Design of Business in an Age of Disruption
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Transcript of Design of Business in an Age of Disruption
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 1
BUSINESS BY DESIGN OCTOBER 2015 Craig Martin
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 2
DISCIPLINE CONFUSION CONFUSION REIGNS AROUND WHICH DISCIPLINES ARE USED
FOR WHAT SITUATIONS
STRATEGIC PLAN MARKETING PLAN OPERATIONAL PLAN
DELIVERY & EXECUTION OPERATIONS
Planning Delivering Operating
PORTFOLIO, PROGRAM AND PROJECT MANAGEMENT BUSINESS ARCHITECTURE
ENTERPRISE ARCHITECTURE PRODUCT & SERVICE DESIGN
BUSINESS PLANNING SOLUTIONS ARCHITECTURE
SOLUTIONS DEVELOPMENT
ENTERPRISE DESIGN
BUSINESS ANALYSIS
Environment analysis / SWOT, competitor / Business motivation / Product and portfolio analysis / Strategic Options
Market analysis and forecasting Model the business / Evaluate and select strategy / Risk and funding analysis
Project, portfolio and program management, solutions delivery
Daily operations, run the business
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 3
SOLVING PROBLEMS
ABSTRACT
CONCRETE
Insight: “I want a beautiful
environment”
Opportunity: Paint the wall,
Move, Buy new furniture, Hand a
picture
Problem Statement:
“I need a hole”
Solution Statement: “I need a drill”
PROBLEM SOLUTION
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 4
THE EMERGENCE OF ENTERPRISE DESIGN
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the problem from a human centred
perspective
Prototyping and testing for
disruptive options
Understanding drivers, pressures, environment and
working out motivation
Developing operating models and solutions
DE
SIG
N
THIN
KIN
G
AR
CH
ITEC
TUR
E
THIN
KIN
G
EN
TER
PR
ISE
DE
SIG
N
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 5
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the problem from a human centred
perspective
Prototyping and testing for
disruptive options
Understanding drivers, pressures, environment and
working out motivation
Developing operating models and solutions
NAVIGATING THE QUADRANTS APPROACHES TO CHANGE
SOLUTION FOCUSSED TRANSFORMATION FOCUSSED
DISRUPTION FOCUSSED DELIVERY FOCUSSED
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 6
DESIGN MINDSET
UNCERTAINTY / PATTERS / INSIGHTS CLARITY / FOCUS
RESEARCH CONCEPT DESIGN PROTOTYPE
DISCOVER DEFINE DEVELOP DELIVER
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 7
ABSTRACT
CONCRETE
PROBLEM SOLUTION
NAVIGATING THE QUADRANTS APPROACHES TO CHANGE
DISCOVER DEFINE DEVELOP DELIVER
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 8
…adisciplinethatusesdesigner’ssensibilityandmethodstomatchpeople’sneedswithwhatistechnologicallyfeasibleandwhataviablebusinessstrategycanconvertintocustomervalue…
Tim Brown, CEO, IDEO
DESIGN THINKING DEFINITION
› Quoted from ‘The Design of Business’, Roger Martin
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 9
THREE LENSES OF HUMAN CENTRED DESIGN
StartHere
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 10
DECISIONS ABOUT ‘PROBLEMS’
‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone
Unknowable: The relationship between cause and effect is impossible to determine as they constantly shift. In chaos, it is necessary to act first and then sense through the result of action how to further respond. Understanding the problem comes later. This is the domain of rapid response. Example: Natural disasters
Unknown Problems: The problem is in constant flux as a change to the situation causes ripple effects and unpredictability in other aspects. Information is often incomplete. Rather than implementing a solution, devising a concept, testing, iterating and then responding is needed. Problems often become complex when human behaviour is a significant factor. This is the domain of emergence. Example: Schooling experiences, organisational change management, traffic management
Known unknowns: A complicated problem can have multiple right solutions. Complicated problems are understood, analysed and then responded to. It often requires expertise to solve and is largely process driven. Solving a complicated problem often requires the right expertise along with the right tools. In this realm you may know you have a problem but may not be able to solve it alone. This is the domain of expertise. Example: Fixing a car, constructing an aeroplane.
Known knowns A simple problem is one of cause and effect. The solution is rarely disputed. The problem can be categorised, understood and a response devised based on the information. This is the domain of best practice. Example: 1+1 = 2, solving a jigsaw puzzle.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 11
FOUR ORDERS OF DESIGN
› Business Design, › Organisation Design
› Service Design, UX Design, Instructional Design,
› Process Design
› Richard Buchanan, (1992) Wicked Problems in Design Thinking
› Product Design, Engineering, Architecture
› Graphic Design, Visual Design
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 12
BUSINESS PREDILECTION
› ‘The Design of Business’, Roger Martin
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 13
TOOLS FOR BUSINESS DESIGN: A SELECTION
› DISCOVER › Literature Review
› Time Machine › Shadowing
› Touchstone Tours › Service Safari
› A Day in the Life › Diary Studies
› The Five Whys › Journey Maps
DEFINE
Mapping Complex Situations
Stakeholder Map
Customer Persona
Empathy Mapping
Mind Mapping
Scenarios
Affinity Mapping
How Might We
DEVELOP
Bodystorming
Collaborative Ideation
Co-creation
Storyboards
Image Boards
Prototyping
Heuristic Evaluation
Critique Circle
DELIVER
Rapid Iterative Testing
A/B Testing
Usability Testing
Ergonomic Analysis
Value Opportunity Analysis
Feedback Review
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 14
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition Influencers
Values Drivers
Value System Engineering Business Scenario Value Proposition
Business Model Canvas
Business Motivation Model
Value Chain Capabilities
Cross-Functional Capabilities Capability Overlays
Roadmap & Planning
MOVING THROUGH THE QUADRANTS
DISCOVER DEFINE DEVELOP DELIVER
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 15
THE VALUE CYCLE THE QUICKEST WAY TO GET ADOPTION FOR COMPLEX ORGANIZATIONS
What is value?
How is value created?
How is value measured
and reported on?
How is value delivered?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 16
YOU CANNOT DEVELOP MOTIVATION OR HYPOTHESES WITHOUT FIRST UNDERSTANDING VALUE
ALIGNING VALUE TO PERFORMANCE
BUSINESS UNIT BUSINESS UNIT BUSINESS UNIT BUSINESS UNIT BUSINESS UNIT
Process Performance Indicators
PRODUCT DEVELOPMENT RETAIL SALES RETAIL PLANNING SOURCING
Objectives Drive Key Performance Indicators (SMART) Financial
Operational
Data Quality
Indicators
Business Flows
FLOW OF GOODS, FLOW OF MONEY, FLOW OF INFORMATION VALUE CHAINS / CROSS FUNCTIONAL CAPABILITY / VALUE STREAMS
Critical Success Factors
Strategic Business Goals
Value Monitoring
VALU
E REPO
RTIN
G
PERFO
RM
AN
CE R
EPOR
TING
Performance Monitoring
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 17
UNDERSTANDING THE DIMENSIONS OF VALUE AND PERFORMANCE
AND REALISING THESE THROUGH THE INFORMATION MANAGEMENT DISCIPLINE
What value is created?
How is value created?
How is value measured?
BUSINESS SERVICES &
SPI’S
BUSINESS PROCESSES &
PPI’S
OBJECTIVES & KPI’S
BUSINESS GROUP CSF’S
BUSINESS AREA STRATEGIC
GOALS
ENTERPRISE STRATEGIC
GOALS
Increase Turnover
Customer Service: Increase Customer
Satisfaction
Customer Group: Improve Self Service
Customer Group: Improve telephone
support
KPI: Customers may be diverted by a
maximum of 3 times
KPI: Customers shall wait no longer than 2
minutes
PPI: Time from reception to customer
handling
SPI: Service Quality measured in
customer satisfaction
DQI: Data quality measured in
customer to product alignment
Accounting: Reduce administration costs
Sales: Increase new customers into retail
outlets
Capture customer details and product
category prior to handling
VALUE REPORTING
PERFORMANCE REPORTING
CAPABILITY: PEOPLE, PROCESS, TOOLS, DATA
STRATEGIC REPORTING & DECISION MAKING
OPERATIONAL REPORTING & DECISION MAKING STRATEGIC / EXECUTIVE SCORECARDS OPERATIONAL COCKPITS
TACTICAL REPORTING &
DECISION MAKING
MGMT. DASHBOARDS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 18
Increase price Increase volume Improve mix Improve process Reduce cost of inputs Improve warehouse utilisation Increase productivity Decrease staffing Optimise scheduling Optimise physical network Decrease staffing Use alternative distribution Lower Customer Service & Order Management Costs Lower I/S costs Lower Finance / Accounting costs Lower HR costs Improve capital planning/ investment process Reduce inventories Reduce A/R increase A/P
• Profit-driven marketing efforts: • Target “best” customers • Offer “best” product mix • Improve pricing management
• Proactive production planning for inventory management
• Most profitable capacity allocation/utilisation
• Reduced sales management layers • Focus on high-profit accounts • Improved inventory flow visibility • Lower transportation costs • Higher facilities utilisation • Less “fire fighting” • Better carrier evaluation/
management
• Higher quality Customer Service • Improved Supply Chain visibility • Improved order fill rates • Significantly lower cost • More consistent service • Faster problem resolution
• Improved capital stewardship • Increased capital productivity • Reduced inventory investment • Reduced receivables investment
o Automated PO requisitions o Improved information for
evaluating vendors o Automation of some scheduling
functions
o Single point of entry eliminates data re-entry and improves accuracy
o Faster data reconciliation o Automated billing processes o Automated payroll processes
o Moderately lower safety stock inventory
o Moderately improved A/R and A/P management
Increase revenues
Decrease costs
Reduce selling costs
Reduce distribution costs
Reduce administrative
costs
Increase gross profit
Decrease operating expenses
Capital deployment
Cost of capital
Increase net operating profit
after tax (NOPAT) (I/S)
Improve capital allocation (B/S)
Enterprise Value Map
BUILDING VALUE MODELS USING DRIVER TREES VALUE LEVERS
TRANSFORMATION BENEFIT (Outcome)
AUTOMATION BENEFIT
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 19
VALUE IS ACHIEVED THROUGH COHERENCY
Companies with a High Level of Cohesion affect EBIT Directly
4%
8%
12%
16%
20%
24%
28%
32%
0 20 40 60 80 100 120
EBIT
MA
RG
IN, 2
003-
2007
CAPABILITIES COHERENCE SCORE
COCA-COLA
WRIGLEY
PEPSICO
KIMBERLY-CLARK
SARA LEE
CONAGRA MERCK
UNILEVER
H.J. HEINZ
KRAFT
GENERAL MILLS
CLOROX
CAMPBELL SOUP COMPANY
P&G
*Adapted From “The Coherence Premium” – Harvard Business Review, June 2010
Acoherentorganiza.onisonethatisthoughtofand
executedasawhole
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 20
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition Influencers
Values Drivers
Value System Engineering Business Scenario Value Proposition
Business Model Canvas
Business Motivation Model
Value Chain Capabilities
Cross-Functional Capabilities Capability Overlays
Roadmap & Planning
MOVING THROUGH THE QUADRANTS
DISCOVER DEFINE DEVELOP DELIVER
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 21
WHEN DOES DISRUPTION OCCUR?
› First stage of disruption, an innovator makes a product that is much more affordable and simpler to use (for the user) than what currently exists.
› The second stage of disruption is when additional technological change is added which makes it simpler and less expensive to build and maintain the products.
› The new change eventually displaces the existing market and value network, resulting in a radical improvement in performance.
Disruptive technologies take a while to change the market
Christensen, Clayton M. (2010-09-06). Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns
PE
RFO
RM
AN
CE
TIME
market
Market for old technology
Market for new technology
New replaces old technology
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 22
‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD
PER
OR
MA
NC
E
TIME
ENTERPRISE
BRAND PLATFORM
BUSINESS MODEL
BUSINESS CAPABILITIES
PRODUCT
DISRUPTIVE FORCES REQUIRE US TO RE-INVENT AT A NUMBER OF LEVELS
Organisations…and architects need to be able to provide the means to enable this change
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 23
VALUE SYSTEM DESIGN
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 24
THE KNOWLEDGE FUNNEL
Non-core but complex - Outsource
Innovation, chaos & unresolved mysteries
HIGH
HIG
H
LOW
LOW
Must be done but adds little value to product or services
Very important to success, high value added to products and services
STRATEGIC IMPORTANCE & VALUE
CO
MPL
EXIT
Y A
ND
DYN
AM
ICS
Complex negotiation, design, or decision process
Many business rules; expertise involved
Some business rules
Procedure or simple algorithm
Non -Core Competencies
Core Differentiating Competencies
Everyday, highly repeatable and
automated
Make repeatable and reliable to gain efficiency
Core Competitive Competencies
THE RESULTS OF DISRUPTION THE SPEED THROUGH THE KNOWLEDGE FUNNEL IS ALSO INCREASING
Source: Adapted from “Business Process Change” by Paul Harmon
GOAL: Reliably produce consistent, predictable
outcomes
GOAL: Validity- Produce outcomes
that meet desired objectives
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 25
RE-INVENTION NEEDS TO OCCUR ACROSS THE FULL BUSINESS MODEL.
NEW MIXES NEED TO BE IDENTIFIED
Leading and Best Practice Research, 2011/2012 Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 26
THE NATURE OF INNOVATION
IMAGETOBEMODIFIEDTOINCREASETEXTSIZE
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 27
DIGITAL ECONOMY General Principles of the Digital Economy. These are the principles of Digital Strategy Enablement
“RENEWABILITY” You can renew data, but not exhaust it. Once created it can be used over and over again. It is a renewable resource
“UNIVERSALITY” Everyone can access the same data simultaneously, and use it for a completely different reason
“MAGNETISM” Information grows in value as more people absorb it, which, in turn, creates a network effect, drawing more people who want to learn. Metcalfe's law
“LACK OF FRICTION” The more smoothly information flows, the more valuable it is.
“VULNERABILITY” Criminals can harm or misuse information. They can destroy it, ruin it or steal it (as in identity theft). In this one sense, data is like physical goods
Larry Downes - Three laws direct the revolutionary changes wrought by computer technology.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 28
“THE LAW OF DISRUPTION”
The dissemination of change is “uneven.” Various elements of society struggle to keep up with rapid technological change.
Technology changes exponentially, but social, economic and legal systems change incrementally” and struggle to keep up.
Larry Downes - Three laws direct the revolutionary changes wrought by computer technology.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 29
DISRUPTION ALTERS ENTIRE VALUE NETWORKS Example: Disruption will alter the entire value chain and place the student at the centre
Faculty & Staff
CONTENT
CLASSES
SOCIAL INTERAC
TION LECTURE
RS
STUDENTS Students
& Social Interaction
CONTENT
CLASSES
FACULTY
STAFF
FACILITATORS
TeachatSCHOOLanddoHomeworkatHOME TeachatHOMEanddoHomeworkatSCHOOL
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 30
DIGITAL DISRUPTION IS REDUCING THE
DELAY Action Reaction
Immediate Feedback
Delayed Feedback
B
R
“Lifeisindeedspeedingup,butmansabilitytodealwithit,isslowingdown”
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 31
THIS ACCELERATION
IS PUTTING PRESSURE ON
CURRENT BUSINESS MODELS
Technology commoditising
from below
Business roles taking on more architecture accountabilities
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 32
THE RESULTS OF DISRUPTION THE COMMODITY SPACE IS GROWING, MAKING THE DIFFERENTIATION SPACE
MORE COMPETITIVE
Non-core but complex - Outsource
Innovation, chaos & unresolved mysteries
HIGH
HIG
H
LOW
LOW
Must be done but adds little value to product or services
Very important to success, high value added to products and services
STRATEGIC IMPORTANCE & VALUE
CO
MPL
EXIT
Y A
ND
DYN
AM
ICS
Complex negotiation, design, or decision process
Many business rules; expertise involved
Some business rules
Procedure or simple algorithm
Non -Core Competencies
Core Differentiating Competencies
Everyday, highly repeatable and automated
Make repeatable and reliable to gain efficiency
Core Competitive Competencies
Non-core but complex - Outsource Innovation, chaos &
unresolved mysteries
HIGH
HIG
H
LOW
LOW
Must be done but adds little value to product or services
Very important to success, high value added to products and services
STRATEGIC IMPORTANCE & VALUE
CO
MPL
EXIT
Y A
ND
DYN
AM
ICS
Complex negotiation, design, or decision process
Many business rules; expertise involved
Some business rules
Procedure or simple algorithm
Non -Core Competencies
Core Differentiating Competencies
Everyday, highly repeatable and automated
Make repeatable and reliable to gain
efficiency
Core Competitive Competencies
Opportunityor
Threat?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 33
DISRUPTION IS SHIFTING THE FOCUS TO CUSTOMER LIFETIME VALUE
This shift is the essence of what drives the emergence of the chief digital officer (CDO). It also forces a stronger focus on the chief marketing officer (CMO)
SELLER DRIVEN ENTERPRISE CUSTOMER CENTRIC ENTERPRISE CUSTOMER DRIVEN ENTERPRISE
“Maximize product profitability”
Push Selectively Target Pull (collaboration)
DATA ANALYSIS
SERVICE Interactive & Proactive
UNDERSTANDING Segmented Individualized
CUSTOMER OFFERS Intra-enterprise bundles Inter-enterprise bundles
ORGANISATION Integrated Function Customer Outcome
CHANNELS
Segment Driven Integrated and Seamless
“Maximize market share”
“Maximize customer lifetime value”
MARKETING
Passive & Reactive Interactive & Reactive
Insight as Art Factual insight Predictive insight
Broad
Product Driven
Singular
Functional Silo
Digital Strategy Focus
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 34
WHAT IS DIGITAL?
Digital is a participatory layer of all media that allows users to self select their own experiences and affords marketers the ability to bridge media, gain feedback, iterate their messages, and collect relationships. BUD CADDELL
EnterpriseArchitects,March2011 Slide34
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 35
THE CMO AGENDA
FOCUS ON THE HERE AND NOW…
Exploration & Validity
Produce outcomes that meet an objective
THE CIO AGENDA
FOCUS ON LEVERAGE, SYNERGY, LONG TERM USE OF
ASSETS…
Exploitation and Reliability Produce consistent, predictable
outcomes
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 36
THE CUSTOMER DRIVEN SHIFT
Production Products Selling and Promotion
Profit Through
sales volume
Target individual
Customer Intention
Outcome Marketing
Profit through customer lifetime
satisfaction
TheSellingConceptProductDriven
TheValueConceptCustomerDriven
TheMarke>ngConceptCustomerCentric
Target Market Segment
Segment Needs
Integrated Marketing
Profit through Increased
Market Share
Thedigitalstrategy
focus
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 37
CUSTOMER DRIVEN AND DIFFERENT VALUE CHAINS
The Selling Concept - Product Driven
The Value Concept - Customer Driven
The Marketing Concept - Customer Centric
Production Products Selling and Promotion
Profit Through
sales volume
STARTING POINT FOCUS MEANS ENDS
Target Market Segment
Segment Needs
Integrated Marketing
Profit through Increased
Market Share
STARTING POINT FOCUS MEANS ENDS
Target individual Customer Intention
Outcome Marketing
Profit through customer lifetime
satisfaction
STARTING POINT FOCUS MEANS ENDS
The customer driven shift
The digital strategy focus
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 38
*Adapted from Geoffrey Moore’s: Dealing with Darwin
Each industry moves along a life cycle, with different opportunities for competitive advantage at each stage
THE STRATEGIC BUSINESS MODEL Its also great for start-ups at the early stage of the lifecycle
Introduction Growth Maturity Decline
TOTAL INDUSTRY REVENUE
TIME
DISRUPTOR ENTERS
MARKET SHARE, REVENUE & COST BECOME KEY
PRODUCT INNOVATION REDUCES
PROCESS INNOVATION BEGINS
PRODUCT LEADERSHIP CUSTOMER INTIMACY
OPERATIONAL EXCELLENCE
VALUE DISCIPLINE ORIENTATION THROUGH THE
INDUSTRY LIFECYCLE
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 39
BUSINESS MODEL EVALUATION BUSINESS MODEL OPTIONS ARE EVALUATED AGAINST VALUE DRIVERS OR BUSINESS
MODEL MECHANICS TO DETERMINE SHORTLISTS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 40
ARCHITECTURE DELIVERY MODELS EVALUATION OF STRATEGIC BUSINESS OPTIONS
The capability mixes are evaluated against each scenario to determine the optimal path going forward
REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS.
BusinessModels
ValueStreams
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 41
UNDERSTANDING THE ENGINE TO PRODUCE THE BUSINESS FIT
The operating model delivers the infrastructure required to deliver the products and services to the customer segments
THE ENVIRONMENT
BUSINESS MODEL
Markets
Industries
Customers
Market Segment
Channels
Customer Relationships
Value Proposition
Offering: Services/Products
Processes/ Value Chains
Capabilities
Business Service
Functions
Data
Applications
Technology
MARKET MODEL
OPERATING MODEL
PRODUCTS & SERVICES
MODEL
Aligning what is valuable to the customer and what is value to the business is referred to as the business fit. This means that the engine delivers both aspects and is the ideal mix an organization needs to engineer for.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 42
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 43
USING THE VALUE PROPOSITION CANVAS TO DEVELOP THE SERVICE MODELS
The Value (Proposition) Map describes the features of a specific value proposition in your business model in a more structured and detailed way. It breaks your value proposition down into products and services, pain relievers, and gain creators.
The Customer (Segment) Profile describes a specific customer segment in your business model in a more structured and detailed way. It breaks the customer down into its jobs, pains, and gains.
Gain Creators describe how your products and services create customer gains.
Pain Relievers describe how your products and services alleviate customer pains.
You achieve CUSTOMER Fit when your value map meets your customer profile— when your products and services produce pain relievers and gain creators that match one or more of the jobs, pains, and gains that are important to your customer.
Gain describe the outcomes customers want to achieve or the concrete benefits they are seeking.
Pains describe bad outcomes, risks, and obstacles related to customer jobs.
This is a list of all the
Products and Services a value proposition is built around.
Customer Jobs describe what customers are trying to get done in their work and in their lives when dealing with a problem or challenge.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 44
CUSTOMER INTERACTION ACROSS THE SERVICE LANDSCAPE
Products and Services
Valuable to the Customer
PRODUCT N
PRODUCT I
PRODUCT T PRODUCT Y
PRODUCT K
SERVICE D SERVICE N
SERVICE H SERVICE P
PRODUCT B SERVICE N
SERVICE T
PRODUCT S
SERVICE A
PRODUCT X
PRODUCT H
SERVICE O
PRODUCT N
PRODUCT E SERVICE C
SERVICE Q
SERVICE N
SERVICE T
SERVICE B
Customer Outcome
CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC
Establishing my account is quick and simple…
Integration is quick and easy, with the right help available
Efficient, with choices that make it convenient
I know when the shipment will arrive
I can find out whether my shipments were delivered;
I get a meaningful resolution to my problem
“I want to set-up my account” “I want to get ready to send my products” “I want to send a shipment” “I need to know when my
shipment will arrive” “I want confirmation that my
shipments have arrived” “Something has gone wrong
with my delivery…”
% of accounts set-up in <X hours
% of accounts that utilise more than X
% of orders with no manual intervention
% of articles with at least 4 scans
Service Delivery Performance Metric
# of complaints per million products
RESEARCH EVALUATE PURCHASE USE INTEGRATE SERVE
Value to the Business
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 45
CUSTOMER INTERACTION ACROSS THE SERVICE LANDSCAPE
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 46
Business Motivation
Strategic Business Models
Value Discipline Orientation
Operating Business Models
Capabilities and Resources
IT’S THE STRATEGIC BUSINESS MODELS THAT CAN DETERMINE WHERE VALUE LIES
O P C O P C O P C
Pe Pr T Pe Pr T Pe Pr T
LEVE
RS
DR
IVERS
INFORMATION
Mission
Strategies
Tactics
Vision
Goals
Objectives
DISRUPTION NORMALLY OCCURS WITHIN THE VALUE SYSTEM.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 47
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition Influencers
Values Drivers
Value System Engineering Business Scenario Value Proposition
Business Model Canvas
Business Motivation Model
Value Chain Capabilities
Cross-Functional Capabilities Capability Overlays
Roadmap & Planning
THE ADM ACROSS THE Z MODEL
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 48
UNDERSTANDING VALUE, PERFORMANCE AND MOTIVATION
Capability-driven architectures are designed to support the strategic objectives of an organisation
Mission
Strategies
Tactics
Vision
Goals
Objectives OUTCOME
A statement describing the aims, values and overall plan
of an organisation.
e.g. “To be the leading creator and protector of wealth.”
The means by which a strategy is carried out. Typically, projects are tactical
initiatives designed to execute strategy.
The long term plan of action designed to achieve a
particular goal of set of goals or objectives.
e.g. 5 year corporate plan.
A concise statement of a desired change.
e.g. “To be the leading provider of wealth management services in our major target markets.”
Lower level statements that describe specific, tangible products and deliverables that
projects will deliver.
e.g. “To increase revenue by 15%. To reduce OpEx by 10%.”
A high level statement of what the business is trying to accomplish.
e.g. “Improve call centre response times”
CAPABILITY
People
Process
Technology
Information
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 49
UNDERSTANDING VALUE, PERFORMANCE AND MOTIVATION
Mission
Strategies
Tactics
Vision
Goals
Objectives
OUTCOME
CAPABILITY
People
Process
Technology
Information
Business Model
Value Chain
Capabilities
Performance Model
Value Model
END MEANS HOW
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 50
AN APPROACH TO REPRESENT MOTIVATION AND VALUE
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 51
VICTORIA INVESTMENT LOGIC MAPS EXAMPLE: IMPROVING ACCESS TO HEALTH SERVICES IN RURAL VICTORIA
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 52
ALIGNING RISK WITH MOTIVATION THE COSO ERM FRAMEWORK AND ITS ALIGNMENT WITH VALUE
Riskmanagementwithoutaclearmappingtovalueandperformanceresultsinflaweddecisionmaking
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 53
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition Influencers
Values Drivers
Value System Engineering Business Scenario Value Proposition
Business Model Canvas
Business Motivation Model
Value Chain Capabilities
Cross-Functional Capabilities Capability Overlays
Roadmap & Planning
THE ADM ACROSS THE Z MODEL
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 54
NON-CORE CAPABILITY (MEET) The goal is to meet market standards,
exploitation and reliability Produce consistent, predictable outcomes
Focus on effectiveness and efficiency
CORE COMPETING CAPABILITY (COMPETE) The goal is competitive parity
Focus on innovation and efficiency
CORE DIFFERENTIATING CAPABILITY (BEAT) The goal is competitive advantage,
exploration & validity Focus on innovation and efficiency
Produce outcomes that meet an objective
THREE LEVELS OF MIXING: FROM THE BUSINESS MODEL TO
THE CAPABILITY RESOURCES
A reliable system will produce the same test
results every time
A valid system will produce a result that is shown, through the passage
of time, to be correct
COST
VALUE
5%
15%
80%
LEADING AND BEST PRACTICE RESEARCH, 2011/2012
THE ENVIRONMENT
BUSINESS MODEL
Revenue Model
Value Model
Product & Service Model
Performance Model
Cost Model
Operating model
Differentiating Capability
Non-Core Capability
Competing Capability
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 55
MIXING AT THE BUSINESS MODEL LEVEL
THE ENVIRONMENT
BUSINESS MODEL Markets
Industries
Customers
Market Segment
Channels
Customer Relationships
Value Proposition
Offering:
Services/Products
Processes/ Value Chains
Capabilities
Business Service
Functions
Data
Applications
Technology
MARKET MODEL
OPERATING MODEL
SERVICE MODEL
THE ENVIRONMENT
BUSINESS MODEL
Revenue Model
Value Model
Product & Service Model
Performance Model
Cost Model
Operating model
Differentiating Capability
Non-Core Capability
Competing Capability
THE ENVIRONMENT
BUSINESS MODEL
• ValueSystem
• Value chain
• Value Model
• Capability Model
• Structural Ownership & Accountability
• Decomposed Capability Model
• Core competitive & differentiating capability
• Service Model
Level 1
Level 3
Level 2
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 56
BUSINESS MODEL LEVEL 2
Capabilities Aligned to Functional Areas
THE ENVIRONMENT
BUSINESS MODEL
• Value System • Value chain • Value Model
• Capability Model • Structural Ownership
and Accountability
• Decomposed Capability Model
• Core competitive & differentiating Capabilities
• Service Model
Level 1
Level 3
Level 2
Competencies
Operations
Operations Management
Strategy & Execution Performance Management Underwriting & Risk Management
Document Management
Decisional & Business
Intelligence
Business Process
Management
Process Execution
Change Management
Knowledge Management
Resource Allocation
Operational Performance Management
Technical Operations
Training
Operations Quality
Management
Strategy Research
Strategy Planning
Strategy Management
Project Portfolio Selection
Project Portfolio
Prioritisation
Project Execution
Benefits Realisation
Government Policy
Enterprise Architecture
Product/Channels
Profitability
Management Reporting Underwriting Reinsurance
Corporate Risk
Management
Business Continuity
Management
Internal Audit
Market Development and Sourcing Productising and Bundling Sales and Distribution Servicing
Product Service
New Business
Underwriting
Policy Owner Service (POS)
Recurring Claims
Management
Lump Sum Claims
Management
Delivery Method
Registration
Value Transaction Management
Premium Management
Payments Management
Consolidated Reporting
Customer Service
Enquiries
Complaints Management
Retention
On-boarding
Adviser Remuneratio
n
Business Development & Sales
Leads Generation
Leads Management
Broker Management
Strategic Pipeline
Tactical Pipeline
Needs Analysis
Product Selection
Quotation & Illustration
Application
Tenders
Client Development
Specialist Training
Client Servicing
Partner Strategy &
Support
Client Communicati
ons
Adviser Relationship Management
Sponsorship
Renewals
Consulting
Dealership Relationship Management
Product Manufacture & Maintenance
Product Research
Product Development
Product Packaging
Product Management
Reinsurance
Pricing
Marketing
Market & Data
Analytics
Campaign Management
Product Launch
External Market
Communications
Brand Management
Promotions
Advertising
Internal Sales Tools
Channel Marketing
Claims Mngmnt
Policy Acquisition
Policy Admin
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 57
BUSINESS MODEL LEVEL 3: THE CAPABILITY ANCHOR MODEL PROVIDES THE DETAILED UTILITY
BUILDING BLOCKS OF THE ORGANISATION The Capability anchor model represents the "map" of the organisation
THE ENVIRONMENT
BUSINESS MODEL
• Value System • Value chain • Value Model
• Capability Model • Structural Ownership
and Accountability
• Decomposed Capability Model
• Core competitive & differentiating Capabilities
• Service Model
Level 1
Level 3
Level 2
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 58
UNDERSTANDING CAPABILITY
Capability driven by business has different outcomes than that driven by technology. Research shows that business driven capability based planning is more successful.
However, without aligning to IT, business architecture is more at risk of failing to deliver against strategic objectives.
CAPABILITY
OUTCOMES CUSTOMER
VALUE PRODUCT & SERVICE
PERFORMANCE PROCESS
PEOPLE
APPLICATIONS
DATA
INFORMATION
TECHNOLOGY
Information Technology Business
BusinessLed
ITLed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 59
Current State
Future State
Pain Points – Inefficiencies The application submitted by the consultant is often incomplete. The application is reviewed for completeness and adjudicated.
The conditional approval, along with a list or required documents are then sent back to the MS, who will communicate the results, a conditional approval, back to the applicant. This process can take several days and requires a significant time and effort from RBC resources.
What would a truly transformational scenario look like?
New Capabilities
1. Portable credit scoring system and rules engine
2. Document verification at POS
3. Automated disbursement
Required Changes - How are pain points addressed?
Credit scoring engine must be available to the mortgage specialist, permitting an on-the-spot adjudication
Document verification enabled at the point of sale by the cons.
Highly automated process which advances funds without the need for the human intervention
UNDERSTANDING THE THE DEGREE OF CHANGE EFFORT TO MOVE TO THE FUTURE STATE
CHANGE FRAMEWORKS APPLIED TO YOUR PROCESS COMPONENTS CAN HELP DETERMINE IMPACT
Incr
emen
tal
Impr
ovem
ent
Sign
ifica
nt
Impr
ovem
ent
Cha
nge
the
Gam
e
1
1 2 3
Contacts bank to request mortgage
Cons. meets with the applicant
Application is complete
Application submitted for adjudication
Application is adjudicated
Results are communicated to MS
Applicant receives cond’nal approval
Applicant submits required docs
Documents are verified
Client executes documentation
Mortgage is approved
Mortgage is set up on bank systems Funds are advanced
1
Contacts bank to request mortgage
rep meets with the applicant
Application is complete
Application adjudicated on the spot
Applicant receives cond’nal approval
Applicant submits required docs
Documents are verified
Client executes documentation
Mortgage is approved
Mortgage is set up on bank systems Funds are advanced
1
Contacts bank to request mortgage
Cons meets with the applicant
Application is complete
Application adjudicated and docs verified
Client executes documentation
Mortgage is approved Funds are advanced 2 3
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 60
SEQUENCING PARADIGMS
DEFINITION KNOWLEDGE OF IMPLEMENTATION
CURRENT STATE Business as Usual • Evaluation of current process • Evaluation of current benchmarks • Evaluation of current competitor practices and product/
service offerings
• Identifying pain points and customer irritants
• Documenting current state o People o Process o Technology
FUTURE STATE Incremental improvement. How do we improve a little?
• Matching current competitor product/service offering • Median performance against peers
• Process improvements o Lean Six Sigma
• System changes • Outside vendors/outsourcing
Significant improvements How do we improve a lot?
• Market leading product/service offering • Top quartile performance relative to peers • Industry best practices
• E2E changes involving the entire value chain
• New systems • Peer best practices
Truly transformational. How do we change the game?
• Market leading product/service offering – “blue water” – strong source of lasting competitive advantage
• Top decile performance relative to peers • World-class best practices (using non-financial industry
practices)
• Outside specialty consulting companies • Best practices outside the financial
services industry
Determine the degree of change required to bridge the current and future state maturity
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 61
THE CROSS FUNCTIONAL CAPABILITY ANCHOR MODEL HELPS IDENTIFY A BETTER MIX OF CAPABILITIES FOR BUSINESS OUTCOMES It is at this point that the business begins to see the true value of using capabilities
Standard functional capabilities can be aligned to a value chain
Cross functional capabilities assemble and mix functional capabilities to achieve outcomes in the value map or driver tree
Cross functional capabilities each drive out different outcomes. Underlying functional capabilities will have varying perspectives of capability maturity and capability uplift
You can also use cross functional models as scenarios to test the capability anchor model validity
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 62
PROCESS
SignUp&Integrate
CAPABILITY
20. Information Services Management
CAPABILITY
15. Sales Execution
PROCESS
A1.Exploreandcomparepotentialprovidersand
services
PROCESS
B2.Signupandactivateaccount
PROCESS
C3.IntegratemystorewithAustraliaPost’sAPI’sprecedes precedes precedes precedes
BUSINESS SERVICE
Customer Sales Management
BUSINESS SERVICE
Partner Collaboration
PROCESS
C1.Receiveinformationonhowthesystemsandprocesseswillwork
PROCESS
C2.Installthenecessaryhardware/softwareon
mysystems
is realized by
LOGICAL APPLICATION COMP.
Customer Sales Management
LOGICAL APPLICATION COMP.
Enterprise Resource Planning
LOGICAL APPLICATION COMP.
Partner Collaboration Management
LOGICAL APPLICATION COMP.
Security Management
communicates with communicates with
communicates with
implements
is realized by
implements
ACTOR
Post Staff
DATA ENTITY
Sales Order
ACTOR
Post Staff
participates in participates in
is processed by
consumes
SAP - CRM SAP - ERP auspost.com.au
IAM - OIM
is processed by
ACTOR
Fiona
participates in
THE CROSS FUNCTIONAL CAPABILITY MODEL The process layer plays a strong role in assembling capabilities for different outcomes
CAPABILITY
People
Process
Tools
ConnecQngthesetoprojectsprovidesvaluableinsightintocoherencyofthecapexinvestmentacrosstheenterprise
Withineachprocessflow,therearetypicallyfourtofivecapabiliQesthatmakeuptheprocess.ThesetypicallycorrespondtofuncQonalsilosthatcompleteeachstep.
Withineachcapability,themodelidenQfiessystemsorapplicaQonsthatareusedtoexecutethecapability.ThisiswherethemodelformsthealignmentbetweenbusinessandIT.
ArchimateNotaQon
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 63
Products and Services
Valuable to the Customer
PRODUCT N
PRODUCT I
PRODUCT T PRODUCT Y
PRODUCT K
SERVICE D SERVICE N
SERVICE H SERVICE P
PRODUCT B SERVICE N
SERVICE T
PRODUCT S
SERVICE A
PRODUCT X
PRODUCT H
SERVICE O
PRODUCT N
PRODUCT E SERVICE C
SERVICE Q
SERVICE N
SERVICE T
SERVICE B
Customer Outcome CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC
Establishing my account is quick and simple…
Integration is quick and easy, with the right help available
Efficient, with choices that make it convenient
I know when the shipment will arrive
I can find out whether my shipments were delivered;
I get a meaningful resolution to my problem
“I want to set-up my account” “I want to get ready to send my products” “I want to send a shipment” “I need to know when my
shipment will arrive” “I want confirmation that my
shipments have arrived” “Something has gone wrong
with my delivery…”
% of accounts set-up in <X hours
% of accounts that utilise more than X
% of orders with no manual intervention
% of articles with at least 4 scans
Service Delivery Performance Metric
# of complaints per million products
R E S E A R C H E V A L U A T E P U R C H A S E U S E I N T E G R A T E S E R V E
Value to the Business
CUSTOMER BEHAVIOUR: UNDERSTAND TOUCHPOINTS ACROSS THE LIFECYCLE AND IDENTIFY THE JOURNEYS AND PAINPOINTS
Map the Customer personas into a customer interaction map to come up with the journey through the customer value chain & look for issues
1
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 64 K
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 65
“ARCHITECTURE THINKING”
MOTIVATION MODEL BUSINESS MODEL
SERVICE MODEL
CAPABILITY MODEL
People
ROADMAP
GOVERNANCE
* Closed feedback loop to Motivation Model
Vision
Strategy
Blueprinting
Roadmapping
Governance
Information
Technology
Process
Design Thinking: Empathise, Define, Ideate, Prototype, Test
MARKET MODEL
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO ENVIRONMENT
INDUSTRY SCAN
SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term)
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 66
MOTIVATION MODEL
BUSINESS CAPABILITIES
IM ROADMAP
GOVERNANCE
* Closed feedback loop to Motivation Model
Information
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO ENVIRONMENT
INDUSTRY SCAN
SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term)
SOCIALISE WITH BUSINESS, LINK EIM EFFECTIVENESS TO BUSINESS GOALS AND RISK, OBTAIN CONSENSUS, MEASURE & MONITOR
LINKING INFORMATION CAPABILITY ROADMAP TO BUSINESS CAPABILITY, RISK AND MOTIVATION
Understand business motivation with respect to information management
Identify the critical business capabilities to support the strategies
Define roadmap – prioritised to support timely delivery of EIM capability linked to business need
1 2 3 Understand changing needs for a digital business
Identify the information risk appetite and risks
Assess how application strategies are impacted by low EIM capability maturity
Identify the EIM capabilities materially impacting business capability and information risk – pertinent to the business motivation
4
6 7 8 9 Measure and monitor performance
5 Assess how business capability effectiveness is materially impacted by low EIM capability maturity
1 2
3
4 6
8
7
Information Risk
Digital Requirements
9
APPLICATIONS
5
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 67
MOTIVATION MODEL
CLOUD SERVICE OFFERINGS
CAPABILITY MODEL
ROADMAP
GOVERNANCE
* Closed feedback loop to Motivation Model
Information
Technology
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO ENVIRONMENT
INDUSTRY SCAN
SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term)
SOCIALISE, OBTAIN CONSENSUS, MEASURE & MONITOR
CLOUD STRATEGY & ROADMAPPING JOURNEY
Understand the motivation for Cloud Understand the risk appetite of the business and the risk profile of the offering
Obtain consensus, support and commitment
1 2 3 Understand business requirements for Cloud
Identify and classify assets going into the Cloud
Assess the Cloud service offerings Define the roadmap
4
5 6 7 8 Measure and monitor performance
1 2
3 4 5
6
7
Information & Risk
CLOUD REQUIREMENTS
8 APPLICATIONS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 68
ROLES & OP. MODEL
HUMAN CENTRED SERVICE AND CAPABILITY DEVELOPMENT
CAPABILITY MODEL
ROADMAP GOVERNANCE
* Closed feedback loop to Motivation Model
MEANS ASSESSMENT
MOTIVATION MODEL
INFLUENCERS
ASSESSMENT
MEANS ENDS
SERVICE MODEL / CATALOGUE
WHAT
WHY
COMMUNICATION
ENGAGEMENT MODEL
DEMAND ANALYSIS SOURCING
BUSINESS CONTEXT
HOW
WHO
WHERE
WHEN
CAPABILITY ASSESSMENT
BUSINESS MODEL
CUSTOMER PERSONAS
VALUE PROP EMPATHY MAPS
CURRENT FUTURE
SERVICE DESIGN PROCESS
ENABLES
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 69
THE BUSINESS OF ARCHITECTURE
ROADMAP
ROLES & OP. MODEL
GOVERNANCE
* Closed feedback loop to Motivation Model
MEANS ASSESSMENT
SERVICE MODEL / CATALOGUE COMMUNICATION
ENGAGEMENT MODEL
DEMAND ANALYSIS SOURCING
CAPABILITY ASSESSMENT
MOTIVATION MODEL
INFLUENCERS
ASSESSMENT
MEANS ENDS
BUSINESS MODEL
CAPABILITY MODEL
BUSINESS CONTEXT
Where
When
Who How
Why
What
Enables
MANDATE
SERVICE CO-DESIGN
CURRENT FUTURE
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 70
CAPABILITY MODEL OVERLAYS Capability models and their overlays can reveal the answers to important business questions
BUSINESS CAPABILITY MODEL WITH STRATEGIC OVERLAY
BUSINESS CAPABILITY MODEL WITH CURRENT MATURITY OVERLAY
BUSINESS CAPABILITY MODEL WITH PAIN POINTS
BUSINESS CAPABILITY MODEL WITH INFLIGHT PROJECTS
What is important to my business? What are my strengths and weaknesses?
Where is my current investment focussed – CAPEX?
Where are my tactical and political pressures?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 71
BUSINESS CAPABILITY MODEL WITH STRATEGIC OVERLAY
BUSINESS CAPABILITY MODEL WITH CURRENT MATURITY OVERLAY
BUSINESS CAPABILITY MODEL WITH PAIN POINTS
BUSINESS CAPABILITY MODEL WITH INFLIGHT PROJECTS
Am I over or underspending?
Is my current investment portfolio dealing with tactical issues?
Is my strategy aligned with management issues / focus areas?
Am I able to achieve my strategy?
Capability models and overlays can reveal the answers to important business questions.
CAPABILITY MODEL OVERLAYS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 72
LOOKING FOR OPPORTUNITIES AND SWEETSPOTS
72
Capabilities with Strategic priorities
associated
CapabiliQeswithPain-pointsassociated
Sweetspots with no projects
Painpoints with no project
High priority with no projects
High priority with projects
Painpoints with projects
B
CD
E
F
A G
Sweetspot and low hanging fruit
In-FlightProjects
Investment with no identified digital value
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 73
APPLY THE HEURISTICS TO EACH QUADRANT Different decisions occur in each quadrant. Positioning the degree of change (complexity) against value will allow us to apply these heuristics
Software Automation
Projects
Funds investment
Widget assembly
Credit card approval
Inventory Management
Outsourcing Projects
Major re-design projects
New Product design
Deals with other companies
International Delivery
On-line purchasing
ERP based process
improvement
Complex Processes, not part of company’s core competency: Outsource
Complex, dynamic processes of high value:
undertake business process improvement efforts that focus on
people
Straightforward, static commodity processes: use automated ERP-
Type applications and / or outsource
Straightforward, static, and valuable: automate
to gain efficiency
HIGH
HIG
H
LOW
LOW
Must be done but adds little value to product or services
Very important to success, high value added to products and services
STRATEGIC IMPORTANCE
CO
MPL
EXIT
Y A
ND
DYN
AM
ICS
Complex negotiation, design, or decision process
Many business rules; expertise involved
Some business rules
Procedure or simple algorithm
Organisation Heuristics
*Adapted from “Business Process Change” by Paul Harmon
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 74
LOOK FOR ALIGNMENT BETWEEN CAPABILITIES, PROJECT EFFORT AND VALUE
Removed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 75
BUSINESS ARCHITECTURE AND APPLICATION PORTFOLIO MANAGEMENT
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 76
UNDERSTANDING CAPABILITIES AND THEIR RELATIONSHIPS HELPS IMPROVE COHERENCY ACROSS THE ENTERPRISE
Clearer visibility of synergies is required to consolidate strategic efforts across the major programs
Removed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 77
UNDERSTANDING MATURITY HELPS IDENTIFY STRENGTHS AND WEAKNESS
PROCESS: Maturity Overlay: CMMI
Removed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 78
UNDERSTANDING THE RESOURCE MIX INSIDE A CAPABILITY HELPS FOCUS ON THE RIGHT LEVERS
PROCESS and APPLICATION: Issue and Hotspot Analysis
Removed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 79
OVERLAYING TECHNOLOGY AND INFORMATION HELPS IDENTIFY SYNERGIES BETWEEN THE PEOPLE, PROCESSES AND THE UNDERLYING TECHNOLOGY
APPLICATION: Functional Alignment to SAP Platform
Removed
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 80 K
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 81 K
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 82 K
WHEN
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 83
CAPABILITIES AND CROSS FUNCTIONAL CAPABILITIES ARE EVALUATED IN LIGHT OF ALL THE CHANGE FACTORS
The capability mixes are evaluated against each scenario to determine the optimal path going forward
REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS.
BusinessModels
ValueStreams
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 84
SEQUENCING PARADIGMS Mixing strategic value and complexity
StrategicValue
Complexity
100
90
80
70
60
50
40
30
20
10
0
0102030405060708090100
31
8
32
1316
1217
11327
2522
26
29
21 18
24
28
16
7
4
2030
23
3433
39
140
937
35
10
52
14638
19
Whatsequenceshouldbefollowed?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 85
TRANSITION PLANNING Look to mature capabilities through increments
Capabilities Basic Intermediate Advanced
Customer service
1. Service team trained and equipped
Marketing execution
2. Marketing playbooks automated
3. Marketing and sales campaign pilot
5. Advertising revenue adjustment calculation
7. Marketing and sales campaign pilot
6. Customer sat score & stakeholder sat score
Sales execution
1 2 3 4 5
Current State Future State
2. Sales playbooks automated
4. Marketing and sales campaign prototype
5. Sales team training
7. Cross functional process automation
6. Pilot
1
2 3 7 8
7 6 5 4 2
2
3
7
8
9
1
7
6
5
4
2
Maturity
9
Capabilities increase and decrease in maturity over time depending upon outcomes. Plan for increments that can be absorbed by the business.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 86 K
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 87
TELLING THE STORY
• Introduces current state for applications, integration, data and technologies
• Future State with workshop inputs - demonstrates how the future state was derived
• EA Operating Model and next steps
• Introduce Project context • Organisation motivations
• Organisation capabilities
• Illustrates the use of the overlay models
• Highlights potential gaps
Business Anchor Model
A2
Business Motivation Model
A2
Business Anchor Model Constraints Overlay
A2
Business Anchor Model Investment Overlay
A2
Applications Portfolio Current State
A2
Technologies Portfolio Current State
A2
Conceptual Data Model Security Overlay
A2
Applications Interaction Model Current State
A2
Applications Interaction Model Future State
A2
Technologies Roadmap
A2
Applications Roadmap
A2
Project on a page
A3
Business Architecture Findings
A3
Business Architecture Findings
A3
Applications Architecture Findings
A3
Applications Options Workshop Integration
A3
Technology Options Workshop Slide
A3 EA Operating Model
A3
Recommendations
A3
Recommendations
A3 A3
Business Architecture Findings
1 2 5 4 3
1
2
5
4
3
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 88
SOCIALISE FOR BUY-IN
These methods help the architecture speak for itself
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 89
ABOUT
zero HOURS A DAY BACK OFFICE VENDOR ALIGNMENT
MORE THAN 1600 PEOPLE TRAINED IN ARCHITECTURE PRACTICES (AND RISING)
12 YEARS IN BUSINESS 8
GLOBAL OFFICES 1600MORE THAN 10,000 DAYS OF ARCHITECTURE SERVICES DELIVERED LAST YEAR
10,000
one COMMON METHOD
20 four
sixOPERATING IN 6 CONTINENTS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 90
OUR SERVICES Servicing the Strategy and Architecture needs of Global Organisations
STRATEGY CONSULTING › Business Architecture › Strategic Services & Operating Model
Design: » Business Services & Capabilities » IT Services & Capabilities
› Segment Strategies and Roadmaps: » Customer Experience & Digital » Enterprise Information Management » Big Data Analytics » Applications » Cloud & Infrastructure » Security, Risk & Resilience » Innovation Management
PRACTICE DEVELOPMENT › Architecture Service Model Design › Architecture Operating Model Design › Service and Capability Readiness
Assessment › Professional Training and Certification
(Business Architecture, Information Management, TOGAF®, CDMP®, ArchiMate® and Design Thinking)
› Project Architecture Resources › Architecture Talent Strategy and
Professional Development
› Architecture Back Office Services
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 91
Source: Building Bridges to the Promised Land, The CMO Club, 2014
THE CMO AND CDO DILEMMA
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 92
WHAT WE HAVE FOUND IN LARGE ACCOUNTS An ownership gap for business architecture exists - Lines of responsibility around coherency and business architecture, are often unclear
Cohesion Mandate Undefined - Enterprise Planning Ownership
Ent
erpr
ise
Per
form
ance
C
apab
ilitie
s
X-F
unct
iona
l C
apab
ilitie
s
Func
tiona
l C
apab
ilitie
s
CONTEXT Markets
Industries
Customers
Market Segment
Channels
Customer Relationships
Value Proposition
Offering: Services/Products
Processes/ Value Chains
Capabilities
Business Service
Functions
Data
Applications
Technology
MARKET MODEL
OPERATING MODEL
SERVICE MODEL
Strategic Architecture
Mandate – Business
Ownership
IT Architecture Mandate –
IT Ownership
Business Architecture
Mandate Undefined
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 93
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition Influencers
Values Drivers
Value System Engineering Business Scenario Value Proposition
Business Model Canvas
Business Motivation Model
Value Chain Capabilities
Cross-Functional Capabilities Capability Overlays
Roadmap & Planning
THE ADM ACROSS THE Z MODEL
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 94
QUESTIONS?