ross focus on "Specifying the

decision rights and accountability framework to encourage

desirable behavior in the use of IT." In contrast, the IT

Governance Institute expands the definition to include

foundational mechanisms: "… the leadership and

organisational structures and processes that ensure that

the organisation’s IT sustains and extends the

organisation’s strategies and objectives."

Chapter 2: Framework Confusion

55

Furthermore, there are quite a few supporting frameworks

that enable this realization. Some of them are:

• AS8015-2005 Australian Standard for Corporate

Governance of Information and Communication

Technology. AS8015 was adopted as ISO/IEC 38500

in May 2008

• ISO/IEC 38500:2008 Corporate governance of

information technology, (very closely based on

AS8015-2005) provides a framework for effective

governance of IT to assist those at the highest level

of organizations to understand and fulfill their legal,

regulatory, and ethical obligations in respect of their

organizations’ use of IT. ISO/IEC 38500 is applicable

to organizations from all sizes, including public and

private companies, government entities, and not-

for-profit organizations. This standard provides

guiding principles for directors of organizations on

the effective, efficient, and acceptable use of

Information Technology (IT) within their

organizations.

• COBIT (Control Objectives for Information and

related Technology) is regarded as the world’s

leading IT and Enterprise governance and control

framework. COBIT provides a reference model of 34

IT processes typically found in an organization. Each

process is defined together with process inputs and

outputs, key process activities, process objectives,

performance measures and an elementary maturity

model. Originally created by ISACA, COBIT is now

the responsibility of the ITGI (IT Governance

Institute). ISACA is promoting Enterprise

governance of IT and not just for IT; this is evident

in version 5 of COBIT. This version embeds all

supporting frameworks such as Val IT and Risk IT

into a consistent view. There is also a distinction of

management and governance.

• ITIL (IT Infrastructure Library) is a high-level

framework with information on how to achieve a

successful operational Service management of IT,

developed and maintained by the United Kingdom's

Office of Government Commerce, in partnership with

the IT Service Management Forum. While not

specifically focused on IT governance, the process-

related information is a useful reference source for

tackling the improvement of the service

management function.

In this section, we will give particular due diligence to

COBIT and ValIT; these are often cited frameworks in the

Business Transformation Capability.

COBIT

Control Objectives for Information and related Technology

(COBIT®)[22] provides practices across a domain and

process framework and presents activities in a manageable

and logical structure. The business orientation of COBIT

consists of linking business goals to IT goals, providing

metrics and maturity models to measure their achievement

and identifying the associated responsibilities of business

and IT process owners.

Chapter 2: Framework Confusion

56

The process focus of COBIT is illustrated by a process

model that subdivides IT into four domains and 34

processes in line with the responsibility areas of plan, build,

run and monitor, providing an end-to-end view of IT.

Enterprise architecture concepts help identify the resources

essential for process success, such as applications,

information, infrastructure and people.

• Plan and Organize

o PO1 Define a strategic IT plan.

o PO2 Define the information architecture.

o PO3 Determine technological direction.

o PO4 Define the IT processes, organisation

and relationships.

o PO5 Manage the IT investment.

o PO6 Communicate management aims and

direction.

o PO7 Manage IT human resources.

o PO8 Manage quality.

o PO9 Assess and manage IT risks.

o PO10 Manage projects.

• Acquire and Implement

o AI1 Identify automated solutions.

o AI2 Acquire and maintain application

software.

o AI3 Acquire and maintain technology

infrastructure.

o AI4 Enable operation and use.

o AI5 Procure IT resources.

o AI6 Manage changes.

o AI7 Install and accredit solutions and

changes.

• Deliver and Support

o DS1 Define and manage service levels.

o DS2 Manage third-party services.

o DS3 Manage performance and capacity.

o DS4 Ensure continuous service.

o DS5 Ensure systems security.

o DS6 Identify and allocate costs.

o DS7 Educate and train users.

o DS8 Manage service desk and incidents.

o DS9 Manage the configuration.

o DS10 Manage problems.

o DS11 Manage data.

o DS12 Manage the physical environment.

o DS13 Manage operations.

• Monitor and Evaluation

o ME1 Monitor and evaluate IT performance.

Chapter 2: Framework Confusion

57

o ME2 Monitor and evaluate internal control.

o ME3 Ensure compliance with external

requirements.

o ME4 Provide IT governance

Although version 5 of COBIT combines Val IT and IT Risk

supporting frameworks, it is by intention that these

frameworks are discussed separately to illustrate how

multiple frameworks that complement each other have

caused confusion.

Val IT: Val IT[16] is a governance framework including

generally accepted guiding principles and supporting

processes related to the evaluation and selection of IT-

enabled business investments, and benefit realization and

delivery of value from those investments. ValIT does not

specify how these processes will be realized.

ValIT Principles

• IT-enabled investments will:

o Be managed as a portfolio of investments

o Include the full scope of activities required to

achieve business value

o Be managed through their full economic life

cycle

• Value delivery practices will:

o Recognise different categories of investments

to be evaluated and managed differently

o Define and monitor key metrics and respond

quickly to any changes or deviations

o Engage all stakeholders and assign

appropriate accountability for delivery of

capabilities and realisation of business

benefits

o Be continually monitored, evaluated and

improved

ValIT Processes

• Value Governance (VG)

o Establish informed and committed leadership

o Define and implement processes

o Define portfolio characteristics

o Align and integrate value management with

enterprise financial planning

o Establish effective governance monitoring

o Continuously improve value management

practices

• Portfolio Management (PM)

o Establish strategic direction and target

investment mix

o Determine the availability and sources of

funds

o Manage the availability of human resources

o Evaluate and select programmes to fund

o Monitor and report on investment portfolio

performance

o Optimise investment portfolio performance

• Investment Management (IM)

o Develop and evaluate the initial programme

concept business case

Chapter 2: Framework Confusion

58

o Understand the candidate programme and

implementation options

o Develop the programme plan

o Develop full life cycle costs and benefits

o Develop the detailed candidate programme

business case

o Launch and manage the programme

o Update operational IT portfolios

o Update the business case

o Monitor and report on the programme

o Retire the programme

Observations

In summary, all of the identified frameworks are valid and

accurate for an assigned purpose such as maturing the

delivery of the department or organizational group.

Collective understanding of the frameworks is needed to

help transform an enterprise within specific context as

organizations are complex structures designed to execute

routine tasks both effectively and efficiently. As such, the

transformation framework needs to adapt and integrate

with one another as well as with the operations of the

organization. Therefore, a structure that will enable

transformation with minimal disruption to all involved is

needed.

Common Ground and Gaps

Before the study of overlaps and common ground, let’s

quickly review the value chain of how ICT helps generate

enterprise value. In chapter 1, it was discussed how a

directed approach can:

• Optimize the Cost of ICT without increasing

technology risks and reducing business agility

• Ensure that ICT driven change actually produces the

expected returns and can also be done in a

transparent and accountable fashion

• Define and materialize new opportunities through

leveraging new ICT Capabilities

ICT Value Chain

The following figure shows how enterprise capabilities

interact in the enterprise to support the Enterprise Vision

and Strategic Intent. This value chain leverages previously

defined frameworks and is included here to ensure common

vocabulary and context. The example organization is

defined as follows:

• Vision: Eradicate cervical cancer [this goal has

an infinite timeline]

• Strategic Intent: By 2015, eradicate cervical

cancer in sub-Sahara countries [this goal is time

bound and SMART6 and it aligns with the

enterprise vision]

6 Acronym for Specific, Measurable, Achievable, Relevant and Time-bound

Chapter 2: Framework Confusion

59

Figure 7: Enterprise Capabilities that help Generate Value

1. Define Strategy

a. Assess market landscape

b. Assess enterprise capabilities

c. Plan – what to change, to what, value of

change, budget

2. Change Plan and Value Generation

a. Conceptual (what and why) Change Plan

b. Value Generation

c. Investment Plan

3. Change Execution

a. Oversee and execute change plan

b. SDLC – detail change plan

Chapter 2: Framework Confusion

60

c. Organization change management

4. Industrialize Change and Support

a. Stabilize technical change

b. Stabilize people change

c. Maintain systems and make incremental

changes

5. Enterprise Capabilities Repository

a. Manage repository and transition plan

b. Capability performance dashboard

6. Enterprise Performance Governance

a. Financial

b. Innovation

c. Culture

d. Social Responsibility

Overlap and Gaps

Assessment Criteria

Designed for: Green – this framework was designed for this

task. Resources with knowledge of this framework often

need to lead this task.

• Extendable: Yellow – this framework can be

extended if there is no other suitable

resource/framework. Resources within this

framework should participate in executing this

activity so they are better informed about

activities subsequently down the line.

• Force-Fitted: Red – if extended, this framework

will be force-fitted and will often lead to the

wrong conclusion. As an old saying goes, if you

are hammer, every problem is a nail.

The rationale of inclusion/exclusion is not to be ignored for

any framework; the objective is to become a lean team to

get things done effectively and efficiently.

Chapter 2: Framework Confusion

61

Table 3: Business Transformation Value Chain and Common

Frameworks highlights how each framework contributes to

a specific subset of business transformation. The purpose is

to:

• Highlight overlaps in frameworks – These

overlaps become major source of friction

between various teams within an organization.

• Highlight gaps that no framework addresses –

Since these activities are not within any domain,

failure to not effectively execute them often has

dire consequences downstream. Additionally,

without accountability the needed work does not

get done.

Assessment Criteria

• Designed for: Green – this framework was

designed for this task. Resources with knowledge

of this framework often need to lead this task.

• Extendable: Yellow – this framework can be

extended if there is no other suitable

resource/framework. Resources within this

framework should participate in executing this

activity so they are better informed about

activities subsequently down the line.

• Force-Fitted: Red – if extended, this framework

will be force-fitted and will often lead to the

wrong conclusion. As an old saying goes, if you

are hammer, every problem is a nail.

The rationale of inclusion/exclusion is not to be ignored for

any framework; the objective is to become a lean team to

get things done effectively and efficiently.

Chapter 2: Framework Confusion

62

Table 3: Business Transformation Value Chain and Common Frameworks

Value

Chain

Phase

Framework / Value Chain Step

Fiv

e F

orces A

naly

sis

Valu

e C

hain

Str

ate

gic

Th

em

es

Map

pin

g

Bala

nced

Sco

recard

En

terp

ris

e

Arch

itectu

re

Syste

m T

hin

kin

g

Po

rtf

olio

Man

ag

em

en

t

Pro

ject

Man

ag

em

en

t

Syste

m D

evelo

pm

en

t

Lif

e C

ycle

Org

an

izati

on

Ch

an

ge

Man

ag

em

en

t

Lead

ersh

ip th

ro

ug

h

Peo

ple

Skil

ls

IT

Servic

e

Man

ag

em

en

t

Op

era

tio

ns

Man

ag

em

en

t

Lean

Sig

ma

IT

Go

vern

an

ce,

Au

dit

,

Fin

an

ce

Val IT

Strategy

Assess market landscape g y y r r y r r r r y r y r y y

Assess enterprise capabilities - define

and assess current and required

state of each Capability

g r r g g r r r r y r y r y y

Plan – what to change, to what,

value of change, budget to change g g Y y r r r y y r y r y y

Change Plan

and Value

Generation

Conceptual (what and why) Change

Plan y y y g

Value Generation - leverage current

capabilities y y y g g g

Investment Plan y y g g g

Change

Execution

Oversee and execute change plan g

SDLC – detail change plan g

Organization change management g y y y

Industrialize

Change and

Support

Stabilize technical change g g

Stabilize people change g

Maintain systems and make

incremental changes y y g g

Chapter 2: Framework Confusion

63

Value

Chain

Phase

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Capabilities

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plan y g g g g

Capability performance dashboard g g g

Enterprise

Performance

Governance

Financial g

Innovation g

Culture g

Social Responsibility g g

Gaps Addressed

Among all the frameworks discussed above, none have the

needed prescription to be implemented consistently. There

are three subtasks that are essential for ICT to deliver

quantifiable and measurable value that are not covered by

the above:

• How to define Enterprise and Supporting

Capability

• How to define Enterprise Architecture

Requirements

• Harmonize the instinctual architecture defined by

senior management against the one defined

using formal scientific methods

• Lack of value generation as well as transparency

and accountability

Enterprise Capability

Simply, a capability can be defined as an ability to do

something useful. A capability has performance measures

and three components: Current and target performance

metrics and a described business value (outcome) of having

a capability perform at the current and target. The delta

Chapter 2: Framework Confusion

64

between the target and current outcomes is the net value

of changing the capability’s performance.

Elements of a capability include:

• Process: workflow

• People: people who execute the process

• Technology: automation of the process

Capability Performance includes:

• Measures of Capability Performance: As an

example, a Customer Relations Management

(CRM) Capability – answers a customer call

within 10 seconds, a customer’s questions are

addressed 80% of the time on the first call.

Current metric: 10 seconds, 80%; Target metric:

3 seconds, 99%

Business Value (Outcome)

• Measure of the Business Outcome: As an

example, an improvement in the CRM capability

implies a customer satisfaction improvement

from 66% to 95%, customer retention increase

from 30% to 80%, customer referrals improve

from 10% to 80%. The business outcome that

matters: the total cost of getting and keeping a

customer is reduced; this may prove to be a

strategic advantage in the industry.

Video 15: The Capability Concept

Enterprise Architecture Requirements

Enterprise Architecture Requirements [19] are defined as

obstacles that prevent a capability from performing at the

required target state. These are explicitly defined by key

stakeholders who are accountable for Capability

Performance and resulting business outcomes.

• The requirements are defined iteratively at:

(instinctual) contextual, conceptual, logical and

physical levels of detail.

• Architecture Requirements at each iteration trigger

the TOGAF® Architecture Development Methodology

(ADM) phases from Phase A to Phase H. TOGAF®

ADM Phases help define and refine architecture,

develop a transition plan, guide the execution of the

transition plan and manage the capability over its

life time.

• As an example, The CIO’s organization needs to

become an Accountable and Transparent

organization to the rest of the Enterprise

o Need the ability to explicitly measure the

impact of each investment dollar

o Time, cost and risk to react to the changing

business climate

o + more requirements from other stakeholder

points of view

Other requirements that are outputs of the TOGAF® ADM

phases describe the characteristics of the solution. This

Chapter 2: Framework Confusion

65

includes Business Requirements, Functional Specification,

Technical Specification, Organization Change Management,

deployment and so on.

• Business Requirements – describes the improved

business process the organization is prepared to

implement. Processes that are sufficiently improved

enable the capability to performance at the target

state. Typically, these are described in the form of a

Process Model with target improvements. For

example, if the elapsed time is the measure of

improvement then each process must have a current

measure, improved measure, and typical areas to

focus on to improve the process. Remember,

business analysts are the recipients of this document

and they need sufficient guidance to document the

improved process in the Business Requirement

Document (BRD), the document that defines

Business Requirements at a logical level of detail.

• Functional and Technical Specification – Are, in

part, outputs of Systems Architecture, Phase C,

whereas they take input from Business Architecture

and Architecture Requirements.

• OCM Requirements – Are outputs of the Business

Architecture process which describes who are all the

stakeholders impacted and the magnitude of change.

These OCM requirements are sufficient to help draft

the scope of the OCM Strategy and execution plan.

Video 16: Enterprise Architecture

Requirements Position Paper

Iterative Architecture Development

An ideal architecture adapts to conform to Enterprise

constraints and then defines the Transition Plan and

Business Case. We can iterate in each level of abstraction

which includes instinctual, contextual, conceptual, logical

and physical.

• Instinctual – Senior Management’s gut-feel of what

needs to be done.

• Contextual – Answers the “why” questions. The key

stakeholder is the person responsible for business

outcomes.

• Conceptual – Answers the “what” questions. Key

stakeholders are people responsible for a capability’s

performance.

• Logical – Answers the “how” questions. It describes

the details of a process, skills required and

automation needs in order to get the capability to

perform at the desired level.

• Physical – Answers the “with what” questions. Key

stakeholders are those who support the people doing

the logical level work.

Value Realization and Value

Management

Value realization and value management deals with how to

express the net enterprise value from investments in ICT

capabilities. The value generated by a capability needs to

Chapter 2: Framework Confusion

66

be monitored so when expectations come up short, changes

can be made when required. Value must also be realized so

that it can enable the organization to thrive in their

environment.

Video 17: Value Realization is Often Neglected

Summary

This chapter highlighted how a multitude of frameworks

make business transformation difficult. As Dr. Barry

Schwartz pointed out, more choices don’t necessarily lead

to freedom. It is the responsibility of the enterprise’s senior

management to define the business transformation process

and not leave individual framework fiefdom owners to

create one that is based on political compromises.

Chapter 2: Framework Confusion

67

Exercises

1. ICT Value Chain Assessment

Consider the ICT value chain in Figure 7: Enterprise Capabilities that help Generate Value

Define a number of different departments involved in the execution of each task.

Define their immediate manager and communication style based on Q1, Q2, Q3, Q4 management style as defined in

Leadership through People Skills.

Given their leadership style, define your communication strategy to reach a consensus by: what framework should be used to

execute each task and how to proceed with a common vocabulary.

2. Enterprise Value Assessment through ICT projects

Consider recently completed IT projects that you have been involved with and define the following for each project:

What enterprise capabilities were affected?

What supporting capabilities affected?

Define performance measures, current and target for each capability

What was the potential for Enterprise Value from the changed capability performance?

The total cost of the project

The total value that enhanced capabilities helped realize

Who is accountable for leveraging the enhanced capability?

Chapter 2: Framework Confusion

68

Chapter 2 References

1. What is a Framework? http://whatis.techtarget.com/definition/framework

2. Five Forces Analysis http://www.strategy4u.com/assessment_tools/info.php?s=2

3. Value Chain - http://www.globalvaluechains.org/concepts.html

4. Strategic Themes - http://www.ifac.org/sites/default/files/downloads/Proposed_Strategic_Plan_2009-2012_Section_7_-

_Strategic_Themes_and_Strategic_Objectives.pdf

5. Balanced Scorecard

http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

6. Enterprise Architecture and TOGAF, http://www.opengroup.org/togaf/

7. System Thinking, http://www.slideshare.net/N_Albro/roger-martin-and-integrative-thinking

8. Portfolio of Investments, Enterprise Portfolio Management Council http://www.theepmc.org/Publications.html

9. Project Management http://en.wikipedia.org/wiki/Project_management

10. System Development Life Cycle, http://www.computerworld.com/s/article/71151/System_Development_Life_Cycle

11. Organization Change Management, http://dice.bcg.com/index.html

12. Leadership through People Skills.R. Lefton , Victor Buzzotta, McGraw-Hill; 1 edition (Aug 18 2003)

13. IT Service Management - http://en.wikipedia.org/wiki/IT_service_management

14. Lean Sigma Lean Six Sigma, Chapter 14: Lean Six Sigma Logistics, Michael George

15. IT Governance http://www.isaca.org/Groups/Professional-English/governance-of-enterprise-

it/GroupDocuments/ITPI_IT_Governance_summary_paper.pdf

16. ValIT – Value IT http://www.isaca.org/Knowledge-Center/Val-IT-IT-Value-Delivery-/Documents/Val-IT-Framework-2.0-

Extract-Jul-2008.pdf

17. Roger Martin http://rogerlmartin.com/library/books/the-opposable-mind /

18. Barry Schwartz: The paradox of choice http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html

Chapter 2: Framework Confusion

69

19. Enterprise Architecture Requirements – qrs3E position paper http://ebook.qrs3E.com

20. Six Sigma http://www.best-management-practice.com/gempdf/sixsigma_itil_csi_wp_july09.pdf

21. Lean Six Sigma in Healthcare http://dare.uva.nl/document/44174

22. COBIT http://www.isaca.org/Knowledge-Center/cobit/Documents/COBIT4.pdf

23. Oxford Study: OVER BUDGET, OVER TIME, OVER AND OVER AGAIN MANAGING MAJOR PROJECTS; Bent Flyvbjerg,

http://www.academia.edu/2402077/Over_Budget_Over_Time_Over_and_Over_Again_Managing_Major_Projects

Chapter 3: The Business Transformation Capability

70

Chapter 3: The Business Transformation Capability

“Everyone should be respected as an individual, but no one idolized.”

Albert Einstein

Abstract

The confusion created by a multitude of frameworks augmented by the

organization structure – that is also aligned to these frameworks – paralyzes

the organization. The debate among framework supported fiefdoms becomes

louder than the need for results. Instead of focusing on activities that

matter, senior management often gets entrenched with the debate of who

should do what, how it needs to be done and most importantly, how to hold

these disciplines accountable.

The focus of this chapter is to advocate a way of thinking that is consistent

with all business transformation frameworks. The key questions this chapter

covers include:

Why does Business Transformation as an Enterprise Capability

matter?

What is the business value of Capability Based Value Thinking?

What is the Business Transformation Value Chain?

What is the relationship between capability-based thinking and all

Business Transformation Frameworks?

What are the roles and responsibilities of various professionals?

What is the Business Transformation Capability Performance

Scorecard?

Key Chapter Sections

Performance Measures for the CEO and

Board of Directors)… 71

Common Ground and Gaps… 74

The Current State of the Business

Transformation Capability… 75

Improvement through Capability Based

Value Delivery (Business

Transformation Phases, Solution

Approach, Disciplines Required)… 77

Framework – Capability Based Value

Delivery and the Business Transformation

Services Model… 81

Services, Deliverables and Quality

Checkpoints… 82

Functions Provided by Roles and

Disciplines… 84

Chapter 3: The Business Transformation Capability

71

The Business Transformation

Capability

Regardless of the organization’s business, its performance

is measured through the same three variables: market

share, profit margin and value in the pipeline. The

difference is that different business models such as private,

public, non-profit, big, small and so on have a focus on

different variables but inevitably; their focus falls on these

three measures as will be explained in the subsequent

section.

Performance Measures for the CEO

and Board of Directors

The Board of Directors, CEO and the senior management

team are focused on the positioning and performance of the

greater organization and their focus can be summarized on

three indicators:

• Market Share: A reflection of how much of the

potential market for the organization’s

product/service is consumed. Factors include the

current market share, trend, share of existing and

new entrants. Insight into the markets size of cross-

over markets is also beneficial.

• Profit Margin: What is our pre-tax profit margin

and how does it rank against current markets

leaders and challengers? For a public sector

organization, this is a measure of how efficiently the

service is delivered.

• Learning Organization: Through harnessing the

power of social media internal to the organization,

this measure recognizes that people thrive in an

innovative environment and is assessed through the

following:

• Organization Chatter Index: The number of

ideas being generated, number of comments

and feedback from others in the organization

and their value. Forms taken can include that

of a new attribute of an existing product, new

product, opportunity to reduce cost, improve

staff satisfaction, improving public perception

of a well-run organization. Remember, public

perception has a market capitalization

premium.

• Leading Indicators: Creativity is not just the

responsibility or the province of a few in the

organization and this indicator’s scope is

holistic.

• Lagging Indicators: A measure of the

business value of enterprise chatter.

• Value in the Pipeline: A measure of ideas

and opportunities that are linked to Enterprise

Capabilities. Classify the opportunities in terms

of Cost Reduction, Revenue increase, Customer

Service, Staff Morale or Corporate Citizenship.

Value in pipeline needs to be monitored in real-

time.

Whereas market share and profit margins are lagging

indicators, a learning organization is a leading indicator and

Chapter 3: The Business Transformation Capability

72

also factors in Customer Perception: When customers

believe your organization has the capability to engage your

entire work force and partners in creating innovative

products, they are willing to pay more for your products.

Consider the following:

Apple Inc. Despite fierce competition, Apple products

still command a premium price over rivals.

• Another example includes a steel company in

Canada that had a marketing tagline of: “Our

product is steel and our strength is our people”

during a bitter and endless strike.

• Consider RIM, Samsung and Nokia. Long before

management acted on challenges in the industry,

customers already started to abandon them despite

technical superiority and personal attachment.

For public sector organizations where profit is not a

consideration, the first two indicators would translate into

the value of the service and the cost of service delivery

respectively. The greater the value of the service, more

consumers will benefit from it. As the cost of the service

delivery falls, more services can be delivered with the

available resources. Consider these two measures as

analogous to respectively being effective and efficient.

Are you aware of the following measures for your

organization?

• Market Share

• Profit Margin

• Learning organization measures

• The most profitable product line

• Opportunities for Improvement

Chapter 3: The Business Transformation Capability

73

Figure 8: Summary of Organization Performance Measures

The Business Transformation Capability helps you

continuously realign your Enterprise capabilities; that

includes the resources to realize your enterprise strategic

intent and vision. This is not a new concept, the difference

is in its application, given today’s hyper competitive world,

the organization’s operating models need to adjust daily

and not just once per economic cycle.

For Profit CEO • Market Share • Profit Margins • Organization Learning

For non-Profit CEO

• Service and Cost • Value of Service • Organization Learning

Chapter 3: The Business Transformation Capability

74

Video 18: The Business Transformation

Capability

Pressure to Review Enterprise

Capabilities Continuously

The days when capabilities can be reviewed once an

economic cycle are now obsolete; organizations need to

transform and change continuously. Consider Financial

Markets and their composition; there have been many

companies that changed fortunes in the top 100 index.

The Capability Premium

Customer expectations and changing trends can also be

seen in the following:

• A government’s ability to spend their way out of

difficulty has been impacted and is less of a viable

option.

• Social media has made great strides as a conduit for

customer expectations.

• Trends in Health Care funding concerns and cost of

healthcare continue increase. Public perception that

increased government spend will not address the ills

of healthcare costs.

• The growing size of the middle class in Asia

appreciates value; it is not only price sensitive. New

markets that deal with safety, water treatment and

so on will be demanded.

• New market opportunities are constantly emerging,

instead of servicing existing markets; creative

products are creating new markets.

Staff Expectations

Creativity is not limited to a selected few in the

organization, people want to work for companies that their

friends and influencers consider top notch. Consider RIM, it

was prestigious for people to work for RIM as well as for

Apple and Google. To satisfy this demand, we need to

define:

A Learning Organization – We need to have a

real-time gauge to measure staff satisfaction as

oppose to old, tired, once a year staff surveys that

offer little value.

The role of ICT – How ICT helps generate

enterprise value

Your Response and Assessment

Regardless of your role, there are two concerns that need

to be addressed: 1) why should you care and 2) what is at

risk? Consider the following areas of impact:

New Investments

• Planned new Investments in Business

Transformation and IT programs over a period of

time

Chapter 3: The Business Transformation Capability

75

• Expected return from these investments over a

period of time

• Based on the current capabilities, what is the

probability that the investment will deliver expected

outcomes as required?

• For the IT operating budget, what is the

effectiveness of the current investment in IT?

Fixed and Variable Spending

• Hardware and software license and contracts; what

will be their impact given current trends of shared

services and Cloud delivery?

• The cost of Data Centre operations that include:

heat, hydro, cooling, facilities charges; how will this

impact our ability to change and transform our

capabilities?

• Sections of the IT budget concerning human

resources, investment allocated to procure new

hardware and software that is available to make

improvements to the current IT Landscape; how will

this be managed?

Why change? Perform a Self-

Assessment

Ask yourself the following about your organization:

• How to do you know if the current enterprise

capabilities are being leveraged to the same level as

your competition?

• Are you better or worse off than your competition?

• What is the impact on your organization if you fail to

deliver the transformation programs and/or fail to

exploit the current capabilities to the same level as

your competition?

Video 19: The Capability Concept improves

Strategy and Expectations for Execution

The Current State of the Business

Transformation Capability

The story outlined as follows is not unusual of any Business

Transformation Program; in fact it is typical. The humor is

intended to highlight the comedy of errors a project

becomes in many organizations.

Business Transformation: What

Happens Now?

This story starts with senior management who through

serious brainstorming comes up with a brilliant Business

Strategy as outlined in the following figure.

Chapter 3: The Business Transformation Capability

76

Figure 9: An Example of a Typical Business Transformation Implementation

Projects, related to each strategy, get defined in isolation,

project managers are assigned to projects and we are

ready to roll! Project managers, as required by their

discipline, attempt to define a Project Charter.

Chapter 3: The Business Transformation Capability

77

The fundamental issue with this approach is that Business

Transformation in this context becomes a wicked problem.

It has inherent complexity which is defined as:

Technology Complexity

People Complexity

Problem Wickedness

Figure 10: Business Transformation as a Wicked Problem

This complexity needs to be resolved before any project can

enter the execution phase and it is not a project manager’s

job to do. Project manager can manage the process if

required, but dumping this complexity on a project

manager is simply not the right response.

Video 20: Characteristics of a Wicked

Problem

Improvement through Capability

Based Value Delivery

To tackle this kind of complexity, we need an iterative and

a phase-gate based approach that forces the right roles to

make informed choices along the Business Transformation

value chain; this creates the necessary transparency and

accountability.

Chapter 3: The Business Transformation Capability

78

The following figure is shows the Capability Based Value

Delivery (CBvd™) life cycle. This view has been put

together to demonstrate the phases of work that needs to

be completed to mature an organization’s capabilities.

Figure 11: A view of Capability Based Value Delivery

Business Transformation Phases

The phase gates of the Business Transformation Capability

are:

G0: Strategic Intent,

G1: Enterprise Strategy and Capabilities

G2: Portfolio of Projects

G3: Portfolio of Capabilities

G4: Continuous Maintenance and Value Generation

Chapter 3: The Business Transformation Capability

79

Ask yourself the following six questions to assess your

organization’s Business Transformation maturity:

1. Strategic Intent: Are enterprise goals well defined

and communicated to all employees and does each

employee understands how their daily activities

impact these goals? [Yes, No]

2. Business Strategies: Is each business strategy for

change defined in terms of current and target

performance of enabling capabilities and is the

resulting business value from the improved

capability performance explicitly defined? [Yes, No]

3. Roadmap and Business Case: Does each business

strategy for change that is applied to a capability

have a well-defined Transition Plan and Business

Case? Is the resulting portfolio of

projects/investment approved by senior

management and is the capability sponsor held to

expected business outcomes? [Yes, No]

4. Transitioned Capability: Is the Program

Management office held to cost, timeline and scope

of the capability initiatives as defined in the

Transition Plan and Business Case? [Yes, No]

5. Capability Performance and Business Outcome:

Are Capability owners held to utilize their current

capability to the target performance and do

exploited capabilities enable the expected business

outcomes? [Yes, No]

6. Organization Reality: Do we actively track the

total cost of running IT and the net new investment

planned? [Yes, No]

If any of your answers are “No”, “not sure” or any similar

variant, why is this information not available?

Solution Approach – Iterative

A possible solution approach to tackling the woes of

transformation are as follows:

Engage the right people, understand the problem in

the right context and ensure the appropriate

stakeholders make the right decisions on not only

how to solve the problem, but also, more

importantly, how to define the problem

Understand the whole problem in terms of change to

process, impact of change on people and changes to

technology. Anybody who can help you and/or get

in your way is your stakeholder

The above can be done iteratively until we are comfortable

with the quality of information that we have. When we

move towards defining a business strategy, we should

consider the following:

Direction: Does the strategy communicate a clear

direction to reach the objective? As an example, an

organization that wishes to achieve efficiency has

many options to pursue but a good strategy would

give direction such as ‘improve efficiency through

higher utilization of …’

Chapter 3: The Business Transformation Capability

80

Objectives: Do we have SMART (Specific,

Measurable, Achievable, Relevant, Time-bound)

objectives that are clearly understood?

Guidelines: Does the strategy provide a guideline

to realize the objective? See the example given for

direction.

Constraints: Does the strategy lend insight into

overcoming the constraints we may face? (i.e.

maintain strong controls to safeguard customer

information)

Affected Capabilities: Are the impacted

capabilities stated in the strategy and are these

impacts understood?

Performance Measurements: Does the strategy

convey the improved performance that needs to be

achieved?

Targets: Does the strategy specify clear targets that

need to be met and can we measure this success?

A typical business strategy can be expressed as:

Bend the Health Care Cost Curve

Data as a Decision Enabler at the point of Care

Learning Organization

The details of the strategy should be known by the strategy

owner.

Disciplines Required for the Job

A complicating factor that needs to be overcome is that the

mandates of a discipline, what is required by the Business

Transformation Value Chain and within the organization

structure. In almost every case, these mandates conflict

with one another.

When defining a Value Chain, we need to balance all three

forces: 1) industry defined mandate, 2) requirements of the

Value Chain and 3) Organization Structure; that is the

organization politics and culture.

Touch points between common frameworks such as

TOGAF®, ITIL, PMI, COBIT, BSC and others include:

• Strategic Planning and Portfolio Management:

Return on Enterprise Assets

• TOGAF®: Framework to develop the right

information to enable investment choices. Measures

the program effectiveness by the quality of decisions

• Program and Project Management: Execute

programs and projects and measure the practice’s

effectiveness through: on-time, on-budget and

ability of transitioned capability to perform at the

target level

• SDLC: ability to manage current capabilities and

transition from current to target at the expected cost

and timeline

• Governance and Audit: Assess decision rights and

enterprise risk

Chapter 3: The Business Transformation Capability

81

Video 21: Capabilities Have a Life Cycle

Framework – Capability Based

Value Delivery and the Business

Transformation Services Model

Within the Business Transformation Capability, TOGAF®

plays a critical role towards its standardized use and

maturity.

Capability Based Value Delivery (CBvd™)

Strategic Intent – G0: Strategic Intent defines –

given current capabilities and capabilities that can be

developed – what would the organization like to

achieve in 5 to 25 years and explicitly link how this

intent maps to the Enterprise vision

Enterprise Strategy – G1: Enterprise Strategy

explicitly defines the Direction, Objectives,

Constraints and Guidelines. As well as what will be

the affected capabilities and what will be the

improved target performance level for each

capability. Most importantly, the strategy explicitly

defines what will be the Business Value of each

capability being at the target state.

Transition Plan and Business Case – G2: Defines

the Business case to transition each capability from

the current to target with a selected solution

approach. Communicate the roadmap and business

case to not only the capability sponsors but also to

those who will be working to realize the roadmap.

Validate Transitioned Capabilities – G3: Before a

program and project can be considered complete: 1)

has the capability been transitioned to the target

state and 2) have capability owners accepted the

new capability into their routine work.

Nurture Enterprise Capabilities – G4: Business

value is generated only if the skilled and motivated

workforce is able to exploit the capability as

intended.

Continuous Enterprise Planning : Exploit CBvd™

Process to Continuously Plan your Portfolio of

Investments on IT

The following figure shows how the Business

Transformation Capability is exploited to bring initiatives to

market.

Chapter 3: The Business Transformation Capability

82

Strategic Programs, Capability

Performance

G0

G1

G2

G3

G4

Obstacles preventing to Migrate to Target Level (Architecture Requirements)

TR1

ITSM Service Ticket

Manage as a Sev 1

Sev 1 Q

D1Define Value

Statement

G0, G1,G2,G3 – WorkPackage

Enterprise Capabilities Investment DashboardWork products at each Gate, Required Resources (competencies to

next level, current allocation, slack )

Define Value Statement

G0, G1 WorkPackage

Change Requires CxO Input

Change Requires VP Input

Change Requires Design Change Change can be handled

with Config Changes

Grassroots – Innovation

Thread

Plan able work

Investment in Capabilities - Plan and Governance

Enterprise Continuum- Repository

Technology Roadmaps (IT Capabilities)

IT Competencies Roadmap

Work plan for each Gate

Enterprise Process Roadmaps (Business

Capabilities)

Arch ReqLearning Org

Skills Dev

CBvd Performance Measures

CBvd Governance

D2

Figure 12: Bringing Transformation to Market

Services, Deliverables and Quality Checkpoints

Let’s take a moment to consider some of the services and deliverables that are produced throughout the capability life cycle;

this is shown in the following figure.

Note: The activities performed throughout the Capability life cycle is further explained in Chapter 4 as the services

performed for business transformation.

Chapter 3: The Business Transformation Capability

83

G0

G1 G2

G3

G4

Identify Obstacles at each Phase that Prevent Capability from Performing at Target Level

IT Service Mgt [R]Strategic Planning [A]

Project Management [A] and Enterprise Architect [R]

Enterprise Architecture [R,A]

Strategic Planning [A], Business and IT Arch [R]

Financial ImpactEnterprise Executive

Capability Map

Architecture Vision for each Executive Capability

Business Strategy

Customer Impact

Supplier Impact

Organization Impact Balanced Scorecard

Horizontal and Vertical Roadmaps – Industry,

Organization

For a Strategy or Capabilities

Transition Plan and Business Case

Transition Each Capability to

Target state on on-time, on

budget within prescribed enterprise

principles and standards

Capability Performance at

Target

Improvements identified as Architecture

Requirements

Inputs/Outputs

BT Services Catalogue

S1.1: Enterprise Value Chain S1.2: Operating Model S1.3: Enterprise CapabilitiesS1.4: Enterprise Business Strategy

S2.1: Reference Architecture S2.2: Adapt Reference Architecture S2.3: Transition Plan and Business CaseS2.4: Transformation Execution Strategies

S2 Services

S1 Services

S3.1: Detailed Business RequirementsS3.2: Functional SpecificationsS3.3: Technical SpecificationsS3.4: Develop/Configure/ExtendS3.5: Define Test Cases S3.6: TestS3.7: Prepare for Launch

S3 Services

S4.1: Monitor Capability Performance S4.2: Monitor Business Performance enabled by the Capability PerformanceS4.3: Continuous Improvement MgtS4.3: Continuous Plan

S4 Services

Competency and Skills

Ability to facilitate, communicate refine strategic analysis into Executive Capabilities. Experience in multiple Industries

Open CA L3 – Chief Architect Stream

Capability Domain and Org Knowledge

Open CA L2 or L1 –

Multiple Skills and Roles

Multiple Skills and Roles ITSM

Figure 13: Business Transformation Services, Deliverables and Quality Checkpoints

These services are and deliverables are summarized for

each phase as follows:

G0 -G1: Model Enterprise Strategy

Service G0.1: Define Business Strategy

Deliverables: Business Strategy and Quality

Checklist

G1 to G2: Define Roadmap

Service G1.0: Define/Adapt Architecture Roadmap

Deliverables: Reference Architecture Roadmap,

Adapted Roadmap that conform to Enterprise

Constraints

G1 to G2: Define Transition Plan and Business Case

Service G1.1: Define Transition Plan and Business

Case

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Deliverables: Transition Plan and Business Case

G2 to G3: Transition the Planned Capabilities

Service G2 Solution Development Life Cycle

Information Deliverables: Logical Business

Requirements, Functional Specification, improved

automation that meets the enterprise standards,

Organization Change Management Strategy and

Organization Readiness

Capability Deliverables: Deploy the transitioned

capability into production

G3 to G4: Exploit, Nurture and Retire the Obsolete

Capabilities

Service G3: Exploitation and CI Work plan

Information Deliverables: Continuous Improvement

Plan, Capability Performance Scorecard and Business

Outcome Scorecard as well as pipeline of capability

improvement opportunities

Capability Deliverables: Capability being exploited to

its max and business outcomes are achieved

Functions Provided by Roles and

Disciplines

In the following section, attributes for each function are

described using a RACI matrix defined as: [R] Responsible,

[A] Accountable, [C] Consult, [I] Inform.

Strategic Planning and Portfolio Governance

G0 to G1: Review all capabilities heat maps,

business climate changes and assess scope of

changes to target capabilities [A]

G1 to G3: Oversee the development of business

case and transition plan executions [I, C]

G3 to G4: oversee the value management from

enterprise capabilities [A], Responsibility for

exploiting capabilities remains with Enterprise Senior

Management

Enterprise Architect

G0 to G1: Refine Value Chain and Enterprise

Capabilities [R]

G1 to G2: Define Roadmap and Business Case [R]

G2 to G3: Oversee implementation Quality and

provide expertise based leadership to project teams

[C]

G3 to G4: Work with Enterprise senior management

to define capability continuous improvement plan

and Value Management [R]

Program and Project Management:

G1 to G2: Review Transition Plan and Business Case

[C]

G2 to G3: Manage Transition Plan, Resources and

Scope [A]

G3 to G4: Close the project [C]

SDLC, ITSM and OCM:

G1 to G2: Help adapt reference architecture that

conform to Organization Constraints [C]

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85

G2 to G3: Define logical business requirements,

enhance automation and prepare organization for

adoption of new and/or enhanced capability [R]

G3 to G4: Support, Maintain and Enhance Enterprise

Capabilities [R]

BT Governance [Decisions]

G0 to G1: Business Strategy, Transitioned

Capabilities, Potential Business Value (Senior

Management)

G1 to G2: Roadmap, Transition Plan and Business

Case (Senior Management)

G2 to G3: Transitioned Capability and Organization

Readiness (Capability Owners)

G3 to G4: Value Management (Senior Management)

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Review Questions and Exercise

The Capability based Value Delivery (CBvd™) process defined in this section enables end-to-end information flow and

governance. If you were to process an existing Business Strategy through the CBvd™ process:

What business value can be realized?

Whose help will you need to change your current Business Strategy delivery process?

Which discipline will be affected the most?

Exercise

Apply the CBvd™ Process to rationalize your current portfolio of projects.

One approach to rationalization is to have a clear understanding of which Enterprise Capability the investment will enhance, by

how much and a greater understanding of the business value.

Steps:

1. Define a Value Statement for Each Project.

2. For projects which you cannot define the value statement, set them temporarily aside for further investigation.

3. Group Value Statements into each starting gate.

Contents of a Value Statement:

• Unique Identifier:

• Enterprise Capability Affected:

• Current Performance Metric:

• Target Performance Metrics:

• Business Value of Improved Metric:

• Link to Business Strategy:

• Input Required: [Such as the CEO, VP. Directors or Managers]

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Chapter 3 References

1. Advanced Applications of TOGAF®; Course material developed by QRS, http://qrs3e.com/qrs-capabilities/competency-

development/togaf/

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88

Chapter 4: Business Transformation Services

The yin-yang concept describes how seemingly opposite or contrary forces are interconnected

and interdependent in the natural world and how they give rise to each other as they

interrelate to one other.

Abstract

The scope of Business Transformation can be the entire operating model of

an organization and/or create a fundamental change to one enterprise

capability. For example, to restructure current revenue streams from

software licenses to advertising-based revenue is a rethink of the

operating model while to outsource the current data center will be a

change to how one capability delivers services to the organization. In the

second case, the capability is not fundamentally altered; what changes is

“how” it is delivered and leveraged.

The challenge most organizations face however is how to define the scope of

transformation, plan, execute and leverage the transformed capabilities until

the intended business outcome is realized.

This chapter defines all services that Business Transformation Professionals

must provide along the value chain. It is the goal of this chapter to make

the work of Business Transformation Professionals transparent and hold each

professional accountable for both the quality and cost of not just the point of

completion, but also during each phase gate of the capability life cycle.

Key Chapter Sections

Business Transformation: A Holistic View… 89

The Business Transformation Services Model…

94

Service 4.1: Strategic Intent and Business

Strategy… 97

Service 4.2: Enterprise IT Capabilities… 107

Service 4.3: Enterprise LOB Capabilities… 118

Service 4.4: Transition Plan and Portfolio of

Investment for Change… 131

Service 4.5: Execute Change… 141

Service 4.6: Support and Maintain Enterprise

Capabilities… 150

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Business Transformation Services

The role of Business Transformation Professionals is not one

dimensional; it is dependent on the organization`s needs

and maturity of the Business Transformation capability.

This chapter highlights several services that should be

delivered by Business Transformation Professionals.

However, the capacity to do what’s needed will depend on

the workload in the organization.

Business Transformation: A Holistic

View

The following figure highlights the Capability Based Value

Delivery Model as was discussed in Chapter 3.

Figure 14: Capability Based Value Delivery Model

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The Model describes how various disciplines/frameworks work together to create a Business Transformation Value Chain; this

Value Chain is articulated in the following table.

Table 4: Summary of the Business Transformation Value Chain

Value Chain Capability Based value delivery phase Value Statement Enabling Frameworks

Define

Strategy

Phase gate G0 to G1

Strategic Intent

Enterprise Capabilities

Change Strategies

Business Strategy

Business and Change strategies

are aligned to enterprise goals

and communicable to next level

in the Organization

Five Forces Analysis

Value Chain

Strategic Themes Mapping

Balanced Scorecard

Enterprise Architecture

Systems thinking

Change Plan

and Value

Generation

Phase gate G0 to G2

Enterprise LOB and IT capabilities

Optimize current capabilities performance

Measure capability performance and

manage architecture requirements

Make business strategies explicit

Architect roadmap for each strategy and

define an integrated portfolio of projects

Decompose enterprise

capabilities into supporting

capabilities and work with all

stakeholders to optimize their

performance

Explicitly link Business

Strategies to Supporting

capabilities and their target

performance

Enterprise Architecture

Enterprise IT Architecture

Enterprise HR, Finance,

Supply Chain etc.

Architectures

Portfolio Management

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Value Chain Capability Based value delivery phase Value Statement Enabling Frameworks

Execute

Change

Phase G2 to G3

Execute change programs and Projects

Develop and implement technical, process

and people changes

Transfer transitioned capability into

production

Scope, cost and time of the

projects and programs is already

defined in the architecture

roadmap. This phase ensures

the capability is transitioned as

planned.

Enterprise Architecture

Project Management

SDLC

OCM

ITSM

Lean Sigma

Industrialize

Change and

Support

Capabilities

Phase G3 to G4

Stabilize Change

Plan future changes continuously and

maintain

Monitor capability performance

Stabilize and leverage capability

to optimum utilization

ITSM

Lean Sigma

Enterprise Architecture

Enterprise

Capabilities

Repository

Phase G0 to G4

Define and Manage repository of

Enterprise capabilities

The capabilities repository if the

DNA of any organization, it

provides a real-time data to

allow senior management to

steer the enterprise ship

Enterprise Architecture

Financial assets portfolio

management

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Value Chain Capability Based value delivery phase Value Statement Enabling Frameworks

Enterprise

Performance

Phase G3 to G4

Capability performance dashboard and

oversee performance governance

Enabling business outcomes

Assess gaps between capability

performance and business outcomes from

different perspective – customer, supplier,

internal and financial

Maintain alignment between

capability performance and

business outcome

Ensure continuous alignment

between investment in change

to business outcomes

• Five Forces Analysis

• Value Chain

• Strategic Themes Mapping

• Balanced Scorecard

• Enterprise Architecture

Systems thinking

Outline of Business Transformation

Services

The following services are performed throughout the

Business Transformation Capability life cycle.

• 4.1 – Strategic Intent and Enterprise

Capabilities: Translate Strategic Intent of the

Enterprise into Executive Capabilities. The process to

review current capabilities is often undertaken by

senior management and this analysis mostly focuses

on opportunities and threats faced by the

organization:

o Input: Enterprise Vision, Strategic Intent and

Repository of Current Enterprise capabilities and

their performance

o Output: Target capability(ies) identified,

improved performance measure for each

capability articulated as well as how improved

capability performance will deliver the intended

business outcomes; the Business Transformation

Strategy

o Decision: Senior management need to decide

which capabilities the organization will lead,

follow and be on par with industry expectations

• 4.2 – Enterprise IT Capabilities: Translate

Enterprise Capabilities into IT Capabilities and

communicate the IT Performance Measures

o Input: Output of Service 4.1, and Output of

Service 4.3

o Output: Define enterprise IT capabilities, their

performance measures, metric and performance

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governance. The scope of this service also

includes how to leverage current capabilities to

their maximum

o Decision: Determine the right allocation of IT

resources to meet the required performance for

Enterprise IT capabilities

• 4.3 - Enterprise LOB Capabilities: Translate

Enterprise Capabilities into line of business (LOB)

capabilities – that include Finance, HR, Legal, IT and

so on – then communicate the performance of each

capability and link their performance to the

Enterprise objectives (as described in the strategic

intent).

o Input: Output of Service 4.1 and Service 4.2

o Output: Specify capabilities in the line of

business, their performance measures and

metrics over the execution of these capabilities

and their respective service level agreement.

o Decision: Gain consensus on expected capability

performance and how it will be measured.

Ensure capabilities are performing to the agreed

upon service level and capability performance is

enabling the intended business outcomes

specified by the Enterprise Vision and Strategic

Intent.

Note: Services 4.2 and 4.3 are developed

iteratively and concurrently as the majority

of capabilities influence each other.

• 4.4 – Transition Plan and Portfolio of

Investment for Change: Define the Capability

Transition plan for a new and/or enhancements to

an existing capability.

o Input: Business Transformation Strategy from

Service 4.1

o Output: Capability Transition Roadmap,

resolution of interdependency, business case for

each strategy and define the portfolio of projects

along with required resources

o Decision: The selection of projects to start the

project execution phase is complete

• 4.5 – Execute Change: Be part of the

implementation team to ensure the capability is

being transitioned to the required state.

o Input: Architecture of the Business Strategy

from service 4.4

o Output: Transitioned capability is deployed into

production

o Decision: Transitioned capability meets the

capability performance service level defined as

scope of the project and capability

owner/custodian (Enterprise Architect for LOB)

has signed-off on the transitioned capability

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• 4.6 – Support and Maintain Enterprise Capabilities: Architecture of Capability Exploitation and Value

Management.

o Input: Transitioned capability has been deployed into production and is being stabilized

o Output: Capability performs but requires a decision to continue or to retire

o Decision: retire or continue to invest in capability to bring its performance to expectations

Video 22: The Right Level of Information for Decision Making

The Business Transformation Services Model

It is often challenging to determine the starting point of a Business Transformation initiative. The organization structure that is

built to effectively run day to day operations is of very little help, rather it adds to confusion when it comes to transformation.

The following figure highlights the major business transformation activities. It is our opinion that the starting point of any

business transformation, regardless of the scope, should be 4.1; that is we need to understand how the altered capabilities

affect the Strategic Intent and Vision of the enterprise.

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Figure 15: Business Transformation Closed Loop

Deliverables of Service 4.1 (1, 2) influence both services

4.2 and 4.3. While 4.2 and 4.3 both influence each other,

their influence and conflicts are balanced and managed by

going back to service 4.1.

The change strategy, which is one of the outputs of 4.1, is

an input (3) into 4.4. The output of 4.4 which is

represented by (4) is the execution of change projects; 4.5.

Service 4.5 triggers (5) to stabilize and maintain enhanced

capabilities.

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Flows (6) and (7) occur when the transitioned capability is

effectively utilized and the performance of each capability is

linked back to the strategic intent; this closes the loop for

how the services are delivered.

This closed loop process ensures the necessary

transparency and accountability throughout the business

transformation process. It is the responsibility of enterprise

management that skilled resources are assigned to each

service and the skill level needs to be validated by third

party certification criteria such as the Open CA program

from The Open Group.

The following sections describe each service in more detail.

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Service 4.1: Strategic Intent and

Business Strategy

How can you be certain that your enterprise resources are

aligned to support your Enterprise Vision and Strategic

Intent? This chapter provides step by step instruction on

how to ensure constant alignment so that:

Subsequent constituents understand what is

expected of them

They can be held accountable for outcomes

Senior management can be held accountable for

setting the right strategy for the rest of the

organization

Trigger for this Service

Depending on the management style – such as Maintain,

Follow or Lead – of the organization, different events will

trigger this work effort:

• Maintain – An existing enterprise capability be

enhanced, eliminated or operated under a different

model

• Follow – Change in market conditions forces the

organization to revaluate their current enterprise

capabilities

• Lead – Extend existing enterprise strengths and

through innovative products and services, change

the rules of the game in the market

Input: Strategic Intent that describes the goals of the

enterprise over a specified period

Enterprise Vision

Strategic Intent

Enterprise Values

Output: there are many intermediate deliverables;

however the following is a brief list of deliverables from this

service

Enterprise Capabilities

Run the Business Strategy – leverage existing

enterprise and supporting capabilities to produce

desirable outcomes

Change Strategy – define what capabilities must

change, new performance target, estimate budget

and enterprise value that can be realized through

the enhanced capability

Business Value

Decisions: documented to help make investment

decisions

Transition capability: No Impact

Business Outcome: No Impact

Link to overall Capability Based Value Delivery

The following figure below defines how this service is lined

to the overall business transformation value chain.

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Video 23: Strategic Architecture – Define the Organization’s Identity

Figure 16: Business Strategy and Capability Based Value Delivery Life Cycle

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99

Tools of the trade for this service are:

Value Chain

Five Forces Analysis

Capabilities Definition and Strategic Themes

Mapping.

In addition, we apply the TOGAF® ADM, Enterprise

Continuum and Skills Framework to:

Translate Strategic Intent into Value Chain and

Enterprise Capabilities

Definition of Supporting IT and line of business

Capabilities

Aggregate Transition Plan of Enterprise capabilities

into both “run” and “change” the Business Strategies

Steps to define Strategic Map

To translate strategic intent into business strategies, a

three step process is recommended. The rationale behind

these steps is to simply enable a division of and also allow

the development of the most effective business strategy.

Step 1: From the Board of Director’s point of view, define

capabilities that are required to achieve the mission of the

organization.

Figure 17: Define Strategic Map

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Work Performed

Market Analysis using 5 Forces Analysis

Refine Value Chain

Categorize executive capabilities into Strategic (i.e.

will lead in the industry) and Operational (i.e.

necessary to compete)

Team Leader Skills

Ability to facilitate, communicate and refine strategic

analysis into Executive Capabilities

Open CA L3 – Chief Architect Stream

Experience from multiple Industries

Deliverables

Defined Executive Capabilities

Measures and Metrics (Current and Target for each

Capability)

Opportunities and Threats Analysis

Step 2: With input from Step 1, define what capabilities of

the organization will be affected in order to achieve the

expected business outcome.

Figure 18: Define Executive Capabilities map with explicit timeline

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Work Performed

Define the Value Chain

Extract new and current executive capabilities

Define capability attributes

Define the target state and the attained business

value

Define the operating model

Apply common IT capabilities

Define a transition plan based on business needs,

organization and technology capabilities

Allocate portfolio of investments

Team Leader Skills

Ability to analyze opportunities and threats within

the context of the strategic intent

Deep understanding of the industry

Deep architecture thinking skills

Ability to extract common business capabilities and

work with IT Architecture to define an ideal

transition map for the business and IT capabilities

Strong ability to apply common technology

capabilities (capabilities available in industry or

possible to innovate)

Open CA Level 3 preferred Enterprise Architect

(Senior Level 2 certified may also have the requisite

skills)

Deliverables

Business strategies that are explicitly linked to

capabilities

Measures and metrics (Current and target for each

capability)

Strategy owners have clearly accepted the

RESPONSIBILITY and ACCOUNTABILITY for the

resulting business outcomes

Step 3: With input from Step 1 and Step 2 as well as an

assessment of the current directive capabilities, define a

pragmatic transition plan. Ensure balance of need to do

something against the organization's ability to do it.

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Figure 19: Activities need to complete Enterprise Strategy

Work Performed

Review business strategies

Map required capabilities: new, to refresh and

existing

Define a Value Chain

Define the architecture vision and directive

capabilities for the impacted strategy

Define a transition map for the affected capabilities

Team Leader Skills

Ability to analyze the current capability strengths

and weaknesses from the context of the organization

Able to define a high level Capability roadmap, able

to transition complexity, govern the implementation

and exploitation roadmap

Open CA Level 2 Master IT Architect

Deliverables

Balanced business strategy with the described

impact of each capability by the strategy objectives

Video 24: Timeline for Strategic Architecture

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103

Quality Checklist

The purpose of the quality checklist is to ensure that the deliverables meet the needs of both the decision maker and the

role(s) that must take subsequent action after the decision is made.

Information Gap Assessment

Complete the following checklist for each enterprise and supporting capability

Capability ID: _____Capability Name: ___________

Table 5: Capability Quality Checklist

No. Condition G Y R Remark

1 The business process [Final Value Product] that this capability enables has

an explicitly defined with start and end state process definition

2 Capability performance metrics are established and regularly measured

with data collected as part of the natural workflow

3 The current performance level is computed, ideal performance level is

established based on industry architecture for the capability.

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No. Condition G Y R Remark

4 Senior management has explicitly categorized capabilities as follows for the

organization:

Will lead the industry?

Will trend with industry Average?

Commodity – i.e. capability offers relatively little competitive

advantage?

5 For an Enterprise Capability, the owner and all supportive capabilities are

explicitly defined

6 For a Supporting Capability, the owner and performance criteria is

explicitly defined

The evaluation requires quality of information from both

decision maker and stakeholder perspectives who have

acted after the decision is made.

G: Green - information is sufficiently detailed

Y: Yellow – enough to make decision, more detail

must be provided to ensure effective transition to

next step

R: information is not sufficient to make decision

Output: Strategy Checklist

For each strategy, ensure the following questions are

explicitly asked and answered by both the Sponsor –

strategy owner – and the assigned Business Transformation

Leader – role that is RESPONSIBLE for defining the Strategy

Roadmap – and that the assessment has been completed

to their satisfaction.

Strategy ID: _______Strategy Name: ______________

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Table 6: Strategy Quality Checklist

No. Condition G Y R Remark

1 Strategy Direction, SMART Objectives, Guidelines and

Constraints are defined

2 Strategy owner is defined

3 All capabilities for the strategy are mapped in the enterprise

capabilities map

4 The Target transition state for each capability in terms of

capability performance metrics are defined

5 The Business value of the strategy is explicitly defined in terms

of financial, customer, supplier and organizational impact

6 The role who will be defining the strategy roadmap is defined

7 Conflicting constraints such as scalability, optimization,

responsiveness, innovation and others are prioritized

The evaluation requires quality of information from both

decision maker and stakeholder perspectives who have

acted after the decision is made.

G: Green – information is sufficiently detailed

Y: Yellow – enough to make decision, more detail

must be provided to ensure effective transition to

next step

R: Red – information is not sufficient to make

decision

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Review Questions

Q1: What are the major attributes of a capability? Give an Example.

Q2: Why are concepts such as Value Chain, Five Forces Analysis, and Strategy Mapping significant for a Business

Transformation professional?

Exercise: Capability Map

Scenario: Consider the following scenarios

Auto Insurance Industry: One-Touch Service

Financial Services: Time to Develop Innovative Financial Products

Banking: Customer Experience

Healthcare: Population Health

IT Industry: Cost of IT

Deliverable

Capability Map: Defines the capabilities required to address the opportunity defined.

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Service 4.2: Enterprise IT

Capabilities

This service decomposes enterprise capabilities into the

next level detail. For each capability, the practitioner must

define performance measures and governance for capability

performance as well as the resulting value measurement.

Trigger for this Service

Translate Enterprise Capabilities into supporting ICT

capabilities as well as all other supporting LOB capabilities.

These capabilities may be managed and leveraged by HR,

Finance, Supply Chain, or any other line of business. ICT

and LOB capabilities often drive each other, like the yin and

yang, technology specifies what is possible to engineer and

lines of business specify what it takes to win (i.e. what is

needed to achieve a desired outcome). Supporting

capabilities are often the decomposition of Enterprise

Capabilities and their collective performance enables

business outcomes.

For the purpose of the discussion in this section, we will

focus exclusively on ICT Capabilities. Similarly, other LOB

capabilities can be defined and may be defined in

subsequent releases of this book.

Input: Strategic Plan

• Enterprise capabilities, performance target, explicit

linkage between capability performance and

business outcome

• Change Strategy – capabilities that need to

transition to new performance targets, defines the

cost and benefit of being at the new target

• Run Strategy – leverage existing capabilities to run

the business

Output: there are many intermediate deliverables;

however, the following is a brief list of deliverables from

this service

• Supporting capabilities, reference architecture,

capabilities performance scorecard, industry

benchmarks, and continuously maintenance of

enterprise architecture requirements for each

capability and opportunity if all requirements are

addressed (referred to as value in the pipeline).

Business Value

• Decision: help identify the impact of any strategy on

the enterprise

• Transitioned capability: No Impact

• Business Outcome: Monitor capability performance

and link to enterprise goals. This consumes the

majority of time for business transformation

professionals.

Link to overall Capability Based Value Delivery

The following figure defines how this service is aligned to

the overall business transformation value chain.

The required tools for this service are:

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Value Chain: Enterprise ICT, deep understanding of

other lines of business

SWOT (Strengths, Weaknesses, Opportunities and

Threats) Analysis

Current State of IT Capabilities

Strategies to develop partner and/or outsource

Capabilities

Figure 20: Enterprise and Supporting Capabilities

ICT Capabilities

LOB Capabilities

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109

This service leverages the TOGAF® Content Framework,

Enterprise Continuum and Technical Reference Model to

define Enterprise IT Capabilities in terms of:

Front Office: capabilities leveraged by staff to

directly serve the customer

Back Office: capabilities leveraged by support staff

to ensure effective operation of the organization

Common IT: Business Shared Services, ICT

capabilities that are used by more than one line of

business and outside the exclusive domain of ICT

Basic IT; IT Hygiene: fundamental ICT capabilities

that fall exclusively under the domain of ICT such as

platform and storage

Protection of Information Assets: capabilities

that help protect the enterprise’s intellectual

property and information

Transform the Enterprise: capabilities required to

change the organization continuously

Steps to Translate Enterprise

Capabilities into ICT Capabilities

Note: Unfortunately there is no single prescriptive

way to perform. The following is on practices that

were employed and found useful.

There is no single prescriptive way to perform this service;

the following is a practice that we have used successfully.

This work generally proceeds from three fronts:

1. Study the Enterprise Value Chain, Enterprise

capabilities and decompose the process aspect into a

conceptual level of detail and then identify

automation opportunities.

2. Start with ICT capabilities and study the processes

these capabilities automate.

3. Aggregate the automation opportunities from #1

with the automation from #2 to define the ICT

capabilities, define start and end conditions and

performance measures.

Considerations to Derive Capabilities

As an exercise, let’s assume that you are the leader for the

IT organization; how would you communicate ICT

capabilities?

An approach that you can take is to make the following

considerations:

Communicate capabilities from an external view of

IT: WHAT does IT do for the organization? For the

organization and certain business units that benefit

from the capability, where does it: Lead, Support

and Contribute?

How does IT’s contribution meet the organization’s

or certain business unit’s goals?

How do we also resolve IT’s contribution from a

customer perspective?

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From this analysis, the following ICT Capabilities can be

derived as shown in the next figure.

Video 25: Enterprise Considerations for ICT

Capabilities

Figure 21: A view of 6 ICT Capabilities

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111

The six ICT capabilities articulated are:

1. Base IT: Ability to provide basic ICT service in a

cost effective manner. These are also called IT

hygiene capabilities; IT is expected to do them well.

2. Common Services: ability to deliver services that

are shared by more than one Line of Business and

are not core IT.

3. Back Office: Ability to provide back office services

that are cost effective

4. Front Office: Ability to delight the customer,

impacts all customer touch points

5. Protect Enterprise Information Assets: Ability to

protect the information assets of the enterprise

including intellectual property as well as data that

customers have entrusted.

6. Transform the Enterprise: Ability to exploit ICT

capabilities to help Enterprise Capabilities perform at

level required by the strategic Intent.

In the following section, each capability will be described in

detail.

To Provide Basic IT Services

The IT Organization is entrusted by the enterprise to

provide basic IT services to an effective service level

agreement, at the lowest possible cost and risk. Typical sub

capabilities include: Platform and Storage, Network, Data

Management, Transaction Management, etc.

Capability Performance Metrics

Total Cost of Service at each Service Level (note

these are business service levels that articulate

business expectations of outcomes, not IT Service

levels)

Time to procure and provision service

Technology risks (number of technology components

and the type of application that are not under a

support contract)

Business Goals7

Optimize cost of technology service: current

cost/unit, [compare to industry benchmarks and

plan for the organization’s cost per unit of service

and business SLA]

Time and cost to provision and procure a service;

not just technology

Total cost of Basic IT/unit of revenue, customer and

so on

To Provide Common IT/Business

Services

Common business services are often perceived as

technology services, but the primary consumers are the

Value Generators, referred to as users, of the organization.

The services are often built once and leveraged by a

number of different business divisions. Examples of such

7 Business Goals are often defined in the Enterprise Strategic Intent

Document

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services include: Data Warehouse (DW) and Business

Intelligence (BI). This also includes cost of people doing

analysis, Enterprise Content Management, and Payment

Processing, Web and Video Conferencing, Integrated Voice

Recognition (IVR) and so on.

Capability Performance Metrics

Number of common capabilities

Cost and Time to define, build and exploit each

shared capability: establish the current, industry and

target performance measures

Percentage of total IT spend on common services

Business Outcome

Measures impacted include: total cost and time to

respond to changes in business strategy, the total

cost and timeline includes the cost and time to

assess the impact of business climate change on the

enterprise

Reduced total cost of automation per revenue,

patient or any other significant unit of measure

o Example: Cost of DW/BI per subject area,

Cost of Content Management per customer

and so on.

To Provide Back Office Services

A Back Office Service supports the organization’s internal

activities in order to run the business effectively and

efficiently. These activities often support the delivery of

the Final Value Product8 but are not of primary importance.

Typical services include Finance, Human Resources, Legal

and so on.

Capability Performance Metrics

Total cost of service and service level agreement to

the Value Generating sector

Time and cost to change a current service in order

to respond to the changing business climate

Business Outcome

Percentage of total enterprise operations spent on

back office services

o Example: The cost to manage Payroll for X

number of employees within a jurisdiction

To Provide Front Office Services

A Front Office Service is one that directly benefits the

customer and impacts those that provide direct support to

the customer. These activities often deliver the final value

product, but they can also be supportive. These services

are the most visible to the customer and therefore by

nature are more sensitive than back office services.

Examples include for Banking: ATM, systems used by the

tellers, batch processes that update to customer accounts

prior to the opening day, sandbox to beta test new services

and so on.

8 The Final Value Product is a product or service that the end customer

receives for which he/she is prepared to transact with the organization for either today or in the future

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Capability Performance Metrics

Time and cost to launch new product

Customer perception and satisfaction indicators

Business Outcome

Market share

Profit margin

Note: One of the primary motivations for classifying

services under Capability #3 or #4 is the guidance of

optimization. Capability #3 is optimized around cost

while Capability #4 is optimized around customer

perception and satisfaction.

To Protect the Assets of the

Organization

This capability enables the organization to place and

monitor the appropriate controls on each asset, these

assets can include: Physical, Intellectual, Trusted

information such as Patient Health Information (PHI),

Personal Identification Information and personal

information.

Capability Performance Metrics

Time and cost to classify assets

Time and cost to apply and manage controls

o Cost and time to manage access controls

Time and cost to respond in the event of a control

failure

Cost to adapt controls to changing business, political

and financial circumstances

Time and cost to develop a legal position in the

event of a breach

Business Outcomes

If the above capability performs at a desired level of

performance, the enterprise can realize the following

business benefits

o Reduced total cost and incidences of breach

o Improved Enterprise Risk Measure: Risk

Assessment Method9

Transform the Enterprise

The Transform the Enterprise capability enables the IT

Organization to provide specific services to the entire

organization under changing business conditions. These

services enable the Business to continually re-invent itself

and assure that the current assets are exploited to their full

potential.

Capability Performance Metrics

Number of Improvement opportunities [think of

these as enterprise architecture requirements]

Time and Effort to Plan [elapsed time to assess an

improvement idea and the effort required to put the

idea into an Action Queue]

9 ISACA has a method to assess the level of risk, such as risk associated

with inappropriate access

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Plan Efficiency [Percentage of projects on-time, on-

budget and to-scope]

Plan Effectiveness [Percentage of transitioned

capabilities that enable the expected Business

Outcome]

Quality of Information for Decision Making

[Percentage of stakeholders that give an excellent

rating to the information provided to make the

necessary decision(s) at each Phase gate]

Business Outcomes

If the capability performs at a desired target, these

business outcomes will be realized:

o Reduced cost of planning

o Business benefits will be realized from doing

the right project correctly the first time

o Total New Investment will have a higher

return

o Business value expected will likely be realized

Through the improved transformation capability, the

organization will improve the probability of executing

the right projects, correctly the first time

Video 26: Are the Right Measures Being

Tracked?

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Table 7: Summary of Capabilities and Measures for the IT Organization

Capability and Enterprise

Performance Indicators

Operational Definitions Current

Measure

and Metric

Target

Measure

and Metric

Total Cost of Technology and SLA

(SLA Performance, Availability, RTO,

RPO)

[IT Leads this metric]

• Total Cost of Base Technology Supporting

Capabilities

• Total Cost of Common Business sub Capability

Technology Risks

Enterprise Risks

Total Cost of Breach

[IT Leads this metric]

• Number of Technology components that support

critical processes and have no vendor support

• Total Cost of Breach

Time to Market

[Business Agility – Share of revenue

from new products]

[IT supports this metric]

• Time and Cost to launch a new product

Customer Perception and

Satisfaction

[Market share and Profit Margins]

[IT supports this metric]

• Customer perception of the organization’s brand

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Capability and Enterprise

Performance Indicators

Operational Definitions Current

Measure

and Metric

Target

Measure

and Metric

Value from New Investment –

Risk to New Investments in Business

Performance Improvement Programs

[Value from new investment : ROI]

IT supports this metric as a COE10]

• Time to Plan:

• Cost to Plan:

• % of Projects on Time:

• % of Projects on Budget:

• % of Projects transitioned Capacity to planned

State:

• % of Capability Owners that accepted the

Transitioned Capability

Value in Pipeline

[Long term sustainability and corporate

citizenship

Potential value of products/services in

the pipeline]

[IT supports this metric as a COE]

• Organization Chatter: # of threads and

feedback/employee

• Value of in Pipeline:

• Cost Reduction

• Revenue

• Staff Morale

• Corporate Citizenship

10

Centre of Excellence

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Review Questions

Q1: What is the Business Value of the Enterprise Continuum and how does it help improve the quality of ICT Strategies?

Q2: Discuss the role relationship between SIB and IT Strategies?

Q3: IT Strategy and IT Capabilities: discuss approaches on how to acquire the required funding.

Exercise: Base IT Strategy

For the Base IT Capability, how can we exploit pre-defined

performance measures and established current and target

metrics?

Suggested Approach: Please note, this is not the only

way to accomplish this task.

Step 1: Define operating cost [Budget Perspective]

• Consider complete IT Operating Budget

• Categorize each cost line item into one of six

capabilities

• Decompose the Base IT cost further into each sub

capability

Note: This will provide high level aggregate of

Hardware/Software and Human resource cost. This may

not be precise but is sufficient for this purpose.

Step 2: Determine the Operating Cost [Engineering

Perspective]

Consider each service and compute:

• Ideal Cost – For hardware/software, Human

Resource costs and opportunities for improvement.

Apply the 5 ‘Ws’ (Who, When, What, Where, Why)

methodology to define improvement opportunities

• Apply the improvement opportunities and compute

new cost and risk

• Review industry benchmarks if available

Step 3: Summarize engineering costs and risks against

actual costs and risks, this is sufficient to define the Base IT

strategy which consists of all sub capabilities.

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Service 4.3: Enterprise LOB

Capabilities

In service 4.1, senior management defines the Business

and/or the Change Strategy. The Change Strategy defines

what capabilities must change and also the new

performance target for them, the business value, estimated

cost, risk and the impact of changes on people. This work is

often based on what is referred to as “instinctual

architecture”. This work often lacks the scientific rigour and

largely relies on associative thinking. However, this is the

reality for the senior management team and in turn, senior

management provides direction for the organization.

Trigger for this Service

Define an Architecture Roadmap for a strategy. It could be

driven by a business objective such as improve market

share by 2 percent in consumer goods or an IT objective

such as reduce IT Platform costs by 12% over three years.

A strategy would provide direction, constraints and

additional guidance in pursuing the objective and can also

act as a trigger for this service as explained below.

Work comes into the G1 phase gate through two routes: 1)

introduction of a new capability that results from a change

in Strategic Intent and 2) modification required to an

existing capability as a result of a change in Business

Strategy. The approach to develop architecture for each

work stream is the same, however subtle complexities are

different. For example, modifications to an existing

capability can take a continuous improvement approach,

however, development of a new capability will likely require

more abductive thinking; a concept defined in a systems

thinking framework.

• Input: Enterprise Strategy that includes capabilities

affected, performance measure, both current and

target metrics as well as business value that can be

realized by having the capability perform at the

target level.

• Output: A portfolio of architecture transition plans

and business cases for each affected capability.

[Note: If the architecture transition plan is described

correctly and adequately, project charter for each

transition plan can be developed in less than three

days]

Business Value:

Decision: select a transition plan that will transition

the required capabilities performance from the

current to target at a defined cost, risk and timeline

Transition capability: No Impact

Business Outcome: Investment decision is explicitly

linked to capability performance and accountability is

transparent

Link to overall Capability Based Value Delivery

The figure on the next page defines how this service is

linked to the overall business transformation value chain.

This work is detailed at a conceptual level which implies

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that the architecture specifies “what” must be done and

why. For example, Business architecture in this case

specifies what work is done but not how. Further, it must

specify:

What performance criteria are used to measure

process improvement

What roles are affected and how big is the change

on these roles

Figure 22: Transition Plan and Business Case

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Tools/Techniques Applied

• Architecture Requirements: Identify affected

capability, current and improved performance

targets. Iteratively elicit input from key stakeholders

with respect to what prevents the capability from

performing at the target level.

• Application of the TOGAF® ADM: Application of

the TOGAF® ADM at a conceptual level of detail is

performed to help generate the transition plan and

business case. TOGAF® phases involved include

Architecture Requirements, Architecture Vision,

Business Architecture, Information Systems

Architecture, Technology Architecture, Opportunities

and Solution and Migration Planning.

• Types of Roadmaps: We will discuss two types of

roadmaps: roadmaps for Horizontal and Vertical

capabilities.

o Horizontal: architecture includes transition

plan, business case, execution as well as

value management.

o Vertical: detail architecture to reference

architecture point and explore what

enterprise capability can be improved by

transitioning this capability to new level.

• Process to Develop Roadmap: The roadmap

development process is decomposed into three

steps. The motivation for this decomposition is to

help address Enterprise Architecture (EA) skills

shortages and time to deliver the EA roadmap. This

is a similar approach adopted at the turn of the

century during the industrial revolution when work

was decomposed to match the required skills.

• Artifacts and Deliverables: Finally, we will define

views of architecture analysis for a typical strategy,

sample deliverables, skills and effort required to

develop a typical architecture roadmap.

• Quality Checklist: Since architecture work can

start from two different perspectives: 1) a new

capability(s) or 2) enhancements to an existing

capability(s), we provide two checklists to ensure all

the relevant questions are answered to the sponsor’s

and subsequent implementation team’s satisfaction.

Application of the TOGAF® ADM

To develop the Roadmap for a collection of Enterprise

Capabilities or a Business Strategy, the application of

TOGAF® methods is used to generate a conceptual level of

detail. This level of detail should be sufficient to define a

pragmatic transition plan and business case. In this phase

the need, quality and cost to acquire the information is

carefully balanced.

Additionally, iteration is applied from two points of view: 1)

level of detail (conceptual) and 2) scope of the Enterprise:

Industry Perspective first then the architecture to meet

your organization’s constraints.

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Without defining architecture from the industry perspective

first, the architect is dangerously misleading the

organization by not communicating what is possible.

Figure 23: TOGAF® ADM and Architecture Roadmap

Video 27: What is Required for a Conceptual Level Architecture?

Capability and Architecture

Requirements

Architecture Requirements – Obstacles that prevent the capability from performing at target state from various stakeholders point of view

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Table 8: Enterprise Scope and Deliverables

Scope Architecture

Requirement

Architecture

Context

Architecture

Definition

Opportunities &

Solutions

Migration Plan

Industry Define Define Define

Organization Adapt /Define Adapt /Define Adapt /Define Define Define

Note: For the above table, by define, identify from

scratch. For Adapt/Define, adapt industry

architecture in line with your Organization’s

constraints.

Steps to define deliverables outlined in the above TOGAF®

ADM phases are well defined in the TOGAF® 9 specification,

however the objective of this section is to highlight the

critical points for architecture: requirements, context and

definition; opportunities and solution as well as migration

planning.

Architecture Requirements: from the perspective of

direct reports of the Capability owner, through a formal

interview process, we need to gain insight by asking the

following probing questions:

What prevents the capability from meeting its target

performance?

How will you know when the capability is performing

at the target state?

What are your competitors or new entrants doing

with regards to these obstacles?

What approaches would you suggest that could help

the industry/organization overcome these obstacles?

o Have any of these approaches been tried

before?

What will be the impact on business goals if the

capability is transitioned incrementally, as oppose to

a big bang approach?

Notes:

1. Prepare for the interview with senior

stakeholders. One classic approach is to put

yourself in the person’s shoes and see what will

be your answer to these probing questions.

2. Do not – I repeat Do not – analyze architecture

requirements while you are eliciting them;

capture the concerns and have them elaborated.

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3. Among different stakeholders, architecture

requirements will conflict. This is expected and

conflict is a good thing as it will provide greater

value to your architecture.

Architecture Context – Iterations allow initial mobilization

of architecture activity by establishing the architecture

approach, principles, scope, and vision.

Architecture Definition – Iterations allow the creation of

architecture content by cycling through Business,

Information Systems, and Technology Architecture phases.

These iterations also allow high-level viability and feasibility

tests to be carried out by looking at potential opportunities

and migration plans.

Opportunities and Solutions – Iterations enable

discussion between what is ideally possible and what the

organization has the appetite to absorb.

Migration Planning – Iterations support the creation of

formal change roadmaps and allocation of resources to

develop defined architecture

Video 28: Architecture Requirements

Should Not be Analyzed When Elicited

Types of Architecture Roadmaps

Traditionally, Enterprise Architecture work has taken three

perspectives: Strategic, Segmented and Capability. To be

effective, one has to consider all three perspectives

simultaneously. This section will discuss what to focus on

and when.

• Strategic Architecture typically translates Enterprise

Strategic Intent into Enterprise Capabilities. This

work is done in Phase Gate G0 to G1 in the CBvd™

life cycle.

• Segmented Architecture is developed when the

transition of several Enterprise Capabilities are

grouped into one business strategy and investment

decisions are made collectively as opposed to one

capability at a time. The majority of architecture

work consists of segmented architecture. Examples

of segmented architecture include a single view of

the customer that will: enable an increase in sales

by 30%, optimize cost and risk of IT to below the

industry average.

• Capability Architecture refers to when we architect

the transition of one capability at a time; this type of

architecture is often defined at the industry level.

Examples include the ability to manage and

disseminate enterprise content, ability to deliver the

right analytic information to decision makers and so

on.

Regardless of the perspective, architects traditionally

produce two types of roadmaps.

1. Roadmap to transition capabilities to enable

expected Business Goals: Define architecture,

Transition Plan, Business Case, Implementation

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Plan/Governance and Value Realization. This is often

referred to as Segmented Architecture.

2. Define architecture roadmap without a specific

mandate to define a Transition Plan: there is no

commitment to make a further investment at this

time. An example of such architecture is to simplify

IT and reduce complexity. The resulting architecture

produces enterprise standards and governance. Over

time, the current technologies are transitioned to

standard technologies.

Steps to Develop Roadmaps

Here are some considerations before starting work on an

architecture Roadmap:

Level of Detail: Keep it conceptual, the focus

should be on “what” and not “how”.

Key Stakeholders: Understand their roles;

determine who is responsible for results. Typically,

these are direct reports of those who define why the

intended business outcomes are important.

Decision: Architecture work will provide sufficient

detail to determine the scope of the Transition Plan

(brief program/project charter), risks and explicit

definition of the Business Case and rationalization of

the investment portfolio across multiple strategies.

Guidance: The details should provide sufficient

guidance to the implementation and value

management teams.

Deliverables: The Architecture Definition

Document, Transition Plan and Business Case

Artifacts: AS-IS and TO-BE process, people,

organization, information, data, application and

technology architecture models as required

Step 1: Define reference architecture without limit to the

organization’s constraints. Define the ideal architecture and

transition plan. This step provides guidelines and a quality

checklist to ensure output quality and enable continuous

learning.

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Figure 24: Define Industry Architecture for a Capability

Work Performed

Define Reference Architecture for each Capability

Define capability measures and performance

benchmark

Define steps to adapt the architecture to

Organization Constraints

Team Leader Skills

Ability to define Business, Data, Information and

Technology Architecture

Ability to use a defined process to capture the

current state

Assess current capability performance

Architectural thinking

Integrate each capability transitioned architecture

into the strategy transition architecture

Minimum Open CA Level 2 certification

Experience with the specific capability or in a

number of capabilities

Deliverables

Architecture artifacts for Capability, Business, Data,

Application and Infrastructure

Step 2: Define Architecture for a strategy by starting with

reference architecture for each capability, define and

integrate the transition architecture for the entire strategy

holistically. Note, the architecture in step 1 considers only

global constraints while the architecture in this step adapts

a global reference architecture for the organization’s

constraints.

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Figure 25: Develop Capability Architecture for the organization

Work Performed

Define Reference Architecture for each Capability

Define capability measures and performance

benchmark

Define steps to adapt the architecture to the

organization’s constraints

Team Leader Skills

Ability to define Business, Data, Information and

Technology Architecture

Ability to use a defined process to capture the

current state

Assess current capability performance

Architectural thinking

Integrate each capability transition architecture into

the strategy transition architecture

Minimum Open CA Level 2 certification

Experience in the specific capability or a number of

capabilities

Deliverables

Architecture Artifacts – Capability, Business, Data,

Application and Infrastructure

Adapt Reference Architecture artifacts; may need to

create another view to facilitate dialogue among

internal stakeholders

Architecture Review Board sign-off

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Step 3: Create the Transition Plan and Business Case by

adapting Strategy Architecture to conform to the Enterprise

planning constraints. The output of this process is often an

input into Enterprise Investment Portfolio Management.

Figure 26: Create the Investment Portfolio of Projects

Work Performed

Define the Transition Plan that conforms to the

enterprise’s constraints at the time of Business

Planning

Define the Business Case

Get the Strategy/Capability sponsor to understand

the Value Statement, capabilities that will be

transitioned, the project success criteria and the

desired business outcomes

Team Leader Skills

Organization Knowledge

Understanding of Financial, Business and

organization change constraints

Senior Project Manager or Open CA Level 2

certification

Experience in the architecture life cycle

Deliverables

Organization specific Transition Plan and Business

Case

Value Statement and Capability Transition Sign-off

by the Strategy Sponsor

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Quality Checklist

After the Enterprise Architect completes the architecture,

Transition Plan and Business Case from the strategy

owners’ perspectives as well as program implementation

teams’ points of view, use the following quality checklist

scenario to perform the necessary quality assurance of the

work performed.

Table 9: Quality Checklist – Transition Plan for a New Capability

No. Condition G Y R Remark

1 Directive Capabilities transition stage: performance

measures and metrics are explicitly defined and agreed by

both the implementation, capability custodians and by the

strategy owners

2 Resulting Business Strategy goals are explicitly defined – test

with SMART criteria against Business Goals

3 Strategy/Capabilities owners have signed off on the resulting

Value Statement

4 Scope of each initiative – cost, timeline and inter project and

external project dependencies are defined

5 Initiatives are detailed to meet the portfolio planning needs

6 Initiatives detail can allow PM to complete project initiation

and planning in less than three days

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No. Condition G Y R Remark

7 After funding is approved and planning (RFP to procure the

systems) is complete – re-assessment of architecture is

completed

8 Architecture artifacts are developed to conceptual level of

detail and communicated to design and implementation

teams

This checklist is often completed by the following

stakeholders:

Capability Owner

Portfolio Management office

The SDLC Team Leader, often the Project Manager

or the Project Management Office Manager

Additional Deliverables

Depending on the organization’s culture and level of detail

required to clear Phase Gate G2, the architect may do

additional work including:

RFI, RFQ and RFP to develop better cost and risk

estimates

A plan for prototype development for a specific

technology and process to better estimate risk and

other considerations

Take the architecture on a “Roadshow” to build

commitment and consensus among stakeholders

who may reside in another organization

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Review Questions

Q1: What is the business value of doing as-is architecture when defining an Architecture Roadmap for a Business Strategy?

Q2: What expertise are required to translate a summary of gaps into a transition plan [hint inductive, deductive and abductive

reasoning]

Q3: How do you know if the proposed architecture is optimum?

Q4: Who are the key stakeholders for Opportunities and Solutions and Migration Planning Phase and why did you consider

them to be key stakeholders?

Q5: How is the Transition Plan for a Common Capability and for a Front Office Capability different?

Exercise: Architecture Roadmap

Business Strategy: Define the architecture roadmap for a Business Strategy that introduces innovative and high-performance

products and services.

• Deliverables: Architecture Analysis, Architecture Definition, Business Case and Transition.

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Service 4.4: Transition Plan and

Portfolio of Investment for Change

The focus of this service is to take the business strategy

roadmap that defines at a conceptual level what changes

must be made to existing capabilities and/or what new

capabilities must be built. The management of this service

is well defined in PMI (Project Management Institute)

methodology and often falls within the known phases of

Initiate, Plan, Execute, Control and Close. The contribution

from architecture is important to assure that the quality

expectations of what is built is aligned and will deliver the

expected value.

Trigger for Architecture Work

Projects enter the G2 phase either via the capability

transition plan and/or directly as an enterprise project that

does not require any adjustment to the capability

architecture but may still require investment allocation,

design and project management involvement.

Engagement: Prior to starting this phase, the final state of

the affected capabilities and process by which these

capabilities will be transitioned to are agreed upon by all

key stakeholders. With information provided, the Project

Managers are able to complete the project charter and

planning activity in just days. During this phase, along with

helping Project Managers get started, the architect in this

phase needs to define the logical and physical architecture

ensuring the detailed architecture conforms to the

conceptual and contextual architecture requirements as well

as to develop the implementation strategy.

Prior to the transition of the capability into production, the

architect will complete the G3 Quality Checklist and gain

approval from all affected stakeholders for deployment.

This will ensure the transitioned capability meets the

established quality criteria.

Input

The Capability Transition Architecture or list of changes to

the capability that can be addressed via design changes

only.

Output

The transitioned capability is deployed into production and

support is given to the ITSM team. Stakeholders are

educated and trained to start using the transitioned

capability, the expected business outcome scorecard is also

updated.

Business Value: Overall, the business value of this service

is a physical change to the impacted enterprise capability.

Decision: help identify the impact of any strategy on

the enterprise

Transition capability: No impact

Business Outcome: monitor capability performance

and link to enterprise goals; this consumes the

majority of a Business Transformation Professional’s

time.

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Link to overall Capability Based Value

Delivery

The overall process includes the definition of architecture at

a logical and physical level of detail. We also need to ensure

the quality of the solution meets the architecture and

architecture of the transitioned capability continuously

remains aligned to the enterprise’s needs.

Figure 27: Deploy the Transitioned Capability into Production

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The service role of Sponsor, Architect and Project Manager

forms a three legged stool; each role has a specific

accountability.

Tools/Techniques Applied

The following tools and techniques as well as their context

are applied throughout this service.

• Architecture Requirements: We need to identify

the potential stakeholders that can provide insight

into obstacles that must be overcome and strategies

to manage these obstacles.

• Application of the TOGAF® ADM: The

implementation Governance phase has two

perspectives, 1) execute Phase G and 2) execute

Phase B, C & D to define the logical and physical

architectures as well as take corrective action if

changes in architecture has an impact on Phase A, E

and F.

• Project Management: Since this phase starts with

the approval to begin formal implementation, the

exploited Project Management Institute defined

processes include: Initiation, Planning, Execution,

Control and Close. The scope of this section is to

define touch-points between the Project

Management and architecture disciplines.

• Project Governance: Organizations often make

extensive use of project steering committees to

govern project implementation. This section will

highlight the role and mandate of various

stakeholders in the steering committee as well as

governance of all implementation contracts as they

were defined in the Architecture Roadmap or in the

architecture change management perspectives.

• Systems Development Life Cycle: Often in this

phase, the underlying systems that make up the

third leg of a capability stool [People, Process and

Technology] are changed to accommodate the

automation of new processes. This section will

provide a high-level discussion of a suitable

methodology: waterfall and/or agile.

• Implementation Strategies: During the

implementation, there is a need to bring various

stakeholders to a common understanding of the

challenge and approach to resolve them. Some of

these areas include organization change

management, data conversion, testing, value

management and so on. This section will shed light

on how to approach these strategies.

• Preparation for Cut-over to Production: This is

the most significant deliverable that the architect

needs to produce and addresses the question: have

all impacts of change been properly mitigated? The

focus is how to minimize the area under the valley

of despair curve from Organization Change

Management theory and it sets the stage of how

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effectively the transitioned capabilities will be

exploited by the capability consumers.

Video 29: The Valley of Despair

Information Gap Assessment

Work enters into Phase Gate 2 through two sources:

1. Transition Architecture for a Business Strategy:

Use the checklist defined in

Table 9: Quality Checklist – Transition Plan for a

New Capability to ensure that adequate information

is provided at the start of Phase Gate G2

2. Changes to an existing capability that does not

require architecture change. Capability performance

can be improved to the target state by design

changes only:

Use the checklist defined in Table 10: Changes to

Capability without Changing its Architecture to

validate the accuracy and completeness of the

incoming information.

Depending on the project’s nature or culture of

the organization, this type of project may not be

part of the formal portfolio approval process.

The checklist provided here can help the practitioner

identify if the previous process has provided sufficient

information to ensure that Phase gate G2 to G3 can be

effectively executed.

Capability ID: _________ Capability Name: ___________

Table 10: Changes to Capability without Changing its Architecture

No Condition G O R Remark

1 Change to Supporting Capability is defined in terms of Capability Performance

Indicators

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No Condition G O R Remark

2 Impact of the transitioned capability on the Business Unit’s performance is

defined as part of the value statement

3 Value statement is accepted by the capability owner

4 Initial or baseline required resource estimates are complete and loaded into

Enterprise Planning Suite

Architecture Requirements

Architecture requirements describe obstacles that prevent

the capability from performing at the target performance

from the key stakeholder’s point of view. During the G2 to

G3 Phase, logical and physical architecture requirements

are elicited and analysed through TOGAF® ADM Phases A,

B, C and D. Any resulting change to deliverables produced

through TOGAF® ADM Phases A, E, F are updated. If the

changes to these deliverables are architecturally significant,

then the architect must inform the capability owner and

project manager. The change to architecture must be

managed through the normal project management change

process of the organization.

Logical Architecture Requirements

The process to elicit requirements should have the following

considerations:

The stakeholders are Subject Matter Experts (SMEs)

who actually interact with the capability and have

“how work is done” level of detail.

The Architecture Roadmap from Phase Gate G1 to

G2 defines the improved business process and in

this phase (G2 to G3) each improved business

process will be matured to the next level of detail

and processes that are manual or automated will be

identified. It is critical for the architect to define

which process should be automated.

An example of logical architecture requirements are as

follows:

1. For clinicalMessage™ to establish a patient centric

collaboration thread within 5 seconds 99.9% of time,

the most responsible team members must be

accurately defined.

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2. For information to be accurate, a clinician must have

the ability to manage their presence and team

assignment while outside the office.

Furthermore, the analysis of the logical requirements helps

develop the Business Requirement Document (BRD) that

becomes an input to the Organization Change Management

Strategy, Functional and Technical Specifications.

Physical Architecture Requirements

Stakeholders for physical requirements are those who are

responsible for the operational work. For example, a

System Administrator may not process orders but ensures

the supporting systems perform accordingly to the service

level agreement. Physical architecture requirements

describe what is required to support those who do the

work.

Example of physical architecture requirements are:

Clients require 99.99% availability, 24x7 with a RTP

and RPO11 of 20 minutes and 2 hours respectively.

To meet this requirement, we will need these

<specified> system management tools.

For a process to complete as planned, we need the

right number of skilled and motivated staff on each

post 20 minutes prior to the start of the shift.

Application of TOGAF® ADM

11

RTO is Recovery Time Objective and RPO is Recovery Point Objective

During the Phase Gate G2 to G3 of Capability Based Value

Delivery life cycle, we exploit the Implementation

Governance Phase of the TOGAF® ADM. Figure 28:

Implementation Governance illustrates the steps and

specific activities described as follows:

Step 0: Implementation Governance Phase in the ADM.

Step 1: Based on the logical and physical architecture

requirements, develop logical and physical architecture

using the ADM Phases B, C and D.

Step 2: Assess if the logical and physical architecture has

discovered any addition information that has an impact on

the conceptual and contextual architecture defined in the

Architecture Roadmap.

Step 3: Assess if the new information has an impact on the

overall capability performance, business outcomes and

capability transition plan. If yes, follow the enterprise

project change management process.

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Figure 28: Implementation Governance

The TOGAF® Skills framework guides the governance and

business transformation competencies. The TOGAF®

Continuum supports the reuse of architectures to help

improve the quality, time and cost to deliver.

Project Management

Capability Transition Governance Service exploits the

competencies of the Project Management Professional

(PMP) certification. Typical activities include:

Initiation: Define Project Charter

Planning: PMP planning activity has multiple views

including, not limited to, resource, communication,

tasks dependencies, OCM, deployment etc.

Execution: Ensures all resources are optimally

deployed to deliver scope outlined in the charter

Control: Corrective actions to manage all risks to

Timeline, Cost and Scope

Close: formally close the project; update the

repository of lessons and enterprise content

Capability Transition Governance

Many teams struggle to define an effective governance

structure for this service. Three key stakeholders who

provide leadership are needed within this service and the

decision authority of each role must be clearly understood

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not only by the team but also by leadership itself; consider

the following for each role:

• Capability/Strategy Owner: This role is held both

ACCOUNTBLE and RESPONSIBLE by the organization

to deliver the intended business results from the

transitioned capability. This role often has the most

trusting relationship with people affected by the

changed process.

• Architect: This role is RESPONSIBLE for defining

the right capabilities, their transitioned state and

roadmap to transition the affected capabilities.

• Project Manager: This role is ACCOUNTBLE to

ensure all resources are deployed effectively to

transition the capability to the target level of

performance as outlined in the roadmap on-budget

and on-time.

The performance of these three roles is often measured by

different measures and they also find themselves in

conflict; hence it is critical that these roles remain aligned

and make undesirable trade-offs in a respectable manner to

each other.

A point of caution to the capability sponsor is that your role

has the most trusting relationship with key stakeholders in

the organization; the other two roles are often filled by

temporary resources/consultants. In the event any member

of the enterprise questions the competencies and decision

rights of these roles, you must render judgement with

caution. It often does not take much to destroy the

credibility of those that are responsible for the benefit you

will consume.

Role of the Steering Committee

In most organization governance frameworks, steering

committees often have explicitly defined roles and

accountability. The committee often reviews timelines, risks

and budget with meetings held once every two to four

weeks. We recommend that additionally, steering

committees should start reviewing one more status report:

The Quality of the Capability.

Too often, transitioned capability is deployed into

production and lacks alignment to fundamental business

requirements and also violates key principles in the name of

least time to market. The result of such decisions is often

not visible until long after the program teams are disbanded

and projects are closed. The front line staff will then need

to deal with deficiencies impacting their ability to help

deliver the required business outcomes.

This section will highlight some key attributes of capability

quality. It should be the RESPONSIBILITY of the program

architect to develop and communicate this report to the

steering committee and this is similar to the role of the

project manager who has the RESPONSIBILITY to

communicate timeline, cost and risks.

Key attributes of Capability Quality that needs to be

articulated to the steering committee include:

Budget and Program Cost

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Program Timeline

Business Capability(ies) affected

Organization Change Management

Compliance to Principles

Integrity of Program Leadership

A working template can be found in Chapter 7 of this book.

Video 30: The Role of the Architect and

Project Manager

System Development Life Cycle

Often within this service there is a change to the

information management system. Both waterfall and agile

SDLC methodologies have their pros and cons, the following

section provide a list of items to consider when selecting

either methodology:

Waterfall Methodology Pointers

Business problems to solve and potential solutions

are reasonably understood

Cost to implement each increment exceeds the

benefit

Agile Methodology Pointers

Neither the business problem or the solution is

understood, hence an iteration is required

The benefit of bringing the capability to market

exceeds the cost to deploy

Organization culture supports quick prototype and

deploy

Organizations can also adopt a hybrid of the two. For a

transaction system, they may adopt Waterfall, but for

reporting and business intelligence they may adopt an Agile

approach.

Implementation Strategies

During the capability transition, there are often instances

where stakeholders have conflicting concerns. Such

concerns include, but are not limited to:

How do we manage the impact of change on people?

How do we stress test the system without using

production data?

Are we going to cut the system into production in a

big-bang approach or is it going to be rolled out to

one group at a time?

How are the new capabilities tested and with what

data?

How much data should be converted on go-live and

after go-live event?

How will communication and training to those

impacted be handled?

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Post go-live, how will we ensure the transitioned

capability actually delivers the intended business

outcomes?

These types of questions are generally addressed in the

form of Implementation Strategies. It is often the

RESPONSIBILITY of the architect to develop these

strategies and the architect often works with the project

manager to include resulting tasks into the regular project

management plan.

As an example, a typical testing strategy may include the

following topics:

Testing Objectives

Developmental and Test Cycles

Detailed Requirements Development Process

Testing Roles and Responsibilities

Testing Methodology

Specific Test Methodology Criteria

Test Case Priority Definition

Risks and Contingencies

Testing Metrics

Testing Environments

Test Deliverables and Artifacts

Review Questions

Q 1: Describe the ‘valley of despair’ and what are some tools that can reduce its impact?

Q 2: List some of the more important pros and cons of a Waterfall vs. Agile approach.

Exercise: Project Charter

Exercise #1: Based on your current initiatives, identify information that your Project Charter requires and is missing in the

Architecture Roadmap, Transition Plan and Business Case.

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Service 4.5: Execute Change

The focus of this service is to execute the implementation

plan and deploy the transitioned capability into production.

If the logical and physical architecture were correctly

performed, the execution of the change will proceed as

planned. While the project manager and the project team

take the lead, the architect plays a valuable role in

monitoring that the quality of the execution will successfully

transition the capability to achieve the desired business

outcome.

Trigger for This Service: Cutover

Preparation

Work enters into Phase Gate 2 through two sources:

1. Transition Architecture for a Business Strategy

2. Changes to an existing capability that does not

require an architectural change. Capability

performance can be improved to target state by

design changes only.

The checklist provided in the table below helps the

practitioner identify if the previous process has provided

sufficient information to ensure that Phase gate G2 to G3

can be effectively executed.

As systems get ready for deployment, communication to

the entire organization is prepared and training programs

are about to start, the capability transition team is about to

take their implementation into the enterprise and one

needs to be absolutely certain that nothing is forgotten! In

order to support this activity, this section provides three

checklists: 1) System Readiness, 2) Organization Readiness

and 3) People Readiness; these are found in the following

tables.

Business Strategy ID: __________________

Table 11: System Readiness Checklist

No Condition G Y R Remark

System Readiness

1.1 All test cases for user acceptance have been tested and approved, any

business workarounds and exceptions have been signed-off

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No Condition G Y R Remark

1.2 User and system security has been explicitly tested – for virtual, cluster

and load balanced environments

1.3 Basic penetration testing and vulnerability assessments have been

conducted on the production infrastructure

1.4 All architecture requirements have been validated, requirements that

remain outstanding are clearly communicated to the business stakeholder

and their impact on the business goals is understood

1.5 All enterprise capabilities are updated to the new transition state

1.6 Solutions in production are validated against the approved architecture

including standards and principles

1.7 Run books including batch processes, monitoring, back-out plans and

system reset instructions have been documented

1.8 Work flow for helpdesk – infrastructure help, process help and system help

have been defined and communicated

1.9 SLAs with vendors and internal teams are in place

Base Infrastructure

2.1 Base production infrastructure is procured and installed

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No Condition G Y R Remark

2.2 System under full load has been tested and its performance is acceptable.

If not, provisions have been made to add capacity as needed (define

acceptable time and cost here)

2.3 The base infrastructure without systems and data has been tested, this

includes: virtual environments, failover, resource allocation, virtual

desktops etc.

Note – The new production infrastructure install will need to be carefully

managed as there will be two production infrastructures available for a

short period of time. Network traffic and data conflicts have been

considered to prevent current production system to malfunction

2.4 The disaster recovery site infrastructure readiness plan is ready

System Install

3.1 The system install sequence plan has been finalized and tested in User

Acceptance Testing

3.2 Data conversion sequence plan has been established and tested in User

Acceptance Testing

3.3 Data conversion validation reports have been developed and agreed to by

the system owner

3.4 Resources for manual data conversion are in place if required

Business Strategy ID: __________________

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Table 12: Organization Readiness Checklist

No Condition G Y R Remark

1.1 The launch strategy has been defined, agreed upon by all stakeholders and

communicated to affected stakeholders

1.2 All training content is developed in appropriate format for delivery

1.3 Training plans are developed according to the launch strategy

1.4 All pre-training content has been developed and sent to trainees

1.5 All trainers have been trained and examinations have been scheduled

1.6 All communication content such as banners, videos, public content, public FAQ

have been developed

1.7 If required – information and/or help for the user has been provisioned where

a user can bring their work and an expert will be available to help them

1.8 Training dates have been provisioned along with back-up and restore after

each class. Restore time and restore volumes will be carefully monitored

1.9 Process to add new people, remove others, change security and permissions

been established and communicated

1.10 Security audits have been completed and security breach scenarios and

response has been established

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No Condition G Y R Remark

1.11 Rollback Plan – in the event that the old capability had to be restored, the roll

back plan been properly defined and communicated to back out

1.12 All required staff for cut-over have been provisioned and are available onsite

or available on short notice (SLA), Note – ensure all contact information is

known and up to date

1.13 Establish cut-over window start and end times. During the cut-over period, all

affected systems are under the control of the project team and managed by

the cut-over Command Chief

1.14 The Plan to sunset legacy systems including data backup and restore are in

place

Data And Information Considerations

2.1 Circumstances that require all batch processes to be run prior to any cut-over

start have been identified and planned for

2.2 Roll call, assigned posts and established command post with the Command

Chief are in place. (Changes to any part of the plan will require clearance from

the Command Chief)

2.3 Users are appropriately Locked out – users may have to be locked out to

ensure full volume backup to 100% restore – and complete volume backup to

enable full restore is enabled

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No Condition G Y R Remark

2.4 All systems including integration and monitoring are stopped. Systems at

disaster recovery are also appropriately stopped

2.5 Databases, install systems, install integration programs, clear batch logs,

clear test ids are all performed for the cut-over

2.6 Data conversion is performed

2.7 Validation reports are run

2.8 System owner signatures are in place

2.9 System back-ups are in place and in a separate volume as needed

2.10 Exceptions that cannot be resolved before the cut-over are appropriately

escalated to the Command Chief

2.11 User IDs and Passwords have been distributed

2.12 When appropriate, unlock all users to enable access

2.13 Transition to helpdesk – both for process and system support

2.14 Provision additional resources for the first transaction, first batch process –

daily and weekly, volume print runs

Recovery, Sunset and Performance

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No Condition G Y R Remark

3.1 Get Disaster Recovery site ready and synchronize all systems (during this

time there may not be any DR site)

3.2 Start the legacy system sunset plan, provision recovered infrastructure for

Disaster Recovery where possible

3.3 Work with capability owner to analyze capability performance

Business Strategy ID: __________________

Table 13: People Readiness

No Condition G Y R Remark

Customer

1.1 Customers that are affected by this change have the communication document.

This document has been developed and approved for communication and

released to the customer

1.2 The help desk has been informed of the communication to customers and a

FAQ has been provided to them

1.3 Customers that access the system have any new updated information such as

the new URL, application and/or login credentials. The customer training plan

is also in place

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No Condition G Y R Remark

Operating Staff – Business SME

2.1 As part of the Organization Change Management – training has been

completed, authorized people has access to the system

2.2 Process to distribute user id and passwords are established

2.3 Staff help sessions and workshops are planned

IT Support Staff

3.1 Run books are reviewed

Video 31: The Benefits of a Checklist

Execute Change Service Described

Given the Transition Plan and Business Case, this service

will build and manage a multi-discipline team to transition

the capability to perform at a target level on-time and on-

budget.

Transition Leadership Team Member Roles

The following 4 entities play key roles for this service:

Capability Sponsor: Provides overall leadership

and help facilitate the impact of change on affected

stakeholders. The Capability Sponsor will have the

ultimate accountability to deliver the business

outcomes through exploitation of the transitioned

capability.

Architect: Assumes the RESPONSIBILITY that the

transitioned capability will deliver the intended

business outcomes as long as the capability is

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exploited as outlined in the architecture roadmap

and has the responsibility to continuously work with

capability users.

Project Manager: Builds a team of multi-disciplined

professionals to execute the architecture roadmap

on-time and on-budget.

Steering Committee: Guides the capability sponsor

and help facilitate the inevitable and tough choices

as the project team executes the architecture

roadmap.

Summary of Deliverables

Project Charter

Logical Architecture

Physical Architecture

SDLC Deliverables: Business Requirements,

Functional and Technical Specification, Systems

Support Manuals and Run Books

Strategies such as data conversion, OCM, cutover

and so on

Quality Assurance

Technical and Business Change

Help refresh the checklist as part of continuous

improvement and learning

Review Questions

Q 1: In your opinion, what are the top three reasons why IT Project fail to meet enterprise expectation? Has the Capability

Transition Governance Service addressed this deficiency?

Q 2: What are the root causes for inherent conflict between the PM and Architect’s role, and what strategies can be deployed

to manage this conflict?

Exercise: Execute Change Governance Service

Exercise #1: Consider a project that you were part of in the past, complete the Quality Assurance Report and discuss if the

findings would result in different actions and their impact on the outcome.

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Service 4.6: Support and Maintain

Enterprise Capabilities

Now that the transitioned capability is deployed into the

production environment, we can now exploit the capability

for the value we had targeted and realize the expected

business outcome. Over time and changes to the

organization’s internal and external environment, the

capability will need adjustments. A large part of this work

can be handled in the operations domain but some will have

greater complexity. For these types of changes, we will

need to implement continuous planning to prioritize the

work that yields the best value to the organization.

Trigger for this Service

After the transitioned capability is deployed into production,

architecture work is triggered to improve the performance

of the capability and help realize the intended business

outcome.

Input

With minimal changes to the technology component of the

capability, help improve the capability performance and

secondly consider elements of people, process and

technology aspects of the change. The scope is triaged

according to rules defined under the governance Decision

for “TR1” in

Figure 29: Leverage Enterprise Capabilities.

Output

The Capability performs at the desired level as measured

through the Capability performance indicators and results in

the desired business outcome through the enterprise

performance scorecard.

Business Value

During this phase, both transformation and operations staff

work together to extract value from the capability.

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Figure 29: Leverage Enterprise Capabilities

Video 32: Value Management – An underperformed Activity

Engagement: Prior to starting this service, the transitioned

capability is deployed into production and has cleared the

initial “settling” state. Each trigger to change the capability

is assessed using the following TR1 triage process:

• Game Changer – Analyzed using Opportunities and

Threats aspect of the SWOT Analysis. The capability

transition work starts at the CBvd™ Phase Gate G0.

• Improvement – This opportunity is analyzed with

the Strengths and Weakness perspective of SWOT

analysis and transition work starts at CBvd™ Phase

Gate G1.

• Continuous – these opportunities can be realized

by changing system design along with changes to

the process and people skills; work starts at the

CBvd™ G2 Phase Gate.

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• Operational – these opportunities can be realized

by changing process and people skills by making

changes to configurations of information

management systems. Work can be performed in

the operations environment and starts at CBvd™

Phase Gate G3.

Link to Overall Capability Based Value

Delivery

Figure 29: Leverage Enterprise Capabilities defines how this

service is aligned to the overall business transformation

value chain. This is the longest phase of any enterprise

capability. During this phase, using Lean Six Sigma

methodology, the capability is continuously improved and

incremental value is extracted from the enterprise

resources. Primary activities include: 1) the transition to

System Support, 2) management leverage of the capability,

3) monitor its performance and resulting enterprise value

and 4) benchmark the performance of the capability against

industry as well as internal engineering expectations.

Tools and Techniques Applied

• IT Service Management: Review fundamentals of

ITILv3 and define touch-point between ITIL and the

Capability Based Value Delivery Process.

• Learning Organization and Architecture

Requirements: How opportunities to improve the

performance of current capabilities are captured,

analyzed and planned as well as what new

capabilities should be brought in and what current

capabilities should be sunset.

• Continuous Planning: Addresses how opportunities

for improvement are identified, planned and

dispatched for execution throughout the year as

oppose to once an economic cycle.

• Business Transformation Process Maturity:

Addresses how to measure Business Transformation

and supporting capability maturity in real-time

through a natural process. Unlike the CMMI

approach which measures process repeatability, this

process directly measures maturity in the ability to

generate tangible value.

• Business Transformation Capability

Performance: Addresses how to define Business

Transformation Capability performance and link

these performance indicators to enterprise goals,

profit margins, market share and value in the

pipeline.

• Value Realization and Continuous

Improvement: Typically, organizations make

extensive use of project steering committees to

govern the project implementation. The purpose of

this section is to highlight the role and mandate of

various stakeholders in steering committees as well

as governance of all implementation contracts as

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they were defined in the Architecture Roadmap or in the architecture change management perspective.

Figure 30: Value Realization Integrated Model

The IT Service Management strategy approach and portfolio of services is defined during the CBvd™ Phase Gate G0 to G1.

Capacity, Availability, Continuity and SLAs are defined during the architecture roadmap. All other ITSM services are invoked

during operations management in Phase Gate G3 to G4. During G0 to G2 Phases, the work is typically led by the Enterprise

Architect and ITSM professionals are key stakeholders. Conversely, during G3 to G4, works is led by ITSM professionals and

Enterprise Architects are considered key stakeholders.

ITSM

TOGAF®

ValIT

Business Operations

Nurture and Exploit Enterprise Capabilities

Enterprise Outcomes • Profit Margins • Market Share • Value in the Pipeline

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Figure 31: Business Transformation and ITILv3

Learning Organization and

Architecture Requirements

The learning organization concept has two perspectives:

1. How to capture, analyze, act upon and measure the

results from potential improvement opportunities

identified by current Experts, Customers, Partners

and/or Senior Management. The focus of these

opportunities is on the delivery of the Enterprise’s

core business; an example of this capability is the

ability to admit a patient in the emergency ward.

2. The second perspective focuses on the capabilities

that help change the organization as its operating

climate changes. An example of such capability is

the ability to plan and transition a capability to a

new performance level both predictably and

effectively.

To implement a Learning Organization, an organization

needs to define and communicate their current capabilities

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and enable their staff, customer and partners to identify

potential opportunities. See

Figure 32: A Typical Ideation Interface, a Continuous

Improvement Analyst reviews these opportunities, identifies

the affected capabilities and quantifies the impact in terms

of defined measures. The idea then travels through

processes of ideation, architecture/design, implementation

and value realization. Throughout the life of the idea, all

stakeholders have full visibility and transparency to the

status of the idea.

The Ideation Process can be a part of an intranet portal that

identifies opportunities for improvement. Any member who

has access to the portal can help further refine the idea.

The analyst assigned to the business area then maps the

idea to an enterprise capability and quantifies the value in

the pipeline. The Continuous Planning process then helps

transition the idea into tangible outputs.

Figure 32: A Typical Ideation Interface

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Architecture Requirements are the opportunities to improve the performance of the capability. These requirements are

continuously elicited and managed as per TOGAF® Architecture Development Methods.

Video 33: Maturity ≠ Performance

Continuous Planning

The concept of Continuous Planning embodies Ideation and the Continuous transition of ideas into tangible products and

services.

Table 14: Continuous vs. Annual Planning summarizes the differences and similarities between Continuous Planning and a

once-annual planning cycle.

Table 14: Continuous vs. Annual Planning

No. CBvd™ Phase Activity Continuous Planning Annual

Planning

Value

1 Define Strategic Intent Refine every year, planning horizon typically is 5

to 10 years (depending on rate of change in the

ecosystem)

Sets and communicates

direction

2 Review Enterprise Capabilities,

measures and performance targets

and business goals

Once a year and establish improvement targets

and establish Investment Targets

Focus of the plan

becomes benefits to be

realized not spending

limits to be imposed

3 Solicit ideas to achieve target

improvements in capabilities

Continuously – solicit and

evaluate ideas

Once a year Engaged staff

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No. CBvd™ Phase Activity Continuous Planning Annual

Planning

Value

4 Evaluate Ideas and Generate

portfolio of Projects /Programs

Continuously, review

capabilities/ architecture

requirements in the

repository

Once per year Work load on Business

Transformation service

balanced

5 Plan portfolio of Projects and

release incrementally

Release project funding

according to phase gates

and overall investment plan

Release resources

for entire project

once

Phase gate based

resources allocation

6 Evaluate Capability Performance

and Business Goals

Continuously Continuously One supports corrective

action immediately

7 Nurture and Exploit Capabilities both methods support this, CP is better position

because the Learning Organization concepts

CP is in better position

8 Shift focus from investment in

systems to investment in

capabilities

Both can support this

Continuous Planning Events

The following steps are performed to implement Continuous Planning:

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Figure 33: Continuous Planning Process

Step 1: Changes to an existing capability is triggered

through any of three events:

1. A subject matter expert can identify an improvement

as they interact with the current capability

2. Any member of staff, customer or partner can

identify an improvement opportunity

3. Any member of the organization can observe a

discontinuity in the market place and identify a

potential opportunity. These can be inspired from

activities such as monitoring customers, a partner,

or regulator behaviour over social media tools.

Using social media tools, any member can provide

additional insight and/perspective on the opportunity.

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Step 2: An advisor assigned to the Line of Business and

capability owner will review the opportunity, classify its

impact and scope and do one of three things: 1) issue a

work product starting at an appropriate phase gate or 2)

assign it to the impacted capability as an architecture

requirement or 3) park it until there is a change in its value

proposition.

Step 3: Using a real-time dashboard of: the status of all

work products, business impact and required resources;

new work products are released for execution. The scope of

work is to develop sufficient information to satisfy decisions

at the next phase gate.

Step 4: The work product is completed, the repository is

updated and the business decision for release to the next

phase gate is activated.

Business Transformation Process

Maturity

Capability maturity is typically measured through a specific

application of the Capability Maturity Model Integrated

(CMMI) framework developed by the Software Engineering

Institute. The essence of this model is to ensure there are

processes and controls to reduce process variability and

provide guidance for improvement. The maturity measure is

a proxy of the variance of the outputs of the process, less

variance implies a higher quality of output produced.

Maturity is often measured as an audit activity for a point in

time.

Within the CBvd™ process, we can continuously measure

the maturity of the business transformation process and

provide guidance on how to execute an improvement action

plan. Here is a brief description of how this is performed:

Before any work product can clear a phase gate, we provide

a quality checklist from two stakeholders` points of view.

Firstly, ensure the decision maker understands and has the

information necessary to make the decision and secondly,

downstream stakeholders who will act upon the decision

must be satisfied with the quality and detail of the

information provided to do the work in their domain with

their skill sets. The capability is measured in terms of

stakeholder satisfaction of the quality of information at

each phase gate.

The maturity assessment data collection process is

continuous at each phase gate and a work product decision

can be analyzed at aggregate levels as well as for one work

product or group of work products. The maturity in this

framework is not an average of all the phases, but the

weakest link in the chain. Furthermore, the satisfaction

index – or maturity measure – provides guidance to which

phase should be further targeted and what actions to take.

Business Transformation Capability

Performance Measures

The Business Transformation Capability consists of a

number of sub capabilities which include:

Continuous Planning

Strategic Planning

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Enterprise Architecture

Program Management

Portfolio Management

Innovation Management

System Development Life Cycle and Quality

Assurance

Value Realization

Management of Practices

Many of these capabilities are defined by different

disciplines, professions and frameworks. To make the

Business Transformation capability practical, the Business

Transformation capability practitioner must respect the

domain of each capability and needs to be inclusive.

While the performance of each sub capability is measured

separately, this section defines how to measure the overall

performance of the Business Transformation Capability.

These measures resonate with all levels in the enterprise.

Key Business Transformation Capability performance

indicators are:

Ideas: number of ideas and feedback/employee

[measures the employee engagement]

Cost and Time to Plan: Cost is measured in hours

of effort spent by all keys stakeholders in directly

contributing to the planning activity and time is

measured in days as elapsed time from idea to

actionable work product definition.

Plan Efficiency: Percentage of work products

completed on-time, on-budget and meet the needs

of the stakeholders.

Plan Effectiveness: Percentage of transitioned

capabilities that perform at target expectations.

Stakeholder Satisfaction: Percentage of work

products that meet the quality criteria within each

phase gate. This measure is also used as a measure

of Business Transformation capability maturity.

Accountability to optimize these measures must be within

one group as it is too easy and futile to optimize one

variable at the expense of another. For example, it will be

too simple to reduce the cost and time to plan which results

in poorly planned work products with lower plan efficiency.

Value Realization and Continuous

Improvement

After a transitioned capability is deployed into production

and initial minor issues that often result from a change are

resolved, it is time for the capability to start performing at

the expected level. The role of the Business Transformation

Professional during this phase consists of:

Capability Performance: Measure and report the

capability performance to the capability owner as

defined through measures and metrics. If the

capability is not performing at the required level,

engage all affected stakeholders and develop a

continuous improvement action plan. Prioritize the

action plan in terms of education and training,

Chapter 4: Business Transformation Services

161

process change, minor automation tweaks and

major automation changes.

Impact on Business Goals: determine if the

capability performance has sufficient impact on the

business goals. If not, then analyze the initial

hypothesis from the Business Strategy Phase that

defines the direction for strategy implementation.

Review industry literature and consult experts in the

field before rejecting the initial hypotheses.

Business Transformation Professionals acquire deep

expertise in enterprise capabilities and thereby have

influence on the business goals; they often become an

integral part of the Merger and Acquisition (M&A) teams. As

they have both the competency and capacity to help the

M&A team identify the right capabilities in potential

partnering organizations and assess the impact of such

capabilities on the organization’s goals.

Post Implementation and Continuous

Planning Summary

This chapter described how the Business Transformation

capability can help nurture and exploit the current

enterprise capabilities and how to continuously plan for

their improvement including retirement and acquisition of

capabilities.

The chapter also briefly described how IT Service

Management, a Learning Organization, Continuous planning

and Value Realization practices interact to nurture and

exploit the Enterprise Capabilities.

Chapter 4: Business Transformation Services

162

Review Questions

Q 1: How do the concepts of a Learning Organization support the Value Realization Model proposed in the Business

Transformation Capability?

Q 2: How can you work to minimize the inherent conflict between IT Service Management professionals and Enterprise

Architects?

Q 3: How can you engage Capability Owners to measure the Capability Performance when the Transparency and Accountability

principle may not be in their best interest?

Q 4: In absence of tangible measures for Capability Performance Metrics, how can you implement the Value Realization

practice?

Q 5: What competencies are required and need further development for a Business Transformation professional to be part of

the M&A Team?

Exercises

Exercise # 1: Consider a recently implemented major program/project in your organization, can you:

Identify the Enterprise Capabilities affected and their Measures and Metrics

Determine the before and after metrics: actual and expected

Engage with the capability owner to help them exploit the capability to an optimum level

Relate the capability performance to business goals of the program

Identify lessons learnt and communicate them to key stakeholders in your organization

Exercise # 2: Identify a major Enterprise Capability (major implies it has a high impact on your organization's key

performance indicators) and identify all improvements that can be made to this capability and classify these improvements into

three categories: 1) Cost Reduction, 2) Revenue Growth and 3) Staff Morale. If you share your findings with the capability

owner, what will be his/her reaction to your findings?

Exercise # 3: What aspect of the Value Management sub-capability is most difficult to execute in your organization and what

can you do to help remove these obstacles?

Chapter 4: Business Transformation Services

163

Summary of Business Transformation Services

This chapter describes six specific services that are required to develop the Business Transformation Capability. The motivation

for this chapter was to discuss what must be done, why each service is important and how to define and execute each service.

Business Transformation Services discussed are:

1. Strategic Intent and Business Strategy

2. Enterprise IT Capabilities

3. Enterprise Line of Business Capabilities

4. Transition Plan and Portfolio of Investment for Change

5. Execute Change

6. Support and Maintain Enterprise Capabilities

Test Your Learning

For your organization, add key stakeholders and complete the RACI Model below and then answer the listed questions below:

Table 15: RACI Matrix of Business Transformation Services

Services

Stake-

holders

Str

ate

gic

In

ten

t an

d

Bu

sin

ess

Str

ate

gy

En

terp

ris

e I

T

Cap

ab

ilities

En

terp

ris

e L

ine

of B

usin

ess

Cap

ab

ilities

Tran

sitio

n P

lan

an

d P

ortfo

lio

of I

nvestm

en

t

for C

han

ge

Execu

te

Ch

an

ge

Su

pp

ort a

nd

Main

tain

En

terp

ris

e

Cap

ab

ilities

Str

ate

gic

In

ten

t an

d

Bu

sin

ess

Str

ate

gy

Strategic

Planner

Enterprise

Architect

R Open CA L1

or 2

Chapter 4: Business Transformation Services

164

Services

Stake-

holders

Str

ate

gic

In

ten

t an

d

Bu

sin

ess

Str

ate

gy

En

terp

ris

e I

T

Cap

ab

ilities

En

terp

ris

e L

ine

of B

usin

ess

Cap

ab

ilities

Tran

sitio

n P

lan

an

d P

ortfo

lio

of I

nvestm

en

t

for C

han

ge

Execu

te

Ch

an

ge

Su

pp

ort a

nd

Main

tain

En

terp

ris

e

Cap

ab

ilities

Str

ate

gic

In

ten

t an

d

Bu

sin

ess

Str

ate

gy

Project

Manager

…..

Question 1: For each required skill, estimate the demand and supply of this skill in your organization and develop a strategic

resource management plan. Communicate this plan with your CIO and Leader of Human Resources.

Chapter 4: Business Transformation Services

165

Chapter 4 References

1. Advanced Applications of TOGAF®; Course material developed by QRS, http://qrs3e.com/qrs-capabilities/competency-

development/togaf/

2. TOGAF® 9.1 Specification, The Open Group: http://www.opengroup.org/togaf/

Chapter 5: Industrialize the Business Transformation Capability

166

Chapter 5: Industrialize the Business Transformation

Capability

“Industrialization based on machinery, already referred to as a characteristic of our age, is but one aspect

of the revolution that is being wrought by technology.”

Emily Greene Balch

Abstract

Building on the services performed throughout the capability life cycle, in this

chapter we discuss how to make Business Transformation (BT) repeatable

and deliver consistent results; this is known as industrialization.

An organization can industrialize any Enterprise capability that needs to

repeatedly perform to expectations. The quality and consistency of results

will depend on the effectiveness of the capability. A mediocre capability can

be industrialized and the results will also be mediocre. Therefore,

industrialization leads to efficiency and will not improve effectiveness.

In an ever-changing environment, the Business Transformation Capability

can be strategic to an organization especially when this capability provides a

competitive advantage over others. In our endeavour to industrialize, we

will explore the major phase gate activities, assess Business Transformation

readiness of the organization, determine the right performance measures

and governance required and determine how we can industrialize our

repository of content to achieve results faster and with fewer resources.

Key Chapter Sections

Industrialization… 167

Business Transformation Skills… 168

Major Phase Gate Activities… 173

Assess Business Transformation

Readiness… 188

Performance Measures, Processes and

Governance…204

Performance Measures of the Business

Transformation Capability… 205

Building the Business Transformation

Capability… 211

Governance and Decision Points… 212

Industrialize the Repository… 215

Tools to Industrialize the Business

Transformation Capability… 216

Chapter 5: Industrialize the Business Transformation Capability

167

Industrialization

Being able to execute transformation one-time according to expectations is not enough, transformation needs to be executed

continuously and achieve expected outcomes reliably; this is industrialization.

We can be effective in executing Business Transformation but to remain competitive and relevant, we need a system in place

to execute transformation continuously and efficiently. This chapter will discuss how we can implement such as system and

the concerns that need to be addressed.

The Business Transformation Capability

Organizations are structured to run their business operations. When there is a disruption in the industry, marketplace or an

internal shift, the organization will need to transform itself to meet its new needs. Should the organization be unable to

transform in the required timeline, it may cease to exist.

For this reason, every organization needs to have a Business Transformation Capability, especially if they are in an

environment where change is ubiquitous.

For this capability, we need the ability to make changes in the organization by implementing its strategic intent through

business strategies, aligning portfolios of investment and initiatives to those strategies, executing projects that implement the

necessary changes and continuous measurement of the performance against the expected results.

This process can be seen through the Capability Based Value Delivery Life Cycle as shown in the following figure.

Chapter 5: Industrialize the Business Transformation Capability

168

Capability Based Value Delivery [CBvd™]

Business Case Build the Capability

Support & Exploit the Capabilities

G0

Stra

tegi

c In

ten

t [m

issi

on

, vis

ion

, va

lues

]

G1 G2

G3

G4

Obstacles preventing to Migrate to Target Level (Architecture Requirements)

Val

ue

Rea

lized

an

d C

apab

ility

R

etir

emen

t P

lan

Cap

abili

ties

Po

rtfo

lio (t

arge

t

cap

abili

ties

in p

rod

uct

ion

)

Inve

stm

ent

Po

rtfo

lio (i

nve

stm

ent

req

uir

ed t

o t

ran

siti

on

th

e C

apab

iliti

es)

Ente

rpri

se S

trat

egy

[W

ith

Cu

rren

t a

nd

Ta

rget

Sta

te o

f C

ap

ab

iliti

es]

ITSM Service Ticket

Define Business Executive and Directive Capabilities

[1..n]

Define Supporting IT Executive and Directive

Capabilities [1..1]

Define Ideal/Industry Roadmap

Adapt Ideal Roadmap to Enterprise Constraints

Define Migration Plan and Business Case

Implement Transition Plan – Detail Capability Roadmap, Plan and Build Capabilities

G1 Quality Checklist

G2 Quality Checklist

G3 Quality Checklist

Enterprise Strategy Map

Business Strategies

G4 Quality Checklist

Manage, Exploit & Retire Capabilities

Figure 34: The Capability Based Value Delivery (CBvd™) Life Cycle

Each phase of the life cycle can be summarized as follows:

1. G0-G1 – Strategic: Establishes the identity and

defines the executive capabilities of the organization.

2. G1-G2 – Strategy: Defines the business strategies

that will be pursued by the lines of businesses of the

organization to improve the directive capabilities.

3. G2-G3 – Solution: From the available options, a

solution is chosen and implemented; at the

completion of this phase the solution is not in the

production environment.

4. G3-G4 – Value Delivery: The capability

performance is measured continuously against the

expected results.

For more information about this life cycle, please see

Chapter 3.

Video 34: Industrialization and Automation

Business Transformation Skills

A number of skills are required across the capability life

cycle and also involve a number of disciplines. Similar to

how an organization structures itself to run its operations,

we also need the right processes, people and technology.

For our people resources, we need them to have the right

Chapter 5: Industrialize the Business Transformation Capability

169

mix of skills and knowledge to do their work and provide

the needed information to make key business decisions.

To support the greater transformation capability, we need

to have a number of disciplines involved, understand their

role throughout the capability and also be aware of the

skills and knowledge needed. For a measure of quality, we

may look to industry certification to give us the assurance

that the role can be well executed. Some of the disciplines

involved with business transformation include the following:

Strategic Planning: Conveys and aligns the

strategic direction of the organization and assures

that value delivery is meeting the expected results.

There is no consensus for industry certification for

this role.

Enterprise Architecture: Involved with all aspects

of the capability life cycle but leads the development

of architecture that defines the problem to solve.

This group also contains architects with subject

matter expertise (i.e. domain) and solution

architects. The Open CA certification offers three

levels of architecture competency that requires all

those certified to demonstrate the value of

architecture work products, defense of architecture

skills and experience to a panel of peers.

Portfolio Management: Manages the investment

portfolios available to fund the necessary changes

needed to support business transformation. Those

with PMP certification generally perform this role but

it should be clear that portfolio management

requires a different set of skills to execute than

project management.

Project Management: PMP certification from PMI®

has become a requirement for many project

management professionals who are responsible for

the planning and delivery of projects that execute

the changes needed for business transformation.

Organization Change Management: This

discipline works with those impacted by change to

minimize the impact of the change. There is no

formally recognized industry certification for this set

of skills.

System Development Life Cycle: Those involved

with the System Development Life Cycle include

business analysts, quality assurance and others. For

business analysts, IIBA offers two levels of

certification including CCBA® and CBAP®.

IT Service Management: Manages the IT

infrastructure of the organization that support

business processes. ITIL certification is widely

regarded in the industry and provides assurance that

there is an understanding of IT Service

Management.

Enterprise Capabilities Information Repository:

Information management’s role is to make

information available to operate business processes

and make decisions. While this group may not

understand the quality of information needed, they

Chapter 5: Industrialize the Business Transformation Capability

170

provide insight into how information is structured for

retrieval and organization.

Governance and Risk Management: Decision

makers need to be clearly identified as well as the

parameters for risk management for decision

making. Accountability for decisions needs to be

identified and responsibility for information quality

also needs to be explicit.

Capability Exploitation, Nurturing and Value

Management: Once in production, the transformed

capability needs to be continuously monitored

against expectations. When expectations are not

met, those accountable for the capability need to

champion the necessary change.

As the above description of disciplines show, certification

can assure of a particular skillset but all disciplines need to

be aligned and orientated in order to work towards common

goals and objectives. We need to be able to describe the

ability for each discipline to complete an activity for

business transformation; this is described as competency.

Video 35: Know When to Lead, Support and

Contribute

The Need for Competency for

Industrialization

Competency is a term used to describe the skill, knowledge

and respective level of maturity required to complete an

activity. As an example, an Open CA Level 1 Architect

would not have the necessary competency – due in part to

the deep Executive Communication skills required – to link

executive capabilities to business outcomes that are

performed in the G0-G1 Strategic phase of the capability

life cycle. Role competency is a collection of the needed

skills and knowledge required to execute a role effectively.

When competency is high, it is expected that the work

performed by the role can be done more efficiently, that is

in less time.

In defining competency, we can be assured that certain

activities can be completed within a given time. As an

example, an Enterprise Architect should be able to

complete a Contextual Architecture for a supporting

capability in 20 to 40 hours. An individual with a high level

of competency and validated through certification – such as

Open CA level 2 – and available assessments will be able to

complete such an activity closer to 20 hours whereas a

resource with the needed skills and knowledge but lacking

in demonstration would be able to complete the activity in

40 hours. If the activity cannot be completed in 40 hours,

the individual does not have the competency to perform the

role.

Competency can be determined as a measure of maturing

of the needed skill and knowledge areas. From the

previous example, a skill and knowledge area for the

competency of Enterprise Architecture could be

management and peer communication and knowledge of

systems thinking. In addition to other skill and knowledge

areas, a score out of 100 can be assessed for each where 0

Chapter 5: Industrialize the Business Transformation Capability

171

would indicate the minimum level required and 100 would

indicate industry leading. If the individual does not have

the skill or knowledge, then they would not have the

required competency. Competency can therefore be

calculated as the average or weighted score of all the

required skill and knowledge areas. Thus a competency

rating of 100 would indicate that the resource should be

able to complete the activity at the minimal range and a

score of 0 would indicate the activity would be completed at

the maximum range.

When the organization or the greater team involved with

Business Transformation has a good measure of

competency, there will be greater confidence that work can

be completed according to expectations and with mature

competency, the work can be done more efficiently in less

time.

Available Sources to Assess

Competency

There are a number of sources already available to define

roles and the required competency through skill and

knowledge areas. Organizations have internal resources

that specify skill, knowledge and required maturity required

for the roles in the organization; this information can be

made available through their Human Resources

department. In addition, there are a number of industry

sources to help define the competency requirements for

each role.

The TOGAF® framework also identifies a number of skills

and level of competency required in Part VII: Architecture

Capability Framework. As an example, one is shown in the

following figure for Enterprise Architecture skills.

Table 16: Generic Skills and required maturity by Competency12

Roles Arch

itectu

re

Board

Mem

ber

Arch

itectu

re

Sp

on

so

r

EA

Man

ag

er

EA

Tech

no

log

y

EA

Data

EA

Ap

plic

atio

ns

EA

Bu

sin

ess

Pro

gram

/ P

ro

ject

Man

ag

er

IT

Desig

ner

Leadership 4 4 4 3 3 3 3 4 1

Teamwork 3 3 4 4 4 4 4 4 2

12

Reference from TOGAF® Version 9 Specification, Chapter 52

Chapter 5: Industrialize the Business Transformation Capability

172

Roles Arch

itectu

re

Board

Mem

ber

Arch

itectu

re

Sp

on

so

r

EA

Man

ag

er

EA

Tech

no

log

y

EA

Data

EA

Ap

plic

atio

ns

EA

Bu

sin

ess

Pro

gram

/ P

ro

ject

Man

ag

er

IT

Desig

ner

Inter-personal 4 4 4 4 4 4 4 4 2

Oral Communications 3 3 4 4 4 4 4 4 2

Written Communications 3 3 4 4 4 4 4 3 3

Logical Analysis 2 2 4 4 4 4 4 3 3

Stakeholder Management 4 3 4 3 3 3 3 4 2

Risk Management 3 3 4 3 3 3 3 4 1

Where:

1 Background: Not a required skill though should

be able to define and manage skill if required.

2 Awareness: Understands the background, issues,

and implications sufficiently to be able to understand

how to proceed further and advise client accordingly.

3 Knowledge: Detailed knowledge of subject area

and capable of providing professional advice and

guidance. Ability to integrate capability into

architecture design.

4 Expert: Extensive and substantial practical

experience and applied knowledge on the subject.

While a number of sources are available to articulate the

competency required for a role, we must also follow

through in the use of this information to define targets (and

their variances) for how much effort and time is required to

complete business transformation activities. With

meaningful competency, we can then have greater

assurance that activities needed to complete the business

transformation can be done within expectations.

Additionally, we will be able to explicitly define the people

resources needed to complete the job. This enables our

ability to perform consistently and reproduce the expected

outcomes; a key enabler of industrialization.

Chapter 5: Industrialize the Business Transformation Capability

173

Major Phase Gate Activities

The following table summarizes the major phase gate

activities throughout the capability life cycle as shown in

Figure 34: The Capability Based Value Delivery (CBvd™)

Life Cycle. For each activity, the tables list:

Artifacts

Deliverables and Outcomes

The Approver(s) of the outputs

The Consumer(s) of the outputs

The value of the deliverables

The improvements made to the capability

understanding

This list should be used as a guide to help the reader

understand the activities that are performed in maturing a

capability.

Table 17: Phase Gate G0-G1 - Establish Strategy and Business Outcomes

Major Phase Gate Activity

Establish Strategy and Business Outcomes

(G0-G1)

Artifacts • Value Chain

• Enterprise Capabilities

• Performance Metrics – current and target

• Business Outcomes

• Capabilities and Outcome Map

Deliverables and

Outcomes

• Enterprise capabilities and their classification –

• Business strategy and linkage to affected capabilities, target performance and business

outcomes

Documents the Decision

Approver • SMT, SVP and Strategy Pillar Leaders

Consumer • Planning, Business and IT Operations

Value of the

Deliverables

• Clearly articulates the vision for the strategy, capabilities affected, and sets goals for level of

performance

• Provides guiding principles to help the consumers make decisions. For example, we may have

to decide when how much is reasonable to spend to achieve certain capability performance level

Chapter 5: Industrialize the Business Transformation Capability

174

Improvements

over Current Process

• Principles and guidelines from senior staff to help make decisions and trade-offs.

• Clear performance measures that helps us better define the right work to perform without the

uncertainty of whether or not it will meet expectations

• Helps us better prioritize where to put our time

Table 18: Phase Gate G1-G2 - Develop Capability Transition Plan and Business Case

Major Phase Gate

Activity

Develop Capability Transition Plan and Business Case (G1-G2)

Artifacts • Contextual and Conceptual Architecture at the industry and Org Level

• Transition Plan

• Financial and Enterprise Value Realization Model

Deliverables and Outcomes

• Ideal roadmap to build/enhance capabilities, compared to what is possible

• Transition Plan - projects to execute

• Business Case – Balances the investment against the benefits

Documents the Decision

Approver • Chief Architect/CIO /Strategy Owner

• Architecture Review Board

• Investment Portfolio Management Committee

Consumer • PMO

• Project Delivery Teams

Value of the

Deliverables

• Learn how others within and outside of our industry have solved similar problems, leveraging

solutions that make sense for us based on our constraints

• Proves whether or not it makes sense to continue with an execution project

• Provides the execution team with answers to the questions that enable them to move forward

with execution

Improvements

over Current Process

• Helps us plan to the right level of detail to make good decisions

• Repeatability of the process, information and Incorporate lesson learned

Chapter 5: Industrialize the Business Transformation Capability

175

Table 19: Phase Gate G2-G3 – Build the Capability (ies)

Major Phase Gate Activity

Build the Capability (ies)

(G2-G3)

Artifacts • Logical and Physical Architecture

Deliverables and

Outcomes

• Design documents

• Products delivery – design, build and test

• Deploy changes

• Close project and transfer transitioned capability to production support

Final Value Products

Approver • Strategy Owner

• CAB – technology and business readiness

Consumer • Business and IT Operations

Value of the Deliverables

• Transitions the capability to the future state required to achieve planned Business Outcomes

Improvements

over Current Process

• Project teams will have more explicitly defined scope, roadmap and, which will improve their

chances to deliver work on time and on budget

• Help manage conflicting business requirements

Table 20: Phase Gate G3-G4 – Support, Maintain and Exploit the Enterprise Capabilities

Major Phase Gate

Activity

Support, Maintain and Exploit the Enterprise Capabilities (G3-G4)

Artifacts • Capability performance Scorecard

• Business Outcomes Scorecard

Chapter 5: Industrialize the Business Transformation Capability

176

Deliverables and

Outcomes

• Monitor Capability Performance and assess Planned vs. Actual benefits

• Exploit the capability (use what has been built)

Measurable Value

Approver • Capability Owner

• SMT/SVP/ Pillar Chain

Consumer • Business Operations

• IT Operations

Value of the Deliverables

• Determines whether or not the expected business benefits are being realized

• Provides input to help us course correct if performance is different than expected

• Continuous process to receive and analyze change requests

Improvements over Current

Process

• The ability to measure and report actual vs. planned performance

• Information to help us learn when we do not achieve expected performance

• Customer centric and efficient approach to analyze change requests

Table 21: Phase Gate G0-G4 – Continuous Planning to Transform the Capabilities

Major Phase Gate Activity

Continuous Planning to Transform the Capabilities

(G0-G4)

Artifacts • Ideas for Improvement

• SIB – Process, Competencies, Information, Data, Application and Infrastructure – Repository

Deliverables and

Outcomes

• Investment Dashboard, including the work plan for each starting Gate and required resources

• Value Statements

• Gantt Chart of Work products

• Steering Decisions

• CBP Performance Measures and Governance

Approver • SMT/SVP/ Pillar Chain

Chapter 5: Industrialize the Business Transformation Capability

177

Consumer • Work products Delivery Teams along all Phase Gates

Value of the

Deliverables

• Work is planned at the capability level instead of at the system level, thereby allowing for a

better understanding of problems and opportunities

• Roadmaps provide the information to plan for resources and technology before it becomes

urgent

• Better understanding of the problems to solve from all points of view

• Objective planning measures give us inputs we need to continuously improve the planning

process

Improvements over Current

Process

• Data will no longer be produced manually and/or ad hoc , increasing data quality

• Better insight into the future to help us anticipate changes in resources and technology required

to meet the demands of the organization

Table 22: Phase Gate G0-G4 – Capability Based Planning Competencies

Major Phase Gate

Activity

Capability Based Planning Competencies

(G0-G4)

Artifacts • IT Competencies and Skills assessment

Deliverables and

Outcomes

• IT Competencies are defined and a plan to further develop them has been documented (and

continuously maintained)

• Supply and Demand of Resources is Balanced

Skilled Workforce

Approver • CIO and IT Leadership

Consumer • IT Division Management

Value of the Deliverables

• Procure Human Resources more strategically

Improvements

over Current Process

• Resources are procured ad hoc today, which leads to delays, increased costs and risks

• We miss opportunities to develop our own staff for strategic positions

Chapter 5: Industrialize the Business Transformation Capability

178

Governance Considerations

For the above activities, the following table shows the services performed and the role of certain disciplines and groups in the

service delivery.

Video 36: The Importance of Roles for Governance

Table 23: Governance Roles to Support Business Transformation

Services

SM

T,

Pilla

r C

hair

s,

SV

P

Co

rp

orate

PM

O

IT P

lan

nin

g

Pro

ject

Man

ag

ers

Pro

ject

Delivery

Team

, N

on

IT

Pro

jects

Delivery

Team

, IT

IT O

perati

on

s

Ap

ps +

In

frastr

uctu

re

Bu

sin

ess O

ps

Establish Strategy and Business Outcomes (G0-G1)

Define Enterprise Capabilities that support the Enterprise Strategic

Intent

A C R I I I R R

Define Enterprise Strategies and establish linkage to affected

Capabilities

A R R C C C C C

Elaborate Business and IT Capabilities A C R C C C C C

Develop Capability Transition Plan and Business Case (G1-G2)

Define ideal roadmap to transition capabilities, and adapt to Org

Constraints

C A R I I I C C

Chapter 5: Industrialize the Business Transformation Capability

179

Services

SM

T,

Pilla

r C

hair

s,

SV

P

Co

rp

orate

PM

O

IT P

lan

nin

g

Pro

ject

Man

ag

ers

Pro

ject

Delivery

Team

, N

on

IT

Pro

jects

Delivery

Team

, IT

IT O

perati

on

s

Ap

ps +

In

frastr

uctu

re

Bu

sin

ess O

ps

Define Transition Plan - projects required to transition the Capabilities C A R C C C C C

Manage Portfolio of Projects – Balances the investment against the

benefits

A R C C I I C C

Build the Capability(ies) (G2-G3)

Manage Projects I A C R C C C C

Define, Develop, Integrate, Test, Deploy and OCM I C C A R R C C

Support, Maintain and Exploit the Enterprise Capabilities (G3-G4)

Monitor Capability Performance and assess Planned vs. Actual benefits C I A I I I R R

Exploit the Capability (use what has been built) I I C I I I R R

Manage Requests for maintenance and enhancements C C A&R I I I C C

Continuous Planning to Transform the Capabilities (G0-G4)

Manage Enterprise Capabilities Improvement Dashboard, including the

work plan for each starting Gate, Status and required resources

I A R I I I C C

Manage Project ideation and Value Statements C A R I I I C C

Manage Project Prioritization, Gantt Chart Steering Decisions C A R I I I C C

Manage Process, Technology, and IT competency roadmaps C C R I I I A A

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180

Services

SM

T,

Pilla

r C

hair

s,

SV

P

Co

rp

orate

PM

O

IT P

lan

nin

g

Pro

ject

Man

ag

ers

Pro

ject

Delivery

Team

, N

on

IT

Pro

jects

Delivery

Team

, IT

IT O

perati

on

s

Ap

ps +

In

frastr

uctu

re

Bu

sin

ess O

ps

Report Performance measures for CBP and Action Plan I I R I I I A A

Capability Based Planning Competencies (G0-G4)

Define IT Competencies, Demand and Supply A C R C C

Work with each resource manager to define and manage resource

development and procurement plan Resources

I C A R R

Detailed Tasks for Each Phase Gate Activity

The following tables show stakeholders for each phase gate activity.

Chapter 5: Industrialize the Business Transformation Capability

181

Table 24: Tasks for Establish Strategy and Business Outcomes

Task Description

CEO

Pil

lar C

hair

s,

SV

P

CP

MO

-Dir

ecto

r

En

terp

ris

e

Arch

itect

[L3

]

IT O

ps V

P a

nd

Dir

ecto

rs

LO

B V

P s

an

d

Dir

ecto

rs

Establish Strategy and Business Outcomes (G0-G1)

Define Strategic Intent A R

Map Value Chain A R

Define Enterprise Capabilities (IT is a Business) A R R

Extract Supporting IT Capabilities A R R

Define Business Goals A R A

Link Capabilities to Goals including Target Performance Indicators for Capabilities,

Business Outcomes and Timeline

A R A

Define Measures and Metrics for each Enterprise Capabilities A R R

Define Measures and Metrics for Supporting IT Capabilities A R R

Define Data Required to Measure capability performance and automate data collection

and reporting

A R R

Chapter 5: Industrialize the Business Transformation Capability

182

Table 25: Tasks for Transition Plan and Business Case

Task Description

CP

MO

– P

ro

jects

Co

ord

inato

r

En

terp

ris

e

Arch

itect

[Level2

]

Pro

cess E

ng

ineer

(B

usin

ess

Arch

itect)

Data

,

Ap

plicati

on

,

In

frastr

uctu

re

Arch

itectu

re

IT A

dvis

ors

Bu

sin

ess

Str

ate

gy O

wn

er

Bu

sin

ess

Dir

ecto

rs a

nd

Man

ag

ers

Arch

itectu

re

Revie

w B

oard

IT V

P a

nd

CIO

Transition Plan and Business Case (G1-G2)

Review business strategy, affected capabilities and

their target performance, expected business

outcomes and industry level architectures

A R

Review architecture governance within the

Organization

A R

Identify key stakeholders – roles and positions

that can help identify obstacles

R A

Solicit Conceptual Architecture Requirements A R C C

Define AS-IS and TO-BE: Business, Information,

Data, Application, Infrastructure and any other

required view

A R R R I

Review Architecture with Chief Architect or IT VP

or CIO for Architecture Quality

R A

Summarize gaps and Define Transition Plan C R

Define Cost Model R C C C

Define Benefit Model and Financial Analysis C C R C

Chapter 5: Industrialize the Business Transformation Capability

183

Task Description

CP

MO

– P

ro

jects

Co

ord

inato

r

En

terp

ris

e

Arch

itect

[Level2

]

Pro

cess E

ng

ineer

(B

usin

ess

Arch

itect)

Data

,

Ap

plicati

on

,

In

frastr

uctu

re

Arch

itectu

re

IT A

dvis

ors

Bu

sin

ess

Str

ate

gy O

wn

er

Bu

sin

ess

Dir

ecto

rs a

nd

Man

ag

ers

Arch

itectu

re

Revie

w B

oard

IT V

P a

nd

CIO

Transition Plan and Business Case (G1-G2)

Review Architecture with Sponsor, CIO and

Architecture Review Board (not necessarily in this

order) and complete Quality Checklist

R C A A A

Prepare Architecture Roadmap Communication

Plan

R A

Hand off Business Case and Transition Plan to

Enterprise Portfolio Management

A R

Table 26: Tasks for Build the Capability(ies)

Task Detail

Pro

ject

Sp

on

so

r

Pro

ject

Man

ag

er

En

terp

ris

e

Arch

itect

[T

OG

AF /

L1

]

Pro

cess E

ng

ineer

Bu

sin

ess

An

aly

sts

Develo

pers/

In

teg

rato

rs

Syste

m T

esti

ng

Team

s

User T

esti

ng

SM

Es

IT P

racti

ces an

d

OC

M

IT O

perati

on

s

Build the Capability(ies) (G2-G3)

Chapter 5: Industrialize the Business Transformation Capability

184

Task Detail

Pro

ject

Sp

on

so

r

Pro

ject

Man

ag

er

En

terp

ris

e

Arch

itect

[T

OG

AF /

L1

]

Pro

cess E

ng

ineer

Bu

sin

ess

An

aly

sts

Develo

pers/

In

teg

rato

rs

Syste

m T

esti

ng

Team

s

User T

esti

ng

SM

Es

IT P

racti

ces an

d

OC

M

IT O

perati

on

s

Build the Capability(ies) (G2-G3)

Review Transition Plan and Business case or Value

Statement (for direct G2 work products – develop brief

architecture roadmap first)

A R C

Define Project Charter for each Project A R C

Validate each project charter for architecture consistency A R

Detail Project Plan, Communication Plan and Establish

Project Governance

A R C

Business Requirements + Test Scenario C A C R R

Functional Specification + Test Cases A R

Design/Develop and Unit Test A R

Data Conversion + Other Execution Strategies A R

System Test A R

User Acceptance Test R

End to End Process and System Documentation A C R C C

OCM Strategy and Plan A R

Prepare for Deployment including Change Request A R C

Chapter 5: Industrialize the Business Transformation Capability

185

Task Detail

Pro

ject

Sp

on

so

r

Pro

ject

Man

ag

er

En

terp

ris

e

Arch

itect

[T

OG

AF /

L1

]

Pro

cess E

ng

ineer

Bu

sin

ess

An

aly

sts

Develo

pers/

In

teg

rato

rs

Syste

m T

esti

ng

Team

s

User T

esti

ng

SM

Es

IT P

racti

ces an

d

OC

M

IT O

perati

on

s

Build the Capability(ies) (G2-G3)

Cut Over and DR and update Enterprise Capabilities

Repository

A R C C C C C C C

Warranty and Support A C R

Transition to Help Desk, A R C

Transition to Nurture and Exploitation Teams A R C

Project lessons learned A R C

Chapter 5: Industrialize the Business Transformation Capability

186

Table 27: Tasks for Support, Maintain and Exploit the Enterprise Capabilities

Task Description

Str

ate

gy/

Pilla

r

Ow

ner /

SV

P

En

terp

ris

e

Arch

itect

Bu

sin

ess

Op

erati

on

s

IT O

perati

on

s

Cap

ab

ilit

ies

Ow

ners

IT A

dvis

ors

IT H

elp

desk a

nd

In

cid

en

t

Man

ag

em

en

t IT P

lan

nin

g

Support, Maintain and Exploit the Enterprise Capabilities (G3-G4)

IT Systems Service Level Report – automate, publish and review R A

Capability Performance Measures – automate, publish and review R A

Business Outcome – enterprise scorecard R A

Manage Service Desk Ticket – Immediate/Severity 1 A R

Manage Service Desk Ticket Plan-able Opportunities, Value Statement R A

Continuous Capability Improvement Plan and review industry benchmarks

within the Capabilities

A C R

Work with Business and IT Ops SME to execute the Improvement Plans A C R R A

Chapter 5: Industrialize the Business Transformation Capability

187

Table 28: Tasks for Continuous Planning to Transform the Capabilities

Task Description

En

terp

ris

e

Cap

ab

ilit

ies A

dm

in

In

vestm

en

t

Po

rtf

olio

Execu

tive

Team

C

PM

O

IT A

dvis

or

En

terp

ris

e A

rch

itect

LO

B R

eso

urces

Man

ag

ers

IT R

esou

rces

Man

ag

ers

SV

P

Continuous Planning to Transform the Capabilities (G0-G4)

Ensure data quality – accuracy and concurrency in Continuous Planning

Portal – work products, SIB, Gantts, Ideation, Competencies –supply and

demand etc.

R

Develop Ideas into Arch Requirements or Value Statements A R C

Assess Capability Heat Map and create Work products A R C

Review Dashboard of continuous Planning and release work products into

execution

R A

Review Human Resources Demand and Supply R A C C

Incorporate leading and best practices in CBP R A

Report CBP Performance indicators and manage improvement plan R A C

Benchmark CBP processes against industry best practices R A

Review Enterprise Capabilities R A

Chapter 5: Industrialize the Business Transformation Capability

188

Table 29: Tasks for Capability Based Planning Competencies

Task Description

CIO

CB

P A

dm

in

IT V

P –

CB

P

Cap

ab

ilit

y

Ow

ner

IT V

Ps a

nd

Dir

ecto

rs

Capability Based Planning Competencies

Create Human Capital Demand and Supply Report R A

Identify Strategic, Augmented and Outsources Competencies R A

Develop development plan for Strategic and Augmented competencies A R R

Develop strategic sourcing plan for outsourced competencies C A R

Monitor HC development plan A R

Assess Demand and Supply: total cost of HC and Impact on programs delay cause of the HC shortage A R R

Monitor Staff Morale A R

Assess Business Transformation

Readiness

The Capability life cycle incorporates leading frameworks

from Enterprise Planning, Val IT and Governance,

Enterprise Architecture, Project Delivery, IT Service

Management and Organization Change Management. A

fully mature and comprehensive content ensures that the

organization is able to exploit information capabilities to

meet its strategic needs as described in the previous

sections.

To determine an organization’s ability to transform, we

need to perform an assessment. The following assessment

approach is intended to guide the reader on the criteria to

look for when making this assessment. A Business

Transformation Professional with competencies in making

Chapter 5: Industrialize the Business Transformation Capability

189

such assessments can add value and insight to those

accountable for the Business Transformation Capability. An

outcome of the assessment will gauge the organization’s

readiness to industrialize the Business Transformation

Capability.

Business Transformation Assessment

Approach

The scope of the assessment addresses the question of

“does the practice meet the needs of Planning and

Governance?” A more comprehensive assessment of the

practice is required to gain sufficient insight to develop the

target state and transition plans.

The assessment includes three perspectives:

1. Assess the completeness of the information at each

phase gate,

2. Using CMMI metrics, assess the maturity of the

process that transitions information from one gate to

another, and

3. Using CMMI metrics, assess the maturity of decision

making at each stage.

Information Completeness

Assessment Rating Criteria

1. Green: Information quality is sufficient to make the

decision(s)

2. Yellow: Information quality could be improved,

however, the decision(s) may not change

3. Red: Information quality needs to significantly

improve, the information is not adequate to make a

reliable decision

4. Other: any other state will require an explanation.

CMMI Process Maturity Levels

There are five levels defined along the continuum of the

CMMI and, according to the SEI: "Predictability,

effectiveness, and control of an organization's delivery

processes are believed to improve as the organization

moves up these five levels.”

1. Initial (chaotic, ad hoc, individual heroics) –

the starting point for use of a new or undocumented

repeatable process.

2. Repeatable – the process is at least documented

sufficiently such that repeating the same steps may

be attempted.

3. Defined – the process is defined/confirmed as a

standard business process, and decomposed to

levels 0, 1 and 2 (the latter being Work

Instructions).

4. Managed – the process is quantitatively managed

in accordance with agreed-upon metrics.

5. Optimizing – the process management includes

deliberate process optimization/improvement.

Chapter 5: Industrialize the Business Transformation Capability

190

Assessment Tasks

To complete the assessment, the following guidelines are

provided:

Review the CBvd™ Capability Life Cycle with the

affected stakeholders

Review the perception of maturity against the level

assessed by the assessor

Resolve conflicts and achieved consensus

Identify the corrective action plan and timeline

Pre-Requisites for Assessment

Review the Capability Based Value Delivery life cycle

Understand the capabilities vocabulary: Executive,

Directive – Operational and Strategic

Architecture Requirements – A clear understanding

of architecture requirements

Architecture of a capability from the industry

perspective, adoption of industry architecture to

develop roadmaps and business cases for business

strategies

Innovation threads, value statement and capabilities

Business strategies and capabilities association

Outcomes

Review the current business process

Review the improved business process

Identify the gaps and reach consensus

Identify corrective actions

Analysis

Based on the identified gaps, what is the current

performance scorecard and target for each transition?

Video 37: Process Flow vs. Work Flow

Phase Gate G0 to G1

Process Maturity and Enterprise Capabilities Content Assessment

Chapter 5: Industrialize the Business Transformation Capability

191

ID G1.01 Seq. No 10 Category: G0 to G1 Value: Enterprise Capabilities are understood by all stakeholders

and Business Strategies are based on Enterprise Capabilities map Description: Translate Strategic Intent into Enterprise Capabilities and Strategies

Information Assessment – assess state of information at Enterprise Capabilities Map

Seq. # Criterion Green Yellow Red Other Comments

10 The organization’s vision (i.e. future state without time

limit) is defined, published and understood by all

stakeholders

20 The strategic Intent (i.e. future state that is time

bound) is defined, published and understood by all

stakeholders

30 The value chain process for the entire organization is

mapped along with opportunities and threats

40 The value chain is translated into Executive capabilities

along with their current and target performance

indicators. Management has ranked capabilities as

follows:

1. will lead,

2. optimized and

3. Conform

50 All Executive capabilities have well defined Directive

capabilities

60 The architecture vision document for each executive

capability is created and communicated to all affected

stakeholders and the derived Directive capabilities are

scoped

Chapter 5: Industrialize the Business Transformation Capability

192

Seq. # Criterion Green Yellow Red Other Comments

70 There is a clear distinction between strategic and

operational capabilities and the distinction is fully

communicated

80 The Status of Strategic Intent and supporting

capabilities is formally reviewed and shared with all key

stakeholders

90 There is a clear reward and penalty mechanism when

capabilities don’t perform to their planned capacity

100 Each Business Strategy has a clear link to executive and

directive capabilities

110 A staff reward system is clearly linked to the

performance of capabilities

G0 to G1 Process Assessment – assess maturity of processes to translate Strategic Intent into Enterprise Capabilities/Strategies Translate Strategic Intent to Enterprise Capabilities and Strategic Plans

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comments

10 Process to incorporate changes in the market place into an

organization’s operating model

Chapter 5: Industrialize the Business Transformation Capability

193

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comments

20 Process to define the value chain for the Enterprise and line of

Business

30 Process to translate the value chain into enterprise capabilities

and prioritization (Lead, Average, Follow) of these capabilities

40 Process to define Directive Capabilities

50 Process to define common Business and Shared Capabilities

60 Process to link capabilities to business strategies

70 Process to hold strategy owners ACCOUNTABLE and

RESPONSIBLE for capability performance and results

80 Process to define enterprise business executive capabilities

90 Process to define enterprise technology executive capabilities

100 Process to translate enterprise business executive capabilities

into directive capabilities

110 Process to translate enterprise technology executive capabilities

into directive capabilities

120

Process to define a high level statement of work to develop a

roadmap for a strategy or capability for Enterprise Resource

Planning

Chapter 5: Industrialize the Business Transformation Capability

194

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comments

130 Ensure that the G1 Quality Checklist has been completed

Phase Gate G1 to G2

Process Maturity and Enterprise Capabilities Content Assessment

ID G2.01 Seq. No 20 Category: G1 to G2 Value: ensures the Business Strategies have financially

viable Implementation Roadmaps that are in align with enterprise business and technology principles, standards and industry wide capabilities Description: Practical and viable business case for enterprise

strategies

Information Assessment – assess state of Information at Enterprise Investment Portfolio

Seq. #

Criterion Green Yellow Red Other Comments

10 Each Directive Capability has performance metrics that are

measurable

20 Each Directive capability has current, target and transitional

states defined in terms of performance targets

Chapter 5: Industrialize the Business Transformation Capability

195

Seq.

# Criterion

Green Yellow Red Other Comments

30

Each Directive capability has industry defined or internally

developed architecture roadmap that defines what is

possible under ideal conditions

40

Directive Capability roadmaps are linked to strategy and

organization specific transition roadmaps are based on

needs defined as strategy objectives

50 Each strategy has a defined portfolio of projects

60 Projects are defined that meet the needs of the Enterprise

Investment Portfolio

70

The sponsor of each capability/strategy has agreed to

performance metrics, metric governance and has the skills

and authority to influence the full exploitation of the

capability

G1 to G2

Process Assessment: Assess the maturity of processes that translates Enterprise Capabilities/Strategies into Tangible and pragmatic transition roadmaps and business cases

Seq. #

Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

10 Process to define the architecture roadmap for a horizontal capability

from the industry perspective

Chapter 5: Industrialize the Business Transformation Capability

196

Seq. #

Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

20 Process to define the organization specific architecture roadmap for a

horizontal capability

30 Process to define the architecture roadmap for a vertical capability

from the industry perspective

40 Process to define the organization specific architecture roadmap for a

vertical capability

50

Process to define the transition roadmaps for a collection of

horizontal and vertical capabilities that support the business strategy

transition plan

60 Process to define initiatives – conformant to enterprise portfolio

needs – in support of business strategy

70 Process to update enterprise roadmaps or building blocks

80 Process to assess architecture feasibility after receiving investment

approval

90 Process to communicate the scope, timeline, cost of each project to

the project management resource

100 Ensure that the G2 Quality Checklist has been completed

Chapter 5: Industrialize the Business Transformation Capability

197

Phase Gate G2 to G3

Process Maturity and Enterprise Capabilities Content Assessment

ID G3.01 Seq. No 10 Category: G2 to G3 Value: On-time, On-budget and quality of capability being transitioned meets expectations Description: Transition capabilities to an agreed upon

performance level for on-time and on-budget

Information Assessment – assess state of information at Capability deployment: In this phase, projects are executed and the role of planning has been transitioned to one of monitoring

the execution. For this reason there is a minimal involvement of Enterprise Planning and governance

Seq.

# Criterion

Green

Yello

w

Red

Oth

er

Comments

10 Project performance metrics are meaningful and are being tracked

regularly and consistently

G2 to

G3

Process Assessment: Assess the maturity of processes that implements the architecture for

strategy and prepares the transitioned capabilities for production

Seq. #

Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

10 Process to define the charter for large, medium and small projects

Chapter 5: Industrialize the Business Transformation Capability

198

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

20 Process to plan for large, medium and small project

30 Process to steer projects for scope, timeline, cost and quality of

capability

40 Process to update Enterprise Capability Plan when baselines change

including for: milestones, resources, scope and cost

50 Process to define business requirements, system requirements,

develop, test and package for production [SDLC maturity]

60 Ensure that the G3 Quality Checklist has been completed

Phase Gate G3 to G4

ID G4.01 Seq. No 10 Category: G3 to G4 Value: Ensures capability is managed, exploited and incremental innovations are defined Description: Capability is being fully exploited

Information Assessment – assess state of information at during steady state management phase

Seq.

# Criterion

Green Yellow Red Other Comments

10 All capabilities and their current state is reflected in the

Enterprise Capabilities Portal

Chapter 5: Industrialize the Business Transformation Capability

199

Seq. #

Criterion Green Yellow Red Other Comments

20

Capability performance is monitored, measured in terms of

their business strategy and capability performance is related

to the enterprise scorecard

30 Architecture requirements of a capability are analyzed and

released into the continuous planning lifecycle

G3 to

G4

Process Assessment: Assess the maturity of processes that ensures all capabilities are

being fully exploited

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

10 Process to monitor capability performance and relate its performance to

the enterprise scorecard

20 Process to measure and report leading and lagging performance indicators

of a capability

30

Process to capture, analyze and disseminate capability architecture

requirements

[architecture requirements management]

Chapter 5: Industrialize the Business Transformation Capability

200

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

40

Process to adjust business processes, staffing, training (non-system

changes) in order to optimize capability utilization

[sometimes referred to as Continuous Improvement, Quality Circles, Self-

Directed Work Teams]

50 Process to identify plan-able system changes

60 Process to capture innovative ideas from staff and analyze them

Phase Gate G4 to G3, G2 and G1

ID G5.01 Seq. No 10 Category: G4 to Gx Value: Ensures capability is being maintained effectively

Description: Maintain Capability

Information Assessment – assess state of information at during steady state management phase

Chapter 5: Industrialize the Business Transformation Capability

201

Seq.

# Criterion

Green Yellow Red Other Comments

10

Changes to the capability are identified as obstacles

preventing the current capability to perform at the expected

target state

20

Logs of these changes are maintained and categorized as:

1. Cost,

2. Revenue,

3. Customer Service,

4. Staff Morale,

5. Corporate Citizenship or

6. Any other relevant categorization

30 Innovation threads are translated into architecture

requirements

40 Value statements capture architecture requirements,

innovation threads and strategic changes

G3 to

G4

Process Assessment: Assess the maturity of process that ensures all capabilities are being

fully exploited

Chapter 5: Industrialize the Business Transformation Capability

202

Seq. #

Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

10 Process to capture innovative ideas, translate them into architecture

requirements

20 Process to define Value Statements

30 Process to plan work to migrate ideas from G0 to G1

40 Process to plan work to migrate ideas from G1 to

50 Process to plan work to migrate ideas from G2 to [current planning

process focuses on this process]

Enterprise Planning and Governance

ID G6.01 Seq. No 10 Category: P1 Value: Process ensures all business transformation programs

are being managed as per enterprise needs and all resources are being effectively utilized Description: Govern Business and IT Planning Process

Information Assessment – assess state of information at during steady state management phase

Seq.

# Criterion

Green Yellow Red Other Comments

10 Every Work Request is planned to migrate from the

current Gate to next Gate

Chapter 5: Industrialize the Business Transformation Capability

203

Seq.

# Criterion

Green Yellow Red Other Comments

20

Work Requests starting at Gate G0, G1 – can be planned

to the same level as ones starting at G2, with a larger

range between high and low

30 Work requests are planned at the competency level

40 Real-time visibility of required vs. available resources at

the competency level

50 Status of all work requests is available to the Strategic

Planning Team

G3 to

G4

Process Assessment: Assess the maturity of process that ensures all capabilities are being

fully exploited

Seq.

# Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

10 Process to plan every Work Request

20 Process to launch required Work Request

30 Process to monitor Required vs. Available resources and the plans

for gaps

40 Process to maintain the status of all work orders

Chapter 5: Industrialize the Business Transformation Capability

204

Seq. #

Process

In

itial

Rep

eata

ble

Defin

ed

Man

ag

ed

Op

timiz

ing

Comment

50 Process to monitor realization of Value Statement after capability is

transitioned

60 Process to define and review the investment portfolio decision

principles

70 Process to assess impact of work request completion being delayed

on enterprise strategies

Performance Measures, Processes

and Governance

In Chapter 3, three key concerns for senior management of

public and private sector organizations were articulated:

1. Market Share: The percentage of the total

industry that purchases your organization’s

products and/or services. For the Public Sector,

this can be expresses as the percentage of total

consumers that consume the service delivered.

2. Profit margin: A measure of expected shareholder

value. For the Public Sector, this can be a measure

of how efficiently services are delivered. The more

efficient, the greater the potential to use available

resources to improve the service delivery.

3. Value in the Pipeline: Senior management of

both private and public sector organizations need

to have a continuous pipeline of innovations that

will make the organization more effective and

efficient in the market place. By being more

effective than its competitors, an organization can

increase market share and realized efficiencies will

increase profit margins.

While the above indicators can reflect a state at a point in

time, strong value in the pipeline will allow the organization

to realize future value. The ability of the organization to

translate the value in the pipeline to realized outcomes is

Chapter 5: Industrialize the Business Transformation Capability

205

enabled through its Business Transformation Capability and

we need an effective and pragmatic way to measure the

performance of this capability.

Knowing What to Measure

An executive capability is enabled by supporting capabilities

similar to the components of a value chain. In fact, a value

chain and architecture reference model can be created for a

capability, both supporting and executive. When evaluating

performance of an executive capability, we need to

understand its supporting elements.

In improving the performance of a capability, we also need

to understand the performance of its elements; that is to

determine the weakest link. By improving the weakest

performer, we can augment capability performance through

the smallest required investment.

When it comes to maturity, we need to determine if the

objective is to mature a discipline or a capability. We also

need to understand the value we are striving for. If we are

looking to improve the capabilities of the organization, we

will need to put aside our local interests and maturity of our

own domain and do what is in the best interest of the

organization. Senior management can lay out the priorities

for the organization but alignment with these priorities and

commitment is needed from all individuals that make up

the greater organization.

Performance Measures of the

Business Transformation Capability

To measure performance of a capability, we look towards

indicators that express:

1. The time taken to complete the capability’s activities,

2. The resources consumed by the capability,

3. The effectiveness of the capability in doing what is

required.

When expectations of performance are not met, we need

indicators that give us insight into the obstacles that need

to be overcome and greater understanding of the problem

to solve. Performance indicators need to be both leading

(indicative of changes to come) and lagging (changes after

a period of time) to give a more robust frame of reference

for the decision(s) that need to be made.

For an executive understanding of capability performance,

we should strive to have 4-7 performance measures. Each

measure should have a quantifiable representation; this is

called a metric. Such metrics can be compared along

organizational departments and benchmarked against the

industry or across other industries. This will provide insight

into what is possible to achieve and what will be industry

leading. When industry leading performance is achieved,

the organization can use this performance to gain a

competitive advantage over its competitors; this capability

then becomes strategic to the organization.

Video 38: Balance in Performance Measures

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The Business Transformation Capability can be strategic to

an organization especially in a changing environment. To

become strategic, the capability needs to perform

consistently to expectations and perform to at least the

level of change in the marketplace. Therefore, this

capability needs to be industrialized and its performance

needs to be closely monitored and specified.

To measure the performance of the Business

Transformation Capability, the following indicators are

specified:

1. Time to Plan: Time is measured from submission of

a Service Request to when the work is scheduled

and prioritized by senior management. Additional

time measures for certain activities and phases may

also prove to be useful.

2. Effort to Plan: Effort is measure of how much time

is spend by various stakeholders in IT and Business

to define the initial plan. Additional measures of

effort to perform other activities for the Business

Transformation Capability can also be useful.

3. Plan Efficiency: Measures what percentage of work

products are delivered on-time and on-budget from

the initial and baseline within certain intervals of

expectations. In general, it is desired if the

difference is within 5% but additional variances

should also be defined so that the proper corrective

action can be taken to address the root cause of the

deviance.

4. Plan Effectiveness: Measures what percentage of

the transitioned capabilities actually achieves the

intended business outcomes as defined in the Value

Statement. The direct measure of Plan Effectiveness

is through the Enterprise Scorecard.

5. Stakeholder satisfaction: Satisfaction is measured

through the quality and relevance of the information

provided to the sponsor and receiver(s) at the

beginning of each phase – refer to the Capability

Based Value Delivery methodology.

6. Ideas generated: This indicator tracks the number

of ideas generated for consumption of the Business

Transformation Capability. This is a leading indicator

of performance as when there is an increase in the

number of ideas generated; the organization can

look forward to increased future value realization.

A view of this capability can be seen in the following figure.

The tracking of the performance metrics can become part of

the performance scorecard; an integral measure of

corporate performance.

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ability toTransform the Enterprise

Supporting Capabilities

Continuous Planning Strategic Planning Enterprise Architecture Program Management Portfolio Management Innovation Mgt SDLC and QA Value Realization

Performance Metrics

Lagging (A) Time to Plan (duration in days) (B) Effort to Plan (person days) (C) Plan Efficiency (% of projects

completed to within time, budget and scope: 5%, 30%, 30+%)

(D) Plan Effectiveness (% of projects that enable desired outcome)

Leading (E) Stakeholder Satisfaction (%) (F) Ideas generated (#/month)

Current Performance

A: 20 B: 15C: 10%, 30%, 60%D: 10%E: 10% F: 10

Transition: Year 1

Ability to plan in real-time, continuouslyA: 15 B: 12C: 30%, 40%, 30%D: 35%E: 20% F: 70

Transition: Year 2

A: 10 B: 8C: 50%, 40%, 10%D: 40%E: 50% F: 150

Transition: Year 3

A: 5 B: 2C: 60%, 35%, 5%D: 60%E: 90% F: 200

By meeting the target metrics in year 3, the organization will have achieved world-class performance for their Business Transformation Capability.

Figure 35: Capability view of Business Transformation

In addition to describing the supporting capabilities for

transformation, a possible transition plan of how the

capability metrics will be improved is also shown. This

single view shows how the performance of the capability

will be measured and its expected targets of performance

as it matures from year to year. Actual results will depend

on how well the organization will be able to execute the

needed changes to improve the capability performance.

While there may be other useful measures, it is important

to assure that the right information is being conveyed by

the measures and the focus is on improving the Business

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Transformation Capability as a whole and not looking at the

delivery/maturity of a singular component.

Performance Measurement and

Accountability

When measuring performance, it is important to follow the

same process for aggregating information and calculating

the value. This process needs to be consistently applied so

that the metrics are meaningful and actual changes are

accurately assessed.

With the process and sources of information well known,

the performance measures need to be calculated at

meaningful intervals so that management and other

stakeholders can make decisions based on actual

performance. While those in the organization’s production

environment are responsible for performance, those

monitoring performance are accountable for the quality of

information used for decision-making.

Governance is the process used by organizations to make

decisions and those accountable for the results of their

decisions rely on information such as the actual

performance measures. The performance measures need

to create a relevant picture of the capability in production

and indicate where attention needs to be focused.

To industrialize the Business Transformation Capability, the

most important performance measures need to be

standardized and updated as often as needed for the

assessment interval of the capability. Typically, for changes

that can be made in the production environment, the

interval can be about two weeks. For more involved

architecture changes that require a larger group of

stakeholders, such reviews may be performed once or twice

a quarter or scheduled as needed.

With respect to the frequency of capability assessments and

reviews, we need to understand the value of the Business

Transformation Capability to the organization. If the

marketplace and organization is stable, the Business

Transformation Capability will not be strategic. In fast-

moving industries and markets, a world-class Business

Transformation Capability can be very strategic to the

organization.

Processes Required by Business

Transformation

In industrializing the business transformation capability, we

need to aggregate process, people and technology. From

the disciplines and divisions that make up the organization,

there is no shortage of process, knowledge and subject

matter expertise; the challenge faced by organizations is

how to effectively align these practices to collaborate with

one another to deliver enterprise value.

To achieve this, we cannot look at just one or a few of the

Enterprise’s processes – such as the System Development

Life Cycle and Project Management – but understand all of

the processes that need to be supported to enable the

Business Transformation Capability. Such processes were

highlighted in the white paper: Requirements for a World-

Chapter 5: Industrialize the Business Transformation Capability

209

Class Business Transformation Capability13. Some of these

processes include:

Enabling a Learning Organization

Skills Development

Enabling an IT Landscape

Enabling Enterprise Capabilities and Opportunities

Performing Strategic Planning

Managing a Portfolio of Investment

Investment Governance

Value Management

For a more complete list of processes, please see Reference

#2.

For each of the processes, we can create process flows and

describe the interactions involved. As an example, the

following description describes the process flow for

submitting an idea to enable a learning organization.

Submit an Innovation Idea

Start:

A member of the business or IT community – a

Value Generator – wishes to review already

submitted ideas or to submit an idea to help the

organization become more efficient and/or effective.

This idea or the review of previously submitted ideas

may enhance a current capability or articulate the

need for one that currently does not exist.

Steps:

1. A Value Generator accesses theBTCloud.com to

review existing innovation ideas or submits an

13

See Reference #2: Requirements for a World-Class Business Transformation Capability

idea for consideration. Feedback for a submitted

idea may also be optionally requested by the

Value Generator through theBTCloud.com.

2. In discussion with peers or with an IT Advisor,

the idea is further developed through

theBTCloud.com as additional feedback and

comments are recorded.

3. An IT Advisor is assigned the idea and gathers

the necessary information to mature the idea

through discussions with peers and upstream

management.

4. There are two outcomes for the idea:

a. If a value statement exists for the idea it can

be linked to it or a new value statement is

created; the idea becomes an uncommitted

service request created by the IT Advisor and

triaged to the appropriate phase (G0-G3) to

be further developed.

b. The idea is “parked” as an architectural

requirement for a capability until more

information becomes available or enough

architecture requirements present compelling

value that can be realized through a work

package (WP).

5. The idea’s status is updated by the IT Advisor

and additional information can be added through

theBTCloud.com throughout the idea’s lifecycle.

Stop:

The Idea is appropriately triaged; a new service

request or an architecture requirement for a

capability may be identified.

Value:

Ideas submitted and added value to by the business

and IT community helps the organization transform

to become more efficient and effective faster than

their competitors.

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From the described process flow, we can create a swim lane diagram of the interactions that take place as shown in Figure 36:

Example of a swim lane diagram.

Figure 36: Example of a swim lane diagram

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Video 39: Expressing Conceptual Architecture

The previous diagram can help validate process flows and decision points with other stakeholders. When the flow is accepted,

we can then determine the supported work flow that will implement the process in the organization.

Building the Business Transformation Capability

With the required processes in place, we can now focus on building the Business Transformation Capability as shown:

Figure 37: Putting it all together – enabling the Business Transformation Capability

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The previous figure shows that when ideas and requests for

service are aggregated, consideration can focus on the

value they present as well as how well they align with the

organization’s strategic objectives.

As an example, a manufacturing company is seeing

downward pressure on price for its products and consumer

tastes remaining high for its current offerings. For the next

5 years, the organization has defined its strategic intent to

be the lowest cost and price producer in the industry. A

business strategy has been created to fund innovations that

would improve operating efficiency and has created a

portfolio of $2 million to fund such initiatives.

Consider the following idea submissions:

1. Improve product quality: An idea is submitted

that would provide 3 units of immediate value due to

improved market share and 5 year benefits of 8

units. The cost to implement would be 5 units and

would be completed in a quarter with medium

architecture complexity.

2. Improve marketing efficiency: An idea to

leverage social media would save 5 units from the

marketing budget and cost 3 units to setup and can

be completed in 1 month with small architecture

complexity.

Both ideas would have viable business cases and #1 would

represent greater value to the organization. Since #2

aligns with an accepted business strategy, the idea can be

translated into a service request waiting for approval (i.e.

resource allocation) at phase gate G2. Since #1 does not

conform to a supported business strategy, it may be

considered by strategy owners at phase gate G1 and have

the proper support moving downstream by being aligned

with a new or modified strategy and portfolio of investment.

In a continuous planning model, we may have several work

packages in the queue waiting for approval to move to the

next activity. If a work package was approved for

implementation, such as #2, presented a greater value

proposition than a work package waiting for resource

allocation, then #2 would have greater priority to receive

resources. In this manner, the priority of work packages

can be set according to the value they present and other

objective measures. This enables an organization to reap

greater value sooner and is no longer prone to internal

politics.

Continuous planning is disruptive to organizations because

it impacts most if not all of its functions. Forecasting and

budgeting for future events is no longer required as the

investment portfolio is available to those initiatives that

have viable business cases and only those initiatives that

are viable prior to execution will be funded. Continuous

planning and industrialization of Business Transformation

thus requires not just the support and direction from Senior

Management, it also requires buy-in and commitment from

the greater organization for both Enterprise Capabilities: 1)

running the organization and 2) changing the organization.

Governance and Decision Points

Throughout the capability life cycle, there are a number of

decisions that need to be made to mature the capability.

For each decision, there is a stewardship role, where the

Chapter 5: Industrialize the Business Transformation Capability

213

decision process is guided, and a decision maker that is

accountable for the outcome and the decision that is made.

Both these functions require information of a sufficient

quality to make decisions and this quality is provided from

the disciplines and professionals of the Business

Transformation Capability.

Some important decisions that need to be made throughout

the capability life cycle are shown in Figure 38: Major

Decisions Points throughout the Capability Life Cycle.

Figure 38: Major Decisions Points throughout the Capability Life Cycle

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Each of the above decision points are described in the following table.

Table 30: Described Decision Points

Decision

#

Decision Context Stewardship Decision

Maker

TR1 Triage Service Request – Incident, Service Catalogue, Plan-able Activity ITSM Manager Service Desk

D1 Create Work Package (WP) or Park the Value Statement, determine

starting Gate to create a WP or Park the Idea.

IT Advisor Functional Area VP

or Pillar Leader

D2 Monitor workload, status of each Active WP and strategy execution

within each Phase Gate.

Is the currently planned work on time and is the newly planned work

being released as planned?

COO Functional

Steering Leads

and Strategy

Owners

D3 Impact of business climate Change on Enterprise Capabilities: Do

business strategies reflect the change in business climate?

COO CEO and SVP

Team

D4 Adapted Roadmap and Business Case

Is the adapted roadmap meeting the business and technology

constraints and are they described adequately?

Does the Architecture conform to the Enterprise Standards?

CIO Chief Architect

D5 Do the transition plan and business case meet the needs of all

stakeholders?

COO Capability or

Strategy Owner

D6 Rationalize Investment portfolio based on Balanced Scorecard

allocation, Strategic Themes, Mandatory Risk, Timeline and ROI driven

Investment Decisions – Transition WP from Uncommitted to Active

Is the portfolio effectively allocated?

COO Functional

Steering Leads

and Strategy

Owners

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Decision

#

Decision Context Stewardship Decision

Maker

D7 Implementation Compliance – Design Review, Project Compliance

Does the implementation conform to the Business Case?

COO Program/ Project

Sponsor

D8 Change to Production Environment – Capability Change Management,

Is the changed capability ready for deployment into production?

Capability Owner Change Approval

Board

D9 Value Generation and Capability Exploitation – is the capability being

exploited as planned?

COO Capability Senior

VP

In the above table, a pillar leader is one that is the leader

for the capability.

It is important to note that there are different stakeholders

for stewardship and decision making. For the above

decisions, the groups and individuals involved with business

transformation need to understand what quality of

information is required for each decision that needs to be

made. The knowledge of what decisions and who should be

involved results in effectiveness and timely decisions make

Business Transformation efficient.

Industrialize the Repository

Throughout the capability life cycle, a lot of information is

generated. For many organizations, a good deal of time is

spent searching for the needed content which results in

slowing the progress of capability development. There is no

shortage of information available but the right information

that is often reusable becomes harder to find.

Business Transformation Professionals need to actively

manage and make available content that is reusable. To do

so, we need to define the typical content that is often used

to mature a capability. We also need to understand the

difference between content that is presented to decision-

making stakeholders (i.e. a deliverable) and content that

supports the deliverable and helps Business Transformation

Professionals to do their work (i.e. artifacts).

The structure of artifacts and deliverables can be consistent

to state what information is needed and tailored for each

initiative. Most organizations are teeming with templates

and required content that needs to be created. Structure is

needed when we understand the “what”, but when content

is created, the driver becomes the structure of the

Chapter 5: Industrialize the Business Transformation Capability

216

document rather than the information needed to make the

best decision to move forward.

As we put together the elements that make our ability to

transform effective, we can then focus on what we need to

do to be efficient. We need to be able to access useful

information timely, we need quality content that can help

us create the necessary artifacts and deliverables to further

our capability and we need to understand the requirements

that can be automated to support business transformation.

These automation requirements were discussed in reference

#2 with key areas that include:

Enterprise Capabilities Map and Governance of

Portfolio of Investment,

Capability Based Value Delivery Services and

Governance,

Learning and Sharing,

The IT Landscape,

Industry and Enterprise Architecture of Capabilities,

IT Engagement with other organization divisions,

Work space for a Business Transformation

Professional

Impact Assessments

By addressing such requirements, we can look towards

achieving efficiency in our Business Transformation

Capability. Now that we understand what we need to

support for Business Transformation, what applications are

available and how can they be assessed?

Tools to Industrialize the Business

Transformation Capability

While there are a myriad of tools available, most tools cater

to a particular function of the Business Transformation

Capability. Application vendors in general are very adept at

being able to convince groups in the organization of the

value of their application to do run their business functions

and have the immediate department in mind. When it

comes to integrating other groups with other interests, local

applications have difficulty supporting the necessary

changes.

The Open Group created a tool conformance requirement

for TOGAF®14. This list of requirements focus on a tool for

enterprise architecture but it also supports many elements

for Business Transformation. A single application may not

support all requirements for Business Transformation but it

is important to understand how the required functions are

support. As an example of the functions supported, how do

you support the following in your organization?

A learning organization including innovation

management

Capability architecture and consistent modeling

Value in the pipeline

A Standards Information Base

Business Transformation Education and Collaborative

Learning

Architecture Definition and Guidance

14

Please see reference #6

Chapter 5: Industrialize the Business Transformation Capability

217

Portfolio Management

Transparency and Accountability

Governance, information quality and decisions

A Performance Scorecard

Capability definition and transition plan

Work packages planned, in progress and completed

that transition capabilities

Video 40: TOGAF® Tool Conformance

When we consider data modeling, how would we show the

relationship between the following information entities?

• Mission Vision and Values

• Strategic Intent

• Enterprise Capabilities – People, Process and

Technology

• Capability Measures

• Measure Metrics and Target Dates

• Roadmaps

• Portfolio of Projects/Work Packages

• Architecture Requirements

• Organization

• Competencies

• Data

• Application

• Technology

• Interoperability

• Strategy Map

• Standards

• Principles

• BT Services

• and more…

While each entity is recognizable, understanding how they

map together and starting with a complete list of entities

also needs to be supported by an application.

With all of these requirements, is there an application that

can support and align the work required by Business

Transformation?

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theBTcloud: Industrialize Business Transformation

theBTcloud15 can help you industrialize your Business

Transformation Capability. It has been used to implement

the processes required for Business Transformation as well

as perform and track phase gate activities.

theBTcloud is a web-based application that can be installed

on-site or accessed through the internet that will

industrialize your capability to transform. This application

supports a number of business processes and automation

requirements necessary to support the Transformation

Capability. Some of the key business processes of the

Transformation Capability include:

1. Creating a Learning Organization: A learning

organization enables the capture and value-add of

“home grown” innovation ideas that creates new and

improves existing transformations.

2. Promoting Skills Development: Fostering the

growth of skills and knowledge areas of organizational

people resources will reduce the reliance on outside

resources to perform transformation activities and

increase internal competencies to realize business

outcomes.

3. Enabling reusability of artifacts and deliverables

for transformation: Organizations typically struggle

with too much information to manage; theBTcloud

supports processes that maintain the quality of

content to promote reusability and thus reduces the

timelines for transformation realization.

15

See http://theBTcloud.com

4. Maintaining upstream and downstream

traceability of transformation initiatives:

theBTcloud enables traceability of each transformation

initiative to the organization’s strategic intent,

strategic themes and business strategies so that

priorities can quickly be determined objectively.

5. Performing impact assessments due to changes

in strategy and business conditions: theBTcloud

can determine the impact on existing transformation

initiatives in the pipeline due to a change in strategy

or other impacts.

6. Managing and planning resource requirements

for transformation initiatives: theBTcloud enables

resources and their competencies to be monitored and

assigned to initiatives to have them completed for

their respective phase.

7. Monitoring transformational performance and

defining governance: theBTcloud provides a

performance dashboard of key metrics and can also

define the decisions that need to be made for a

transformation initiative to succeed.

While there are many options to successfully industrialize

the Business Transformation Capability, the initial focus is

to be able to implement the necessary processes and

information needs. When the Business Transformation

Capability proves to be effective, we can then focus on its

efficiency.

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219

Chapter 5 References

1. Open CA Conformance Requirements,

http://www.opengroup.org/openca/cert/docs/OpenCA_Conformance_Requirements.pdf

2. Requirements for a World-Class Business Transformation Capability,

http://qrs3e.com/landingpages/pages/theBTcloudProcessesandautomationRequirements.pdf

3. Enabling a Competitive Advantage through Continuous Business Transformation,

http://qrs3e.com/landingpages/pages/theBTcloud-Executive%20WP.pdf

4. Building and Industrializing a Continuous Business Transformation Capability,

http://qrs3e.com/landingpages/pages/theBTcloud-Industrialize%20WP.pdf

5. theBTcloud’s TOGAF® Tool Conformance Statement, http://qrs3e.com/landingpages/pages/togaf9-tool-confreqts-csq-

qrs.xls

6. TOGAF® Tool Conformance Requirements, http://www.opengroup.org/togaf9/cert/docs/TOGAF9-Tool-ConfReqts-CSQ.xls

7. TOGAF® 9.1 Specification, The Open Group: http://www.opengroup.org/togaf/

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220

Chapter 6: Case Studies of Capability-Based Thinking

“It always seems impossible until it’s done.”

Nelson Mandela

Abstract

This section is work in progress and will be further developed over time.

Through a collaborative effort of a large number of practitioners, we are

working to define a complete enterprise architecture for an organization that

has taken on the near-impossible mission of improving population health.

Specifically, this exercise will demonstrate thought process needed to

translate enterprise strategic intent into capabilities and a portfolio of

transformation projects.

Key Chapter Sections

Approach to Case Studies… 221

Case Study #1: Construction… 224

Case Study #2: Regulated Insurance

and Worker Safety… 228

Case Study #3: Manufacturing… 231

Case Study #4: Financial Services 234

Case Study # 5: Healthcare

Insurance… 238

Chapter 6: Case Studies of Capability-Based Thinking

221

About the Case Studies Presented

We need evidence that an approach to solving a specific

problem is proven. In reality, there are some

approaches/practices that are very obvious; you wonder

why everybody doesn’t use the same approach to solve

these types of problem. To improve customer service, a

pleasant attitude towards a customer is a good starting

practice. Do we really need proof that a pleasant attitude

in part can help improve the customer experience?

Business Transformation is one such problem for which if

we break the problem down to its core elements, the

methodology to solve the problem is straight-forward. The

solution to the problem that business transformation needs

to solve however may not be as obvious.

Organizations’ undertake business transformation programs

to change the configuration of their enterprise capabilities

so they can achieve outputs that are different from what is

being produced today. For example in manufacturing, an

assembly line produces ‘x’ units per hour at a quality rate of

‘y’, with ‘z’ human and capital resources. Organization

would like to hold the quality to the same level and reduce

cost (that is use less resources) and improve throughput to

meet customer demand. In this case, business

transformation simply reconfigures the enterprise

capabilities to a different state to produce the needed

outputs.

A number of case studies will be shown from different

industries to demonstrate the application of capability-

based thinking and an enterprise architecture approach to

business transformation.

Objective of this Chapter

The value of enterprise architecture is often a challenging

question for many aspiring enterprise architects and

practices. Our experience shows that capability-based

thinking incorporated with methods of doing architecture

brings tangible business value to the forefront. It not only

makes EA transparent but also enables the entire business

transformation continuum to be transparent and squarely

puts the accountability on the right roles within the

organization.

Case studies have been summarized from our experience to

show how capability based-thinking combined with EA

methods have helped organizations. The names of the

organization have been withheld to bring focus on sharing

success and failure events. Although from different

perspectives, both successes and failures offer the same

amount of learning value.

Approach to Case Studies

We adopted a standardized approach to describing each

case study below; each case study contains:

Industry Discontinuities

This section provides a brief description of the industry and

potential discontinuities that are pressuring change on

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222

existing players that can also give rise to new market

entrants.

Size of the Organization

The size of the organization is determined by:

number of employees

locations and

cultures

Enterprise and Scope

This section defines how the enterprise and scope of the

transformation program was defined initially and after

architecture thinking and methods were applied.

Initial Scope: scope statement and objectives

After Architecture: scope statement and objectives

Business Complexity

The business complexity is assessed from three different

perspectives as defined in literature for a “wicked problem”.

The following matrix to assess the complexity of architected

scope will be used.

Table 31: Architecture Complexity Matrix

Rate Description Ordinal Value

Assessment

Technology Complexity

Low Skills to implement and support the technology exists within the enterprise 1

Med Skills to implement and support the technology exists within the industry 2

High Requires brand-new technology skills to implement and support; skills will

have to be developed

3

People Complexity: impact of change on people

Low Next to no impact on people; people are eager to accept the resulting change 1

Med Some education and training will be required, but overall, there is no

significant impact on people

2

High Current job descriptions will fundamentally change, there be re-organization

and a number of people engaged in this process will be reduced after the

3

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223

Rate Description Ordinal

Value

Assessment

changes

Wickedness Complexity: alternative options and consensus among enterprise leadership

Low Three is exactly one set of capabilities that must be transformed in order to

achieve the intended outcome

1

Med Several different sets of capabilities can be transformed to achieve the

intended outcome; however there is broad consensus among leadership of

which sets of capabilities will be transformed and to what level.

2

High Several different sets of capabilities can be transformed to achieve the

intended outcome; however there is No Consensus among leadership of

which sets of capabilities will be transformed and to what level.

3

Complexity Rating: = 1*[technology ordinal value] +

2*[people ordinal value] + 4*[wickedness ordinal value]

Proposed Architecture

The proposed architecture is briefly described in terms of:

Business outcome

Capabilities affected and their performance metrics

Results

Actual Capability performance achieved

Lessons Learnt

What went well and why?

What went poorly and why?

Lessons for the Business Transformation Leader

What can be done differently to improve the transformation

capability of the organization?

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Case Study #1: Construction

At least in some form, concrete, has been used in

construction for thousands of years. The ancient Assyrians,

Babylonians and Egyptians all had their own form of

concrete, as did the Roman Empire, with a very similar

binding cement mixture to what is used today.

Ready-Mixed Concrete Manufacturing production is done in

specialised plants separate of construction sites. This saves

time and labour at the construction site and also allows

specialised concretes to be mixed.

Some of the products manufactured in this industry

include:

Concrete slurry

Dry mix concrete

Dry mix mortar

Ready-mixed concrete

Concrete is made up of cement, sand, rocks (or aggregate),

specialized chemicals and water. Once the components

have been mixed together, they will remain in a fluid state

for between four and six hours. During this time the

mixture is transported to the construction site in a truck

fitted with a spinning tank to keep the concrete agitated,

which stops it from setting and settling.

Industry

Considerations for this organization include:

Concrete manufacturing and distribution to

construction sites

Drivers for Discontinuities

o Change in plant technology from relay

controls to PLC (programmable logic

controller)

o Advanced usage of chemicals to achieve

higher concrete performance at lower cost

o Precise use of ingredients including chemicals

o High rise buildings have complex set of

recipes that must be managed in real-time

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o Higher reliability of plant operations is

required as pours are often longer than a

continuous 24 hours

o A single non-conforming batch implies the

entire build section must be ripped out

o A test cycle is often 24, 48 and 72 hours

long, hence reliable weigh and management

system are required

Size of the Organization

The size of the organization was determined by:

500 truck drivers

1250 plant staff and support

20 engineers and admin staff

Location:

office single location with 45 plant location across

entire local area

Cultural considerations:

single culture and language

Enterprise and Scope

Initial Scope: scope statement and objectives

Upgrade the plant management system to latest

technology

Improve plant reliability

After Architecture: scope statement and objectives

Entire life cycle from quotation to 24th day quality

test

Improve total cost of concrete per square yard

Business Complexity

Business complexity was found to be:

Complexity Rating: = 1*[tech ordinal value]+2*

[people ordinal value]+ 4*[wickedness ordinal

value]

Initial :1*1 + 2(2) + 4 (3) = 16

After : 1*1+ 2*1+4*1 = 7

Proposed Architecture

The proposed architecture is briefly described in terms of:

Business outcome: cost per square/yard of concrete

Capabilities affected and their performance metrics

• Capability: Upgrade plant system to latest

technology; performance measure: system is

available 99.9% of the time; the operator

needs to mix a load of concrete of any recipe

anywhere and anytime.

• Capability: Real-time communication between

truck and the system; performance measure:

100% of the time, the truck status is known

in the plant management system

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• Capability: Ability to change recipes in real-

time; performance measure: one engineering

admin staff can update and manage all

recipes in all plants in real-time without delay

in the plants

• Capability: Analyse sample results in real-

time based on actual weight of martials;

performance measure: analysis and send

results back to the truck driver with 5

minutes of truck being loaded

Results

Actual: Capability performance achieved

Plant Reliability: 99.9% plus enabled the plant to

switch to manual mode to within seconds in the

event that plant automation failed.

Changed recipes – ability to change recipes in back

end system and push them into plant systems with

100% accuracy and with one engineering admin

resource

Reduced cement consumption by 2% in the first

year by using substitute products and mixture of

chemicals to take advantage of outdoor temperature

changes

Created a culture of transparency and accountability

and industrialized a transparent and continuous

improvement program

Lessons Learnt

What went well and why?

Project team organization structure: project

sponsor, COO in charge of the plant operations and

product quality created a team with a clearly defined

mandate for each member. The team consisted of:

sponsor, project manager and architect. He held

every member to their mandate and forced fact-

based decisions through the life of the project and

the life of each subsequent capability.

What went poorly and why?

Technology complexity: radio system used in many

trucks was old with no documentation and vendor

support. Replacement of these radios was

expensive, a work around took longer and increased

the cost of the project. Increased cost was

recovered through improvement to truck utilization

and effectiveness.

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Lessons for the Business Transformation Leader

As a project leadership team, we learned the value of capability based-thinking and explicit performance indicators

helped resolve many potential conflicts between business central in-plant, in-house IT, plant engineering and project

teams

The project confirmed the traditional belief that a good architecture should deliver better ROI than available through a

traditional project management approach

Value of communication and professionalism was established early and maintained throughout the project was a strong

contributor to the positive outcome

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Case Study #2: Regulated Insurance and Worker Safety

In most OECD countries, worker safety and insurance

boards exist to promote health and safety at the workplace

and in the event an injury occurs in the line of duty, a

mechanism is available to employee and employer for fair

compensation without litigation. The overall framework for

this service is similar in most countries but often managed

at each jurisdiction by the ministry of labour and health.

Industry

Considerations for this organization include:

Workers safety and Insurance Board

Drivers for Discontinuities

o Changes in the complexion of industry: from

farm work to industrialization then to white

collar jobs, types of injuries and revenue

structure to cover cost was rapidly changing

o Unfunded liability was growing faster than

potential revenue realities

o Cost of healthcare and retraining injured

workers for the new economy was becoming

expensive

o Current processes and technologies did not

enable management to proactively manage

finances of the organization and service

injured workers at the speed required to help

then return to work

Size of the Organization

The size of the organization was determined by:

• 1700 employees, mostly clerical staff with on the job

knowledge of Workers Safety Act, specific claims

history and precedence based ruling and decisions

Locations:

• 12 offices across the province in Canada

Cultural considerations:

• Homogeneous, mostly unionized workforce,

management and union had good working

relationship and both parties understood the

financial state of the industry and plight of the

injured worker

Enterprise and Scope

Initial Scope: scope statement and objectives

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• To address the discontinuities, senior management

created four broad strategies: Engage Staff, Manage

Cost, Manage Revenue and Manage Back Office

Processes.

• As part of the back office process strategy, the

scope of this project was to improve the financial

system, human capital and enterprise data-

warehouse and business intelligence

After Architecture: scope statement and objectives

• Off-the-shelf financial system without customizations

to handle: general ledger, employee expenses,

accounts receivable and payable, cash management,

collections, financial planning and analytics, HRIS,

payroll and human capital management

• Ability to close month end, project actuals and

planned spending within days of month end

• Ability to plan and recruit staff, reduce staff turnover

and costs to recruit

Business Complexity

Business complexity was found to be:

Complexity Rating: = 1*[tech ordinal value]+2*

[people ordinal value]+ 4*[wickedness ordinal

value]

o Initial : 1*2+2*2+4*2 = 14

o After : 1*1+2*2+ 4*1 = 9

o Organization change management strategy

was developed to manage this complexity

Proposed Architecture

The proposed architecture is briefly described in terms of:

Business outcome

• Implement off-the-shelf systems to

streamline human resources and financial

services process

• Reduce cost of operations and improve

quality

Capabilities affected and their performance

measures

• Time and cost to close month end,

expectation of 15 days

• Management satisfaction with financial

reporting

• Reduce staff turnover, cost to recruit and

open vacancy weeks (the # of weeks a

vacancy is open)

Results

Actual: Capability performance achieved

On-time and on-budget implementation of major

enterprise resource planning across the entire

organization

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Capabilities performed as planned and the

enterprise was able to respond to new

discontinuities in their industry

Lessons Learnt

What went well and why?

CFO who had the overall accountability to the board

of directors for the performance of the project built a

collaborative senior management team and allowed

each member to perform their job and held each

member’s feet to the fire

What went poorly and why?

In order to get things done fast and on-time and on-

budget, the enterprise did not take the time to

develop in-house capabilities to implement similarly

complex change projects

In subsequent years, the organization failed to

implement the other three legs of their enterprise

strategy

Lessons for the Business Transformation Leader

CIO created clear accountability for project leadership (enterprise architect and project managers) and actively sought

to eliminate obstacles both within and outside of the IT organization

Learned how effective leadership from senior management can facilitate a good culture and governance

Learned how a good organization change management strategy can help implement change in very complex

environments

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Case Study #3: Manufacturing

When a change in manufacturing occurs, who loses is a key

question that needs to be answered and we should keep

this in mind as we do our jobs. Consider this: When the

assembly line at a plant, came to a halt on Sept. 15, it

wasn’t just one factory that shut down. The closure could

have also brought the death of an entire industrial

ecosystem as experts had warned. More than 300 suppliers

feed into the plant including 35 in the local area. Job losses

are likely to extend far beyond the 1,100 workers directly

employed at the plant that had been producing good, high

quality products for over 44 years.

Industry

Considerations for this organization include:

• Tire manufacturing industry in north America

• Drivers for Discontinuities

o Availability and cost of assembly line labour

o Consumer demand for cheap, disposable and

more than one choice of every product

o Inability of North American management to

recognize changes in industry to respond with

vigour

o Shortage of a skilled labour force to design

products and processes to account for change

in worker demographic

Size of the Organization

The size of the organization was determined by:

number of employees: 1200 assembly line workers

with 75 management and administration staff

Location:

Single plant in small town of one hundred thousand

residents

Cultural considerations:

homogeneous, multiple unions with different

contract terms and length

Enterprise and Scope

Initial Scope: scope statement and objectives

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Core plant planning system was not Y2K compliant,

an additional 5 million dollars of investment was

required to make the system Y2K compliant

Post investment, the system will have no additional

capability from the current state

After Architecture: scope statement and objectives

Review planning capabilities required vs. provided by

the system revealed that the current planning

system does not support the needs of the plant

Over the years, several auxiliary system had been

developed in order to address the core system

short-comings in a patch work approach

An opportunity to rethink the entire planning

capability from consumer demand to fulfilment was

available

Business Complexity

Business complexity was found to be:

Complexity Rating: = 1*[tech ordinal value]+2*

[people ordinal value]+ 4*[wickedness ordinal

value]

Initial: 1*1+2*1+4*1 = 7

After: 1*2+2*3+4*2 = 16

The new architecture approach dramatically

increased the complexity however the cost and

benefits justified the new direction

Proposed Architecture

The proposed architecture is briefly described in terms of:

• Business outcome:

o Improve plant throughout: capacity vs. actual

output

o Improve fill rate from 87% to 96% linearly

over the next three years

• Capabilities affected and their performance

measures

o Real-time work in process inventory: know

the inventory at each workstation

o Machine change over time: time it takes to

change machine from production of one

product to another

o Upstream and downstream demand/supply

for every workstation

o Plan each workstation in real-time

Results

• Actual: Capability performance achieved

o Overall number of change overs increased

dramatically, however total downtime to

change overs decreased

o Plant Performance as a single performance

metric: throughput was computed in real-

time 24x7 and communicated to all involved;

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every person in the plant worked towards a

single performance metric

o Continuous improvement suggestions

increased from zero to 100s per week and

the number lean sigma teams increased

drastically

o Most new teams were led by union staff as

opposed to management

o Plant did not spend money on making current

planning system Y2K compliant instead

changed the processes enough to make the

old system obsolete

Lessons Learnt

What went well and why?

• Ability of industrial engineering/enterprise

architect team to establish a single performance

metric for the entire plant and to get every

stakeholders’ buy-in

What went poorly and why?

• Enterprise management attempted to replicate a

good practice from one plant to all others

without making the necessary adjustments for

each plant’s culture

• The program failed to rollout to other plants and

eventually innovation and staff motivation died

Lessons for the Business Transformation Leader

• Value of meaningful and effective performance indicators communicated to staff in real-time enhanced buy-in and

collaboration and is an effective method to help modify behaviour across the enterprise

• A continuous improvement culture is very fragile and it needs to be constantly nurtured and protected from forces that

need stability

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Case Study #4: Financial Services

In Canada, the federal and provincial

governments enable parents to save money

for their children’s education through a

variety of incentive programs. One such

program is to give grants of up to

$400/year/child if parents contribute a

maximum of $4000/year. During the 18 year

period before a child is ready to attend a

postsecondary institution, this money grows

tax free and often can amount to 100% of a

child’s education expenses.

Industry

Considerations for this organization include:

• As a provider of financial services to

parents: including management of

money, apply and collect all grants a child is

qualified to receive

• Divers for Discontinuities

o Other institutions such as banks, credit

unions and insurance companies were

starting to offer these services through their

local branches where parents and guardians

may already receive other services

o Changes in technology enabled new entrants

to offer many variants of these products as

they enabled the parents and guardians

the ability to finance the products

o New technologies were

enabling other companies to offer these

products at a much lower administration

cost

o As a result, the

organization’s market share was eroding,

the outsourced sales force that worked

entirely on commission was also declining

o The organization needed to

launch new financial products into the

market rapidly and increase their sales

footprint

Size of the Organization

Size of the organization was determined by:

• The number of employees: 250 employees at the

head office

Location:

• A single location in an office complex

Cultural considerations:

• homogeneous staff in the office

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• customer service and support was outsourced to a

call center in the local community

• broker based sales force worked entirely on

commission

• Since the organization operated as a non-profit, the

culture was bureaucratic, soloed and protectionist

• The new CEO needed to build a basic platform to

offer new products and acquire competitors as their

traditional market was shrinking

Enterprise and Scope

Initial Scope: scope statement and objectives

• Using their internal staff, the organization defined

the architecture and transition plan

• Replace current legacy systems (which included an

in-house developed system augmented by a number

of point solutions and SaaS models) through a single

integrated system

• Cost estimates were roughly $6 million dollars and

18 months to complete the systems; then launch the

new products

After Architecture: scope statement and objectives

• Revised architecture included:

o Define end-to-end process and implement

common processes using off-the-shelf

solutions without any customization

o Implement industry specific logic in a single

customized solution and integrate it with

other system through real-time and/or batch

process based on business value of each

integration point

• Transition plan was based on the launch of new

financial products as soon as possible and was

intended to streamlined the supporting business

process over time

Business Complexity

Business complexity was found to be:

• Complexity Rating: = 1*[tech ordinal value]+2*

[people ordinal value]+ 4*[wickedness ordinal

value]

• Initial: 1*2+2*3+4*3= 20

• After: 1*2+2*1+4*1= 8

• Strategy was to focus the entire organization and

project teams on a single outcome: the ability to

launch the product as fast as possible

Proposed Architecture

The proposed architecture is briefly described in terms of:

• Business outcome:

o Ability to launch the product and test product

acceptance through variants of the core

product

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o Stop market share erosion at the expense of

profit margins (as back end processes will not

be streamlined)

• Capabilities affected and their performance

measures

o Ability to define and manage product

o Sell and collect money

o Pay Sales Force

o Collect applicable grants from various

government sources

Results

• Actual: Capability performance achieved

o Project failed to implement required

capabilities

o It was at least two-fold over budget

o Missed the time to market by 3 years

o Most of the project team was fired

o All the funds were spent without the ability to

launch the product

Lessons Learnt

What went well and why?

• During the conceptual architecture phase, senior

management understood the target architecture

What went poorly and why?

• Senior management had a different understanding

of the transition plan

o Whereas the VP of marketing/sales and CEO

were under the impression that the focus was

to launch new products as fast as possible

while the CIO and VP of customer care

wanted administration processes to be

initially streamlined; this was a significant

disconnect

o The organization fundamentally lacked the

ability to manage transformation

o Furthermore, the organization lacked the

ability to manage external resources that

were hired to implement the transition; the

external resources were constantly overruled

by the internal management without

understanding the consequences of their

decisions

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Lessons for the Business Transformation Leader

• It is often easy to get consensus on the target architecture, it is equally important that the transition plan is well

understood by the key decision makers

• Early in the project’s life cycle, it is critical to establish decision authority and ensure compliance to decision protocols

• Do not under-estimate the internal teams’ need to build their own C.V.s (i.e. their selfish motives)

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Case Study # 5: Healthcare Insurance

The United States healthcare system relies heavily on

private health insurance which is the primary source of

coverage for most Americans. According to the CDC,

approximately 58% of Americans have private health

insurance. The primary public programs are:

Medicare, a federal social insurance program for

seniors and certain disabled individuals,

Medicaid, funded jointly by the federal government

and states but administered at the state level, which

covers certain very low income children and their

families,

SCHIP, also a federal-state partnership that serves

certain children and families who do not qualify for

Medicaid but who cannot afford private coverage.

Other public programs include military health benefits

provided through TRICARE and the Veterans Health

Administration and benefits provided through the Indian

Health Service. Some states have additional programs

for low-income individuals.

Industry

Considerations for this organization include:

• Private health insurance in United States

• Drivers for Discontinuities

o Change in regulations of how insurance is

purchased, who is to be insured and how care

providers are compensated

o A growing trend to have fully integrated

healthcare management where care providers

also provide healthcare insurance

o Public perception of fraud in healthcare and

the government’s inability to effectively

manage channels of care delivery

o Public’s willingness to be more involved in

management of health

o Social media centred technologies are

changing public perception of acceptable

service

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Size of the Organization

The size of the organization was determined by:

Size of the organization determined by:

• number of employees: 2300 employees, mostly

administrators and healthcare workers

Location:

• healthcare insurance provider in one state within the

United States with a not for profit mandate cultures

Cultural Considerations:

• Homogeneous culture with a sense of pride in

service quality and fairness

• Organization operated in siloes and business

decisions were decentralized

• For many years, organization operated with excess

cash flow (non-profit status), but in recent years net

revenue was under pressure due to increase in

healthcare costs

• Strong community involvement and support

Enterprise and Scope

Initial Scope: scope statement and objectives

• Organization wanted to change their business

change planning program from once a year to

throughout the year activity

• Improve time and cost to plan and plan efficiency –

establish the scope of the project before start and

complete the agreed upon scope on-time and on-

budget

After Architecture: scope statement and objectives

• Implement continuous planning process and deliver

the following business goals incrementally over the

next three years:

o Increase number of innovative ideas and

chatter per person per month

o Reduce time and cost to evaluate and plan

each idea

o Improve Plan efficiency: on-time, on-budget

to-scope

o Improve Plan effectiveness: Number of

transitioned capabilities enabled the planned

business outcomes

o Increase the quality of decision information:

measure quality of information used to make

a decision at each investment management

phase gate

Business Complexity

Business complexity was found to be:

• Complexity Rating: = 1*[tech ordinal value]+2*

[people ordinal value]+ 4*[wickedness ordinal

value]

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240

• Initial: 1*1+2*3+4*3 = 19

• After: 1*1+2*1+4*2 = 11

• Strategy included to engage all stakeholders who

need to deliver results as well as who will be

required to deliver the results

Proposed Architecture

The proposed architecture is briefly described in terms of:

• Business outcome

o Organization planned to invest $80 million in

new processes and technologies over the

next three years and expected $320 million

return form this investment

• Capabilities affected and their performance metrics

o The following subset of business

transformation capabilities were targeted for

improvement to enable the above defined

business outcome:

Strategic panning

Enterprise architecture

Enterprise IT and LOB architecture

Portfolio management

Program management

System development and

maintenance life cycle

IT service management

Enterprise IT governance and security

Learning organization

Results

Actual: Capability performance achieved

o Program failed to deliver on most of the

deliverables

o Eighteen months after initiation, the program

was transitioned to an internal team without

agreement on scope and timeline

Lessons Learnt

What went well and why?

Internal program leadership team was engaged and

supportive; they did everything they could to help

ensure a successful outcome

What went poorly and why?

Senior IT leadership failed to understand the

significance of the continuous planning capability

Management wanted to create an accountable and

transparent culture, however, they lacked the

political capital and moral authority on rank and file

staff in IT to align warring factions of various

disciplines towards a focused direction

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Lessons for the Business Transformation Leader

With senior management’s assistance, clearly define milestones and how much time to allocate to them

o If consensus isn’t achieved within this allocated time, call a time-out and allow the project team to engage the

program sponsor

Program sponsor must be the role who needs to deliver the expected business outcome; they are not the role who will

own the required capabilities

Balance the organization’s need, management’s desire and people’s ability to accept disruptive change; these conflicting

requirements must be managed continuously

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Exercise: Define a Strategy to Manage Business Complexity

Scenario

Outline a business scenario based on a previously completed project with a significant architectural component; the scenario

should include:

Program Name and Sponsor

Business outcome: [ensure it is measurable and linkable to the enterprise vision and strategic intent]

Enterprise capabilities affected

IT and LOB capabilities affected

Performance measures (and their metrics) for each capability: current and target

Outline how the improved capability performance will help deliver the intended business outcomes

Analysis

Consider Table 31: Architecture Complexity Matrix and assess the overall architecture complexity in terms of:

Technical

People

Wickedness

Define the initial and target complexity. To reduce this complexity from the current to the target, define the following:

What must be done

Whose help will you need

How will the required resources and their commitment be procured?

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Chapter 7: An Application of Business Transformation

“Experience is simply the name we give to our mistakes.”

Oscar Wilde

Abstract

This section is work in progress and will be further developed over time.

Through a collaborative effort of a large number of practitioners, we are

working to define a complete enterprise architecture for an organization that

has taken on the near-impossible mission of improving population health.

Specifically, this exercise will demonstrate thought process needed to

translate enterprise strategic intent into capabilities and a portfolio of

transformation projects.

Details of this and other workshops are available through our Advanced

Applications of Enterprise IT Architecture Course16 available on our

website.

16

http://www.qrs3e.com/landingpages/eait.html

Chapter 7: An Application of Business Transformation

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Profile of the Organization

A Healthcare delivery company in North America, Population Health, operates 11 primary care and speciality clinics, 4

hospitals, 2 long term care facilities, 5 rehab centres and has its own insurance company. The company employs 6000 care

providers and annually serves 2.5 million members. All employees except the medical doctors are staff and the company is

affiliated with one medical, nursing pharmacy school. All service locations are within a 200 mile radius and the company

focuses on care for the chronically ill segment of the population.

Due to changes in regulation, cost of care and need to improve quality of care that matches client and family expectations, the

company needs to rethink its entire operating model and supporting capabilities and plan a portfolio of investment for it to

become a leader as an affordable and highest quality of care provider in the market.

Defining Architecture through Workshops

The architecture defined in subsequent workshops is illustrative only and is not intended to be comprehensive.

This chapter includes four workshops that are designed to provide step by step directions on how to define Architecture for the

Enterprise as well as provide insight on how to leverage Information and Communication Technology (ICT) capabilities to help

the enterprise achieve its strategic intent.

Workshop 1: Define Enterprise Capabilities

Workshop 2: Define Business Strategy

Workshop 3: Develop Roadmap, Transition plan and portfolio of Projects

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Workshop 1: Enterprise Capabilities

About the Workshop

Translate Enterprise (an Enterprise is defined as a complete

organization with its own profit and loss accountability)

Strategic Intent into Enterprise Capabilities and establish

the relationship between Enterprise Goals and Performance

of its Enterprise Capabilities.

Goal: Define the landscape of Enterprise Capabilities

Customer: CEO

Contributors: CEO’s Direct Reports

Skills Required: Open CA Level 3 – minimum of two

related industry experience

Why: This define the Organization's DNA. Think

about if all the coaches on a football team don’t

know the talent they have.

Deliverables - what:

• Organization Vision and Strategic Intent

• Value Chain

• Enterprise Capabilities – customer facing and

supporting capabilities. Customer facing

capabilities are directly exploited to deliver Final

Value Product.

• For each capability – define measures and

compute current performance metrics

• Enterprise Capability Map – group capabilities

into broadly define categories

• Relationship Enterprise Capabilities and Business

outcome

Application of EA Methods

The following is a brief list of methods applied to complete

the required deliverables:

Value Chain, Enterprise Capabilities, Five Forces

Analysis, Threats and Opportunities

Strategic Positioning – identify capabilities that the

enterprise would exploit to lead the industry

Deliverables

Organization Vision: provide the highest quality and

affordable care to our members.

Strategic Intent: be the # 1 service provider to our

segment of members measured through Health

Outcome for every dollar spent for all chronic diseases.

Value Chain:

Enterprise Capabilities

o Customer Facing Capabilities and Performance

Measures

o Capabilities Measures and Outcomes

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Enterprise Capability Map

This map groups the capabilities into 6 broad

categories. The criteria for categorization are similar to

characteristic of what constitutes improvement.

o Transform Health Care Delivery: ability to

change the organization.

o Information Technology and Protection of

Information Assets: ability to manage

information with appropriate due diligence, cost,

and agility

o Delivery Institution Operations: ability to execute

basic operations

o Back Office Services: back office services that

related to execution of clinical Services

o Clinical Services: clinical Services such as OR,

ICU, (specific to each organization)

o Customer Experience

Enterprise Capabilities and Business Goals

Table 32: Enterprise Capabilities and Business Outcome

Capabilities

Capability Performance

Business

Outcomes

Impact

Transform Health Care Staff Engagement New Investment ROI Unable to adjust enterprise

resources to changing market

conditions Time and Cost to Plan Enterprise Agility

Change Plan Efficiency

Change Plan Effectiveness

Decision Information Quality

Information Technology and

Protect Information Assets

Total Cost Cost for SLA Cost of IT

Technology enabled Agility

Enterprise Operations Total Cost [Actual and

Benchmark]

Staff Engagement

Operations Efficiency

Cost per service

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Capabilities

Capability Performance

Business

Outcomes

Impact

Back Office Total Cost per Service

Staff Engagement

Cost per service

Operations Efficiency

Lead Time

Clinical Services LOS [Benchmark and Actual] Health Outcomes Health Outcomes not

achieved or at higher price

Readmission Rates

Customer Experience Patient Satisfaction Poor Health Outcomes

Patient Engagement

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Workshop 2: Business Strategy

Goal of the Workshop

Explicitly translate the scope of Business Strategies and

instinctual level investment portfolio

Customer: CxO [executive team responsible for

business outcomes]

Contributors: CxO, Direct Reports and industry

subject matter experts

Skills Required: Open CA Level 3 – industry

experience

Why: explicitly define scope of Business Strategies

and enable a culture of Transparency and

Accountability

Deliverables:

Support Capabilities -> what you need to deliver

Enterprise Capabilities

Strategic Themes and Affected Enterprise and

Support Capabilities

Ideal Transition Plan for each capability, and for

the Business Strategy

High Level investment Portfolio Plan – is it

possible and will the meet results

Deliverables

Support Capabilities

o Transform Health Care Delivery: ability to

change the organization.

Capability and Performance Measures

o Information Technology and Protection of

Information Assets: ability to manage

information with appropriate due diligence,

cost, and agility

o Delivery Institution Operations: ability to

execute basic operations

o Back Office Services: back office services that

related to execution of clinical Services

o Clinical Services: clinical Services such as

OR, ICU, (specific to each organization)

o Customer Experience

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Application of TOGAF®

TOGAF is a bit silent when it comes to establishing relationship between Strategy and Enterprise Capabilities

There are a lot of approaches on how to establish strategy – but they are all from top down.

For strategy to be executable, we also need bottom up linkage with what comes from top down.

That is the value of Enterprise Architecture in strategy definition

Deliverables

Strategic Themes: Executive

Outcomes: Executive

Affected Enterprise Capabilities

Affected Supporting capabilities

Performance targets

EA – assess the impact of changes to the capabilities on People, Process and Technology

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Workshop 3: Architecture for a Business Strategy

Known:

Business Strategy implies that we are looking for different outcome than what we have today: example improve

customer satisfaction by 30% from 2012.

We know the capabilities leveraged to address customer needs. Each capability has – people, process and technology as

a component. Therefore if we are looking for different performance from current capabilities, some aspect of the

capability must change.

The architecture for a strategy considers all possible options to improve capability performance including changes to

technology aspect. But often it should not be the first thing that changes.

Business Strategy Document should include:

o Affected capabilities, their current and target performance and timeline by when these targets must be achieved.

Goal of the Workshop

Customer: Strategy Owner: VP of HR and peers are all VPs

Contributors: Direct Reports and Mid Managers, capability owners

Skills Required: Open CA Level 2 – background in specific capabilities affected,

Why: Business Case – two purpose: execute the right strategy and execute it right (how will I know what is in scope,

out of scope, etc.)

Deliverables:

o For each Capability: define Business – process and people, Information, Data, Application, Infrastructure As-Is

and To-Be

o Integrate dependencies within the strategy

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o Transition Plan – Ideal and Pragmatic

o Required Resources and Cash flow

o Portfolio of Projects Submission

o Quick Win:

Senior management make decisions along the way: help them make the right choices.

Deliverables

Reference to TOGAF

• ADM – elicit and process architecture requirements

• Continuum – discover if architecture for a required capability exist

• Content Framework – how to document

• Skills Framework – how to assign the right architect and manage the architecture delivery process

In our example we have four capabilities that must work together to deliver the overall business benefits:

Industrialize EBP

Learning Organization

Real-Time Capability Performance Measurement

Engaged Patient and Family

Workshop Output

Fundamentals of a Learning Organization

[as an EA you must know something about the capability before you can start architecting. Research skills are key]

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Learning Organizations are organizations where people continually expand their capacity to create the results they truly

desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people

are continually learning to see the whole together.

The dimension that distinguishes learning from more traditional organizations is the mastery of certain basic disciplines or

‘component technologies’. The five dimensions that Peter Senge identifies are said to be converging to innovate learning

organizations; they are:

1. Systems thinking: it is concerned with a shift of mind from seeing parts to seeing wholes, from seeing people as

helpless reactors to seeing them as active participants in shaping their reality, from reacting to the present to

creating the future

2. Personal mastery: it is the discipline of continually clarifying and deepening our personal vision, of focusing our

energies, of developing patience, and of seeing reality objectively’

3. Mental models: The discipline of mental models starts with turning the mirror inward; learning to unearth our

internal pictures of the world, to bring them to the surface and hold them rigorously to scrutiny. It also includes the

ability to carry on ‘learningful’ conversations that balance inquiry and advocacy, where people expose their own

thinking effectively and make that thinking open to the influence of others

4. Building shared vision: The practice of shared vision involves the skills of unearthing shared ‘pictures of the future’

that foster genuine commitment and enrolment rather than compliance. In mastering this discipline, leaders learn

the counter-productiveness of trying to dictate a vision, no matter how heartfelt.

5. Team learning: The discipline of team learning starts with ‘dialogue’, the capacity of members of a team to suspend

assumptions and enter into a genuine ‘thinking together’.

Reference: Senge, Peter, The Fifth Discipline, 1990.

Architecture Requirements

Capability: Learning Organization

Capability Performance Measures

o # of Improvement Opportunities submitted and improved /staff [staff engagement index] 0

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o Time and Cost to review each suggestion and linked to projects 0

o # of projects delivered on-time and on-budget and to scope

o Business Results : [planned vs. actual]

o Quality of Decision Information at each phase gate

Since architecture for a strategy is completed at conceptual level of detail, therefore architecture requirements must be

at conceptual level of detail. To elicit conceptual level architecture requirements, identify stakeholder who can tell you

what prevents the Learning Organization capability to perform at desired level. Typical Stakeholders for conceptual level

of detail are Direct Reports of the capability owner and his/her peers. Sample example:

Stakeholder Architecture Requirement – obstacles

Sales and

Marketing

HR put a suggestion box in the cafeteria a few years ago, I am

still waiting for somebody to talk to me about my suggestion.

IT Apps Manager It looks like make work activity, I have real work that needs t get

done

Even if I made a suggestion it will go no where

Lean Sigma

Manager

If we actually implemented this, we will get thousands of

suggestions, and we won’t know what to do with them.

Note: typical set of architecture requirements are in 100s. Often these requirements conflict with each other. It is the

architect’s responsibility not to be satisfied with an architecture that is a compromise among conflicting requirements, but

transcend them to define a new opportunity space. Remember – one of the deliverables of architecture is to truly understand

what the real obstacles are.

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Develop Architecture

Business Architecture

[Process, people and process

performance and impact of

improved process on the desired

outcome]

Use TOGAF ADM to process

architecture requirements. We

may use more than one ADM

phase to process a single

requirement. Example – in phase

B, business architecture and

required performance indicators

may propose a process flow,

however organization readiness in

Phase E may not be able to

support the new process.

Business Architecture Artifacts:

Swim lane – diagram with

roles, process description

Performance of each process

# of people within each role, organization design

Example of a swim lane diagram:

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Data Architecture

Entities and their relationship – OLTP

and OLAP

Data Conversion mapping and

Strategy

Data Management Life cycle

Capability performance data

Example of entity relationship for OLTP

Application Architecture

Typical Artifacts are

Process view

Place view

Time view: synch, latency

Interoperability

People view

Example: Place view

Notice the similarities between the application and infrastructure artifacts.

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Application Interoperability Model

Degree 1: Unstructured Data Exchange

Degree 2: Structured Data Exchange

Degree 3: Seamless Sharing of Data

• 3A: Formal Message Exchange

• 3B: Common Data Exchange

• 3C: Complete Data Exchange

• 3D: Real-time Data Exchange

Degree 4: Seamless Sharing of Information

App – Gateway

Server

NODR LDAP CM

App –

Gateway

Server

WS call

NODR

LDAP

3

CM

3 3 3

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This model is particularly very useful when you model the entire application suite as we will do in SIB – WS4

Infrastructure

Physical installation of each component

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Gaps and Transition Plan

[After you completed the business, data, application, technology architecture for each capability, then aggregate all the gaps]

Gaps Summary

Capability Gap Impact on the Outcome

Transition Phase

Learning Organization

People do not believe that there

suggestions will be reviewed, looked at

and/valued

There will be very few

suggestions

Phase 1

There is no effective org structure make

learning org structure sustainable

Cannot sustain over

the long haul.

Phase 1

Industrialize EBP

Real-Time Capability Performance

Measurement

Engaged Patient and Family

Develop Ideas on how to address these gaps. Group changes into following three broad categories:

People’s behaviour change without changing process and technology

Process change without changes in technology

Technology Change

Solutions

Learning Organization

o learning organization principles embraced by the CEO

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o develop process that can handle what CEO is learning and actively engage the people

o make the suggestion portal visible to all – suggestions are entered by the CEO learned through management by

walking around

o scale the system

o CEO continues on the management by walking around

Real-Time Evidence of Performance

o Portal of suggestions and their status visible. Recognize impact the resulting projects made

Overall Dependencies

[All the work translates into

one pager]

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The transition plan, often includes investment Plan – cash flow

Check List of Deliverables

• For each Capability: define Business – process and people, Information, Data, Application, Infrastructure As-Is and

To-Be

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• Integrate dependencies within the strategy

• Transition Plan – Ideal and Pragmatic

• Required Resources and Cash flow

• Portfolio of Projects Submission

• Quick Win:

• Senior management make decisions along the way: help them make the right choices.

Chapter 8: Business Transformation Templates and Samples

262

Chapter 8: Business Transformation Templates and

Samples

“There are no secrets to success. It is the result of preparation, hard work, and learning from failure”.

Colin Powell

Abstract

Templates and samples are containers of information and what they need to

convey is meaningful insight into the business decisions that need to be

made. This section contains templates and samples of deliverables and

artifacts that are commonly created to support the Business Transformation

capability.

The list presented is a work in progress and will be added to and updated

over time.

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Templates for Deliverables and Artifacts

A common request made by those doing the Business Transformation work is for templates and samples to capture the

necessary information needed to further develop the required transformation. Templates and samples are just containers of

information. When it comes to making decisions to further the transformation, the most important priority is to provide

meaningful and sufficient information for the immediate decision point.

As an illustration of sufficient information quality, consider an organization that wishes to augment their existing social media

capability to a larger target audience. The value that this would provide the organization was estimated to be an increase in

revenue of $10 million after the first year. Senior management would like further information about the cost to realize this

value and have requested that this information be provided within 3 days. Given this timeframe, we will not be able to

estimate the total cost within 10%; the decision point is not to implement the changes but to determine if we have a valid

business case for further exploration.

In this timeframe, with the right expertise and knowledge of what is possible, we can estimate that the cost to the organization

in obtaining the value to be between $8-10 million with an expected cost of $8.5 million. On the surface, this initiative has

adequate assurance of being viable (value is greater than cost) and increased investment to further the information quality –

such as creating a pragmatic roadmap – may be requested. If we had attempted to create a pragmatic roadmap, we would

not be able to complete one within 3 days and we would not meet the expectations of senior management.

For these reasons, knowing the required information needed for the business decision will be the guide to the quality of

information that we provide to our stakeholders and decision-makers.

The following templates and samples are provided to give the reader an understanding of what is produced throughout the

capability life cycle.

Notes for the following table include:

“DEL” indicates a deliverable, information that can be shared with decision-making and consulted stakeholders

“ART” indicates an artifact, information that can be understood by Business Transformation Professionals that support

the information provided in the deliverable

G”X” where “X” stands for the phase the deliverable/artifact is created; “X” can have a value of 0 to 3

Chapter 8: Business Transformation Templates and Samples

264

Table 33: Documents that are typically produced during the Capability Life Cycle

Document Description Template Sample

Work that starts at G0

1 DEL.G0.01: Organization Vision and

Strategic Intent

Captures the Architecture Vision and how it

relates to the Strategic Intent

DEL.G0.01_T

EMPLATE

DEL.G0.01

_SAMPLE

2 ART.G1.01: Value Chain and

Enterprise Capabilities

Describes the components of the capability

and value chain.

ART.G1.01_T

EMPLATE

ART.G1.01

_SAMPLE

3 DEL.G1.01: Enterprise Capabilities

This document defines the Enterprise’s

capabilities and establishes how their

performance affects the business outcomes

DEL.G1.01_T

EMPLATE

DEL.G1.01

_SAMPLE

4 DEL.G1.02: Business Strategy and

Capabilities Map

Provides understanding of how the Enterprise

Capabilities achieve Business Strategies

DEL.G1.02_T

EMPLATE

DEL.G1.02

_SAMPLE

5 DEL.G1.03: Strategy Quality Checklist

Determines if the Strategy captures the

needed elements

DEL.G1.03_T

EMPLATE

DEL.G1.03

_SAMPLE

Work that starts at G1

6 ART.G2.01: Capability or Strategy

Transition Architecture

Provides a conceptual level of detail ART.G2.01_T

EMPLATE

ART.G2.01

_SAMPLE

7 DEL.G2 .01: Architecture Definition

Document

Provides definition to contextual and

conceptual architecture

DEL.G2.01_T

EMPLATE

DEL.G2.01

_SAMPLE

8 DEL.G2.02: Transition Plan and

Business Case

Captures content required for G1 Phase

Gate work start

DEL.G2.02_T

EMPLATE

DEL.G2.02

_SAMPLE

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265

Document Description Template Sample

9 DEL.G2.03: G2 Phase Quality Checklist

Provides an active assessment of the current

roadmap in its ability to be realized

DEL.G2.03_T

EMPLATE

DEL.G2.03

_SAMPLE

10 ART.G2.02: Views of a Conceptual

Architecture

Provides the views needed to express a

logical architecture

ART.G2.02_T

EMPLATE

ART.G2.02

_SAMPLE

Work that starts at G2

11 ART.G3.01: Transition Architecture for

G2 Start Projects

Describes the transition points and state of

the capability that needs to be achieved.

12 DEL.G3.01: Projects Charter and Plans

Describes the projects and plans needed to

realize the necessary capability

improvements.

13 DEL.G3.02.xx: System Development

Life Cycle Deliverables

Describes content need to develop the

required logical architecture. Examples of

this content are information typically

contained in the BRD, Function and Technical

Specifications and so on.

DEL.G3.02.b

rd_TEMPLAT

E

DEL.G3.02

.brd_SAMP

LE

14 DEL.G3.03: Change Request

Describes the needed change that needs to

be implemented.

DEL.G3.03_T

EMPLATE

DEL.G3.03

_SAMPLE

15 DEL.G3.04: Change Management

Quality Checklist

Describes the quality factors that need to be

assessed to determine the information

quality available to implement the change.

DEL.G3.04_T

EMPLATE

DEL.G3.04

_SAMPLE

Work that starts at G3

16 DEL.G4.01: Capability Performance

Governance

Describes the capability performance as

needed for governance of the capability in

the production environment.

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266

Document Description Template Sample

17 DEL.G4.02: Performance Metric and

Continuous Improvement Plan, CBP

Capability Maturity Assessment [live

document]

Provides the capability performance metrics

over time and the governance actions and

decisions that have been made to enable the

capability to continue in providing value.

Continuous Planning Work Products

18 DEL.P.00: Opportunity/Idea

An innovation submission.

19 DEL.P.01: Value Statement

The value that needs to be realized by the

existing capability.

DEL.P.01_TE

MPLATE

DEL.P.01_

SAMPLE

20 DEL.P.02: G0 Work Plan

The activities that need to be performed at

the Strategic level.

21 DEL.P.03: G1 Work Plan for G1 Phase

Gate Start

The activities that need to be performed at

the G1 Phase.

22 DEL.P.04: G1 Work Plan

The activities that need to be performed at

the G1-G2 Phase.

23 DEL.P.05: G2 Work Plan

The activities that need to be performed at

the G2-G3 Phase.

24 DEL.P.06: G3 Work Plan

The activities that need to be performed at

the G3-G4 Phase.

Next Steps

267

Next Steps

1. Gain hands-on experience and skills from the classroom; find out more about how to execute Business Transformation

services from our training courses:

Advanced Applications of TOGAF® and Enterprise Architecture: http://www.qrs3e.com/landingpages/togaf.html

Advanced Applications for Enterprise IT Architecture: http://www.qrs3e.com/landingpages/eait.html

Advanced Applications for Business Architecture: http://www.qrs3e.com/landingpages/eba.html

2. Join our LinkedIn Community to participate in our discussion and gain new insights

Business Transformation made straight forward

If you liked this book, feel free to share it and distribute it to anyone else that will benefit, you can also reach out to us at:

transformation@qrs3E.com

http://qrs3E.com

Thank You!