Consistency between Business Strategy and IT


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Consistency between Business Strategy and IT

  1. 1. maandag 5 november 2012Master class CIOConsistency between Business Strategy and ITAuthor: Harry BouwmanDate: November 5th, 2012 1 slide 2 Outline Presentation and discussion I. From strategy to business models • Networked society II. IT driver and enabler: what is the consequence for IT management • Some theory • Service focus III. Design of service(s) platforms and business models Business models and internal IT: B/EA© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 1
  2. 2. maandag 5 november 2012 slide 3 Some assumptions on network economy • Networked economy as a service economy • From auxiliary services to product as support to services • Upstream service value creation • Servitization • Service bundling, service unbundling • Service experience • Values • Ethics and core values, corporate governance • Sustainable society: leasing business model for products© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 4 Some assumptions on network economy • Interdependencies across industry sectors, across firms and organizations, and internally • Micro-eco-systems • Resource dependencies: control on arm length • Keystone firms or dominators • Mutli-level Business Models© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 2
  3. 3. maandag 5 november 2012 slide 5 Consistency or gaps: from strategy to architecture Business Business Business strategy model Architecture Strategy design: SWOT (Selznick, 1957) STOF Business Architecture Strategic Planning School (Ansoff, 1965) (Bouwman et al, 2008) Enterprise Architecture Strategic positioning (Porter, 1980) CANVAS Business Processes Competitive Advantage (Osterwalder & Pigneur, 2020) Process tooling Resource Based View (Barney) CSOFT Resource dependency (power) (Heikilla et al., 2010) (Pfeffer & Salancik, 1978) BM component (IBM, 2005) Eco-systems Platforms BM tooling© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 6 I. From strategy to business models© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 3
  4. 4. maandag 5 november 2012 Why study business models? (Pateli and Giaglis, 2004, Osterwalder and Pigneur, 2002; Chesbrough, 2011) • Understanding BM elements and their relationships in a specific business domain • Communicating and sharing this understanding to the outside world • Using them as a foundation for change • Measuring the performance of an organization: KPi’s • Simulating and learning • Experimenting with and assessing new business models • Changing and improving the current way of doing business5-11-2012 Business Model approaches • Business Model Canvas (Dubosson-Torbay et al, 2002; Osterwalder et al 2010) • STOF (Bouwman et al, 2008) • C-Soft (Heikkila, 2008) • Four-Box Business Model (Johnson, 2010) • Business Model Schematics (Weil & Vitale, 2001) • Entrepreneurs business model (Morris et al, 2005) • E3-value (Gordijn & Akkermans, 2001) • Component Business models (IBM, 2005) • BEAM; business eco-systems analysis and modeling (Tiam et al, 2008) • .and many others 4
  5. 5. maandag 5 november 2012Business ecosystem(Moore, 1993)Network of organizations, including suppliers, lead producers, competitors, and other stakeholdersEmerge around a core technology (i.e. platform)Engaged in cooperative activitiesDevelop complementary around the core technologyCo-evolve capabilities and roles over timeLead by a central company towards shared visionCentral company may change over timeGoogle ecosystem 5
  6. 6. maandag 5 november 2012Main roles in business ecosystem(Iansiti & Levien, 2002; 2004)Keystones • Create value by providing the core platform • Share the value of platform with other members • Critical for survival and stability of business ecosystem • Enhance the overall health of business ecosystemMain roles in business ecosystem(Iansiti & Levien, 2002; 2004)Dominators Extract most of the value from business ecosystem and left less for others Tend to eliminate other members and take over the business ecosystem Reduce the diversity, eliminate competition, hinder innovation 6
  7. 7. maandag 5 november 2012 slide 13 Discussion • Due to network economy interdependencies between organizations are that strong that developing a strategy for a firm can only make sense if these interdependencies are taken into account© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 14 II. IT driver and enabler: what is the consequence for IT management?© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 7
  8. 8. maandag 5 november 2012 slide 15 Trends according to Gartner • Gartner 10 trends 2013: drivers or enablers? • Mobile device battles • Mob Apps & HTML 5 • Personal cloud • IoT • Hybrid IT & Cloud computing • Strategic Big Data • Actionable analysis • Mainstream in-memory computing • Integrated Eco-systems • Enterprise App Stores© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 16 Consequences for IT (internal) • What is your prime concern? • IT as driver or as an enabler • Enabler; Edward Jones Case: consistency of Strategy and IT • Driver: Making money with IT Business case: social media, cloud, ubiquitous computing: sensors and mobile, NFC, • Enabler: How to integrate social media in IT operations? Private, public, hybrid cloud; BYOD, .© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 8
  9. 9. maandag 5 november 2012 slide 17 Consequences for IT (internal) • BITA: Aligning business and IT within organization • Your organization: incumbent versus start up; public versus private owned company; government versus business • Agility or Architectures: or both?© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 18 Some theory© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 9
  10. 10. maandag 5 november 2012 Strategic Alignment Model (SAM) (Henderson & Venkatraman 1993)• SAM advocate alignment (Strategic Fit and Functional Integration) between and within four domains: • Business domain • IT domain • Organization Infr. & processes • IS Infr. & processes• Based on SAM, 4 alignment perspectives are possible: 1. Strategy Execution 2. Technology Potential 3. IT as Competitive Potential 4. Service level• Since SAM, several alternative SAM- Venkatraman et al. (1993) based models are introduced. Information Management Model (Maes 2000)• Extend SAM model with a new row (Structure) and a new column (Information and Communication)• New row, because business-IT relationship is not only a question of strategic, but also structural and operational correspondences• (ARCHITECTURES: BA/EA, IA and IT-infra).• New column, because business-IT relationship is much more complex involving cultural, political, financial and semantic aspects. 10
  11. 11. maandag 5 november 2012Business Architecture(Versteeg and Bouwman 2006)Business Architecture• Architectural approach to bridge business with IT• Business strategy gets better formulated and understood and is a pre-structuring device for the development of subsequent architectures.• Product/service development, operations, customer relation and interaction> Information Architecture• IT-functions (functional modeling)• Data, objects (data modeling)> Process Architecture• Information Arch. are related to business processes leading to IT-units> Application Architecture• Business domain acquire services form ICT-suppliers. slide 22 Enterprise architecture © Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 11
  12. 12. maandag 5 november 2012 slide 23 Discussion Organizations have to understand both the role of IT as a driver and as enabler, and this has to be expressed as part of a strategic vision For large information intensive organizations as well as high tech corporations and organizations there has to be a clear relation between strategy, business and enterprise architecture© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: slide 24 III. Design of service(s) (paltforms) and business models© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 12
  13. 13. maandag 5 november 2012 slide 25 Focus on services Highest added value comes from services •Service innovation •New Service Design •Servitization •Service bundling, service unbundling •Upstream service value creation •Productization of services •Service platforms© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 26 STOF-model Double role IT5-11-2012 13
  14. 14. maandag 5 november 2012 27 STOF focus • Strategy implementation and operationalization • Multi-actor, networked enterprises • Technology driven and enabled • Service/product as unit of analysis • Design oriented: critical design issues • Tooling: design handbook, business modeling, and decision support tools05/11/2012 slide 28 Customer Service provider Platforms <lookup> <invoke> <register> <advertise> <monitor> Service platform A Service Service x y© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 14
  15. 15. maandag 5 november 2012 slide 29 Heavy weight and light weight approaches to service design, engineering and business modeling © Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: User experience Platforms and ecosystems: Business models and modellingDesign Cycle Method Kernel theories Method, Tooling Kernel theoriesIdea Focus group, Domestication Descriptive STOF/CANVAS/CSOFT model Participatory Observation Lazy User Case study With support theories in service marketing, Adoption and Business model design service engineering, platform theories, acceptance models BM Quick Scan information economics, strategy analysis, organizational theory, stakeholder analysisConcept Conjoint Fit theories, context Business model stress Risk and uncertainty analysis aware behavior, testing Agile software development WTP Agile BM application (micro) Eco-systems, Lab. Experiment Social network analysis Platform theory, (qualitative) Open-closed models, BM-DSS Social Network Theory Financial modeling: pricing; WTPImplementa- Field experiments HCI, WTP, TTF Technical artifact Service life cycle and platform engineering;tion IG and SQ Business MODEL Tooling: UML diagrams VIP model BM and EA/BA Collective action BM –DSS Critical mass theory NVP, Real Options GovernanceCommercial- Evaluation, Use and Adoption, acceptance Business Model roadmapsization Impact: and use research Ecosystem analysis Market observation Social and digital Social network analysis (SEM, LCA) exclusion (quantitative) Log data analysis Continuance BM-KPI 15
  16. 16. maandag 5 november 2012 31 BM and an agile approach BM Visualization as first phase of scrum approach Cases TomTom, Yes2Web, Dialogues House (ABN-AMRO)05/11/2012 32 BM and EA platformsCitizens/ConsumersBusiness services= Platform for citizens/consumershealthy livingInformation systems services= Platform for business servicesTechnology services= Platform for informationsystems services05/11/2012 16
  17. 17. maandag 5 november 2012Networked BM: STOF-VIP 3405/11/2012 17
  18. 18. maandag 5 november 2012 slide 35 Discussion Time to market of heavy weight approaches is too long, while the level of detail is more attractive and does lead to implementations that work© Nyenrode Business Universiteit +31 (0)346 - 291 211 Find us on: 36 Closing remarks, Questions Shift in focus from Strategy to BM: single firm, marketing strategy (CANVAS) • Mainly brainstorm tool for individual firms • Network economy Via BITA and Architecture thinking To Consistency of strategy, BM and B/EA Service design and BM (STOF) BM tooling: ICT enabled, networked enterprise STOF and beyond • Value and Information exchange, processes alignment05/11/2012 18