Business Improvement

Busi ness Improve ment Richard Veryard

Historical Background

Twentieth Century

Simple Systems

Focus on abstraction  leaving out the complexity of real business in order to implement basic information system support.

Structured Methods

E.g. Information Engineering

Object-Orientation

Line-and-Box Diagrams

Data Models (ER)

Object Models (UML)

Process Flow Models (IDEF)

Twenty-First Century

Complex Systems

The simple shallow stuff has already been done  how do we now start to address the more difficult stuff?

Notations

Refinements and improvements on 20th century methods – e.g. ArchiMate, BPMN – but basically the same underlying concepts.

Newer approaches that include meaning and intention – e.g. i* and DEMO.

How do these methods and notations help us solve today’s complex and dynamic problems?

Two Types of Business Model

B

Business-Friendly

The-Way-We-Do-Business

What-Distinguishes-Us-From-Our-Competitors.

"Pile-Em-High-And-Sell-Em-Cheap“

"Ship-Em-Quick-But-Collect-Cash-Quicker".

This is what any normal person outside IT thinks a business model is.

C

Conceptual / Computational

Line-And-Box-Diagrams

Data diagrams or process flow diagrams, which describe the conceptual structure of the business.

May be drawn in IDEF or ER or UML or BPMN or ArchiMate or something like that

Together with rigorous semantics for each of the elements on the diagram.

These diagrams typically abstract away from many of the things that differentiate an enterprise from its competitors.

Note: C doesn’t imply a computer. A set of bureaucratic operational procedures can be “computational” in the sense that clerks or call center operators are “programmed” to respond in predictable ways to certain requests. So this is similar to what is sometimes called an operational business model.

Is the Business Model Broken?

Industries in trouble include …

Automobiles

Banking & Finance

Computer Games

Electronics and EDA (Electronic Design Automation)

Governments

Mail Order

Newspapers

Open Source Software

Printing

Retail

Venture Capital

All Of The Above

http://rvsoapbox.blogspot.com/2008/12/broken-business-models.html

… clearly this debate is about Business Model B

What is Business Improvement? The model stays the same – but we are just executing it better. (Economists call this “Learning By Doing”). Structural improvements and efficiencies, may be invisible to the customers. New value-adding proposition for customers – supported by existing systems. Radical change to the way we do business. Type of Business Improvement No Change No Change Change No Change No Change Change Change Change Business Model C Business Model B

Role of Enterprise Architect in Business Improvement

Old Paradigm

“ Tell me what your business model is and I’ll turn it into a neat set of line-and-box diagrams. And then we can build some efficient and agile IT systems to support your business for ever and ever …”

But the business is staring at the broken pieces of the old business model (B) wondering where next month’s revenue is going to come from.

New Paradigm

So we need to be able to build real business models – in other words, business model (B) not business model (C).

In some cases, the immediate task is to replace some of the broken pieces of the business, realigning processes and assets and introducing new kinds of capability.

In some cases, a more radical rebuilding is required, finding creative new uses (and therefore revenue streams) for existing capabilities.

Role of SOA in Business Improvement

Some enterprises already have a mature SOA capability, and this should give some advantage in terms of agility.

The key SOA capabilities here involve rapid rewiring – bundling and unbundling the business.

But we should not start every business improvement project trying to turn everything into an opportunity to deploy SOA.

Business Improvement Cycle  where to start? Diagnosis & Prognosis (Cause & Effect) Health-Check (Symptom) Prescription (Solution) Treatment (Delivery)

Business Improvement Cycle Typically includes organizational change as well as technical change. Delivering and coordinating the solution. Treatment The trick is to find the smallest and simplest possible change (or set of changes) that will produce the desired improvement. Designing and planning the solution. Prescription Helps to explain the observed level of performance, and provides a level of confidence that the planned improvements will address the real problem. Determining the cause of performance shortfalls, and evaluating their likely consequences on the business as a whole. Diagnosis & Prognosis Includes both evaluation of current and past performance, and prediction of future performance. Performance assessment – measuring the performance of the business (or selected elements of the business) Healthcheck Comments Description Phase

… to be continued …

This material is extracted from an article in the CBDI Journal for January 2009. For links, please visit http :// cbdi.wikispaces.com/Business+Improvement