Understanding Globalization with VPEC-T
<ul><li>What are the drivers for innovation, both business and technological? </li></ul><ul><li>What are the organizationa...
IT Enterprise Cloud Ecosystem externalization complexity
A picture of Externalization – Outside-In <ul><li>Access to  content </li></ul><ul><li>Collaboration with people ( trust )...
How Does Content Change? v alues p olicies e vents c ontent t rust Diverse schemas  Common schema Double Description  Si...
A Spectrum of Content The Web Container:  Human Brains Container:  Applications  & Databases Container:  The Organization ...
Container: Human Brains Highly   Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Creativity Perception & Selective re...
Container: Applications and Databases Highly   Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Technology  Translatio...
Container: The Organization Highly   Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Corporate Values, Privacy, Polic...
Container: Web Communities The Web Highly   Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Web Standards & Ubiquitou...
Information Exhaust & Corporate Blindness The Web Container:  Human Brains Container:  Applications  & Databases Container...
Dissolving the Barriers The Web Container:  Human Brains Container:  Applications  & Databases Container:  The Organizatio...
How Do Events Change? v alues p olicies e vents c ontent t rust Intelligence – Identifying the Unknown Unknowns  Custom A...
Events connect Two Worlds <ul><li>Real-World </li></ul><ul><li>Information System </li></ul>« Customer Information » Aller...
How Do Policies Change? v alues p olicies e vents c ontent t rust Collaborative  Directive Open  Closed Edge  Boundary,...
What Does “Open” Mean? <ul><li>Technology </li></ul><ul><li>Portability </li></ul><ul><li>Interconnection </li></ul><ul><l...
Architecture for managing complexity <ul><li>Dimensions of Business Complexity </li></ul><ul><li>Delivery / Interface  </l...
Types of Demand <ul><li>Symmetric Demand </li></ul><ul><li>Suppliers compete by providing the best product or best solutio...
1 st  Asymmetry technology    product 2 nd  Asymmetry business    solution 3 rd  Asymmetry customer demand    customer ...
Stratification – Airline Example Airline Infrastructure Airline Assets Airline Process Travel Solution Passenger Services ...
How Do Values Change? v alues p olicies e vents c ontent t rust Abundance  Scarcity Positive Sum (Win-Win)  Zero Sum (Wi...
Multi-Sided Markets  <ul><li>One-Sided Market </li></ul><ul><li>Two-Sided Market </li></ul>A B Simple value proposition Co...
How Does Trust Change? v alues p olicies e vents c ontent t rust Source: Ward & Smith 2003 Authentic Trust Network Trust D...
Differentiating Capabilities:  The Architecture of Knowledge <ul><li>Core </li></ul><ul><li>Partnering </li></ul><ul><li>H...
References <ul><li>Amin & Cohendet, Architectures of Knowledge (Oxford University Press, 2004) </li></ul><ul><li>Nigel Gre...
Richard Veryard <ul><li>Director, Next Practice Research Initiative </li></ul><ul><li>http://npri.wikispaces.com/ </li></u...
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Globalization and VPEC-T

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  • Session One.
  • Session One.
  • Define what we mean by externalization For us architects a picture’s always better.. The access to information and communities on the Web by organizations and the people within them Collaboration with people and visibility of events (process state changes) outside the enterprise Ubiquitous Event visibility within the enterprise The use of external information and data processing services by people and corporate IT The opening-up of data from within corporate applications –for sharing within the enterprise and, selectively, beyond
  • Focus on the documents, conversations or messages that are produced and consumed by business activities. These are the dialogues we use to share a plan, a concept, a history and/or the details of a person, place or thing.
  • How we might think about business information when we put &apos;externalization&apos; front of mind Information Containers And the Semantic Web The Container affects its content. Each type of container affects the information held within it. Information is only understood within the context of its container .
  • Outcome: Information Exhaust &amp; Corporate Blindness
  • Externalisation: An approach re-shapes the Business Systems Container New Style Containers: Externalised Business Systems and Business Systems Infrastructure? A ‘closed openness’ starting from open? Dissolves the barriers between internal containers by adopting external information standards and technologies focused on the information rather than function … but to do this we need to think a little differently about how we describe the requirements of the businesses information system
  • Collaborative Composition (from User to Prosumer)
  • Notions of openness can be divided into those that focus on technological openness , those that focus on organizational/management openness , and those that focus on market openness .   Technological openness Allowing the use of components from various suppliers in the design and development of computer systems, using common standards to help achieve significant economic benefits. Includes portability , interconnection , interoperability and distributability . Organizational or  management openness Open-ended and incremental systems. Continual evolution and adaptation. Absence of barriers. Possibility of surprise. Market openness Level playing field. Low entry barriers. Low exit barriers. Technological openness The idea of technologically open systems is to allow the use of components from various suppliers in the design and development of computer systems, using common standards to help achieve significant economic benefits. Technological openness can be characterized in the following ways:   Portability The capability of implementing programs without change on different computer systems. Interconnection The ability to move information between computing systems using communications. Interoperability The ability of joint working between interconnected computing systems. Distributability Extends the interoperability idea to allow processes and information to be provided and migrated automatically to the most convenient point of an interconnected set of computing systems. Organizational / management openness Organizational/management openness can be characterized in the following ways:   Evolution The ability of an information system to be maintained to respond to changing requirements.  Software engineers such as Manny Lehman have encouraged us to consider the information system, across its operational life-cycle, as an evolving object. Unboundedness The absence of barriers to the provision of information and services for the end-user.  The ability of unexpected information, from unexpected sources, perhaps even in unexpected formats, to somehow enter the system. This relates to the notion of the open-ended incremental and continually evolving system discussed by Hewitt and de Jong. Business information systems have always been open, to some extent. Thus instead of a simplistic binary alternative - fully closed / fully open - it is more useful to consider a spectrum of degrees of openness, with full conformance to open system standards being positioned at (or at least towards) the fully open end of the spectrum. Market openness Market openness is often referred to as the &apos;level playing field&apos;. It can be characterized in the following ways:   Low entry barriers The ability of new competitors to &apos;freely&apos; enter a market. Low exit barriers The ability of competitors to &apos;freely&apos; leave a market. Barriers to entry and exit are partly technological and partly socio-political. Of course, there are few if any markets where it would be appropriate or possible to altogether eliminate barriers to entry or exit. This is partly to do with the fact that operating in a market involves the acquisition of obligations .   
  • Multi-channel is often viewed as mostly a technology issue where gradual and unplanned introduction of new customer facing technologies has led to disparate solutions, business processes and supporting information data. The separate development of call center and eCommerce channels everywhere is a good example. We can see widespread evidence of the results from personal experience with different information and prices between one company’s call center and eCommerce site. Or manifestly different processes and charges between branch, ATM, and kiosk systems. But it can be helpful to scope multi-channel more broadly than purely technology channels because the same issues can occur in many different contexts. On this slide we suggest a number of channel types that all follow the same pattern of channel specific behaviors combined with common behaviors that cross channel and in many cases opportunities to enhance business models with cross channel coordination or switching. Developing a clear understanding of these for a specific enterprise of ecosystem is a prerequisite for effective architecture. The Delivery or Interface is always going to be the most obvious driver, usually driven by technology. However channel is also likely to be characterized by class of consumer or product class such as enterprise, SME, retail consumer etc. But channel thinking shouldn’t be restricted to enterprise systems, it’s also useful in government where citizen or intra government processes will exhibit all the same issues and opportunities. Business channel is obvious. In the Dell based case study this is clearly a major consideration, and Dell reported the business value of a specialized third party partner channel that achieved considerable pull through business by facilitating real time integration with partner bid and deal processes. Type of pricing mechanism is clearly another major source of complexity. Pricing is not usually regarded as a kind of “channel”, but it has a lot of the same structural characteristics. C onsider how much consideration is given when designing the support for the eCommerce channel to creating integration with other pricing mechanisms. Product delivery technology also has a big impact on channels. The current uptake of SaaS and On Demand services will inevitably be creating new demand for channel support systems. And of course the answer is that in the initial stages new management systems are developed for the new delivery systems, and only after the fact is consideration given to integration. This is particularly true of SaaS, and we can expect that enterprise uptake of SaaS will be cautious and slow until the SaaS delivery channel is properly integrated with service management, help desk and support and security systems.
  • In a recent interview, the chief executive of GE pointed out that in order to create propositions that their customers would value more than their competitors’ propositions, GE had to know more than their competitors about their customers’ needs. Suppliers can no longer just compete by providing the best product or best solution to a defined requirement. They must enter the customer’s world, and understand it as a context-of-use that conditions the nature of the demands that the customer makes. Suppliers are used to managing the risks associated with satisfying the forms of customer demand that they can predict. And suppliers expect their customers to define their requirements before committing to underwriting the risks they will carry in satisfying those requirements. In this way suppliers can maintain a symmetrical relationship between their capabilities and their clients’ demands. But now we are seeing the emergence of business situations where demand has to be acknowledged as asymmetric; this means that the customer is always wanting ‘more’ than the supplier can provide. This ‘more’ constitutes a value deficit that companies such as GE cannot afford to ignore. How much of this value deficit is going to be addressed by the supplier? This question has to involve balancing the risks and rewards on both sides of the relationship. How, then, to find this balance? To answer this question, new kinds of risk have to be considered on the demand-side in addition to those on the supply-side, and a wider understanding of the supply-demand relationship has to be established.
  • Value Stairs Source: Richard Veryard &amp; Philip Boxer, Metropolis and SOA Governance. Microsoft Architecture Journal, July 2005 http://msdn.microsoft.com/en-us/library/aa480051.aspx Asymmetry arises at the edge of the organization, and means that the forms of demand are increasingly specific to the context in which they arise. The first asymmetry involves separating out technology from the supply of specific products. This requires modeling of possible behaviors that can be supported (so Microsoft or car manufacturing has to modularize itself in support of families of technology use). The second asymmetry requires separating out business models that can organize supply from the solutions that are on offer. This requires modelling of the possible forms of business geometry (so rail maintenance or retail services have to use a franchise model to allow the variation in business organization to accommodate the variety of ways in which the service needs to be implemented). And the third asymmetry requires separating out the different contexts of use. This requires modelling of the possible forms of demand within the contexts in which they arise (so that financial or care services are having to take up the way the through-time wealth/conditions are managed in a way that responds to different forms of context-of-use). The result is a stratification that describes six layers of organisation through which underlying technology is brought into relation with ultimate context-of-use:
  • The passenger consumes services produced by a system of systems – including airline, airport, immigration, mobile phone, financial, and so on. The interoperability between these services (how long does it take me to get to the gate, can I use my phone on the plane) critically affects both the usability of the services and the ultimate experience. As an initial simplification, we can draw a dotted blue line between outside/inside. However, as the stratification is elaborated, the separation between inside and outside may become more complicated.
  • How does this apply to IT? In the past, IT could think of itself as a supplier of systems to the business. Each system had an “owner” somewhere in the business. The IT portfolio typically reflected the organization structure, at least to some extent. Nowadays, IT is providing a complex set of business services, which can be thought of as a (conceptual) platform upon which various business collaborations can take place. (This is a broader notion of “platform” than the traditional notion.)
  • Another way of differentiating core and non-core is by knowledge intensity. In a later session, we will show how the core/non-core notions of business strategy links to the knowledge cycle. Reference: Amin &amp; Cohendet, Architectures of Knowledge (Oxford University Press, 2004)
  • Globalization and VPEC-T

    1. 1. Understanding Globalization with VPEC-T
    2. 2. <ul><li>What are the drivers for innovation, both business and technological? </li></ul><ul><li>What are the organizational and technological challenges generated by these business opportunities? </li></ul>v alues p olicies e vents c ontent t rust IT Enterprise Cloud Ecosystem
    3. 3. IT Enterprise Cloud Ecosystem externalization complexity
    4. 4. A picture of Externalization – Outside-In <ul><li>Access to content </li></ul><ul><li>Collaboration with people ( trust ) </li></ul><ul><li>Common visibility of events </li></ul><ul><li>Internal use of external content ( policies ) </li></ul><ul><li>Selective sharing of content ( values ) </li></ul>1 2 3 4 5 1 2 3 4 5 4 Source: Green & Bate 2007 Enterprise IT Applications Enterprise Web Processing Services Information Services
    5. 5. How Does Content Change? v alues p olicies e vents c ontent t rust Diverse schemas  Common schema Double Description  Single source of truth Informal / Unstructured  Formal / Structured
    6. 6. A Spectrum of Content The Web Container: Human Brains Container: Applications & Databases Container: The Organization Container: Web Communities Highly Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    7. 7. Container: Human Brains Highly Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Creativity Perception & Selective recall Shadow IT is used to support gaps in corporate IT Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    8. 8. Container: Applications and Databases Highly Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Technology Translation Structure & Binding Applications & Databases are built to meet vertical needs Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    9. 9. Container: The Organization Highly Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Corporate Values, Privacy, Policy & Regulation Only 10% of business process information is automated by IT – limited corporate visibility Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    10. 10. Container: Web Communities The Web Highly Internalized ‘ Mine’ Highly Externalized ‘ Anyone’s’ Web Standards & Ubiquitous Access Self-regulating Communities Useful Information and services might be out there…. Is my business visible to these communities? Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    11. 11. Information Exhaust & Corporate Blindness The Web Container: Human Brains Container: Applications & Databases Container: The Organization Container: Web Communities Highly Internalised Highly Externalised Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    12. 12. Dissolving the Barriers The Web Container: Human Brains Container: Applications & Databases Container: The Organization Container: Web Communities Highly Internalized Highly Externalized Source: Green & Bate 2007 Data Processing to Data Publishing Data Publishing to Data Processing
    13. 13. How Do Events Change? v alues p olicies e vents c ontent t rust Intelligence – Identifying the Unknown Unknowns  Custom Alerts – Identifying the Known Unknowns External  Internal Unanticipated Weak Signals  Anticipated Strong Signals
    14. 14. Events connect Two Worlds <ul><li>Real-World </li></ul><ul><li>Information System </li></ul>« Customer Information » Allergic to shellfish « Recipe Information » Contains shellfish Customer Soup Hospital <ul><li>Real World Effects </li></ul><ul><li>Customer drinks soup </li></ul><ul><li>Customer has allergic reaction </li></ul><ul><li>Customer goes to hospital </li></ul>Waiter <ul><li>System Responsibility </li></ul><ul><li>How was service described? </li></ul><ul><li>Who knew customer was allergic? </li></ul><ul><li>Who knew soup contained shellfish? </li></ul>Cook
    15. 15. How Do Policies Change? v alues p olicies e vents c ontent t rust Collaborative  Directive Open  Closed Edge  Boundary, Perimeter
    16. 16. What Does “Open” Mean? <ul><li>Technology </li></ul><ul><li>Portability </li></ul><ul><li>Interconnection </li></ul><ul><li>Interoperability </li></ul><ul><li>Distribution </li></ul><ul><li>Enterprise </li></ul><ul><li>Evolution, Learning </li></ul><ul><li>Unboundedness </li></ul>Ecosystem Level Playing Field Low Entry Barriers Low Exit Barriers
    17. 17. Architecture for managing complexity <ul><li>Dimensions of Business Complexity </li></ul><ul><li>Delivery / Interface </li></ul><ul><li>eCommerce, Web, Call Centre, Kiosk, SMS, </li></ul><ul><li>Product Class/Consumer </li></ul><ul><li>Enterprise, SME, Retail Consumer, Citizen, Intra-government </li></ul><ul><li>2-sided markets </li></ul><ul><li>Commercial Channel </li></ul><ul><li>Wholesale, Retail, Corporate, Partner, Direct </li></ul><ul><li>Brand integration, mergers & acquisition </li></ul><ul><li>Pricing Type </li></ul><ul><li>Credit, eCommerce, Cash, Direct Debit </li></ul><ul><li>Subscription, Fixed-Price, Pay-as-you-Go, </li></ul><ul><li>Product Delivery Technology </li></ul><ul><li>Managed Service, DVD, SaaS </li></ul><ul><li>CD, DVD, Video on Demand </li></ul><ul><li>How can we avoid a combinatorial explosion of complexity in IT systems? </li></ul>Business Complexity System Complexity
    18. 18. Types of Demand <ul><li>Symmetric Demand </li></ul><ul><li>Suppliers compete by providing the best product or best solution to a defined customer requirement. </li></ul><ul><li>Predictable demand patterns </li></ul><ul><li>Straightforward relationship between internal capabilities and external demands </li></ul><ul><li>Asymmetric Demand </li></ul><ul><li>Value deficit - customer is always wanting ‘more’ than the supplier can provide. </li></ul><ul><li>Suppliers must enter the customer’s world, understand the context-of-use from which the demands emerge. </li></ul>
    19. 19. 1 st Asymmetry technology  product 2 nd Asymmetry business  solution 3 rd Asymmetry customer demand  customer experience Technology Product Business Solution Customer Demand Customer Experience Source: Veryard & Boxer 2005
    20. 20. Stratification – Airline Example Airline Infrastructure Airline Assets Airline Process Travel Solution Passenger Services Passenger Experience 1 2 4 6 3 5 Source: Veryard & Boxer 2005 outside inside
    21. 21. How Do Values Change? v alues p olicies e vents c ontent t rust Abundance  Scarcity Positive Sum (Win-Win)  Zero Sum (Win-Lose) Long-Tail  Pareto
    22. 22. Multi-Sided Markets <ul><li>One-Sided Market </li></ul><ul><li>Two-Sided Market </li></ul>A B Simple value proposition Complex value proposition
    23. 23. How Does Trust Change? v alues p olicies e vents c ontent t rust Source: Ward & Smith 2003 Authentic Trust Network Trust Decentralized Commodity Trust Authority Trust Centralized Responsive Stable
    24. 24. Differentiating Capabilities: The Architecture of Knowledge <ul><li>Core </li></ul><ul><li>Partnering </li></ul><ul><li>High trust / security </li></ul><ul><li>Competence </li></ul><ul><li>Network </li></ul><ul><li>Medium trust / security </li></ul><ul><li>Peripheral </li></ul><ul><li>Market </li></ul><ul><li>Low trust / security </li></ul>knowledge intensity distance from core Source: Amin & Cohendet 2004
    25. 25. References <ul><li>Amin & Cohendet, Architectures of Knowledge (Oxford University Press, 2004) </li></ul><ul><li>Nigel Green & Carl Bate, Externalisation – The Next Principle for Information Sharing? (Cap-Gemini 2007) </li></ul><ul><li>Nigel Green & Carl Bate, Lost in Translation (Evolved Technologist, 2007) </li></ul><ul><li>Richard Veryard & Philip Boxer, Metropolis and SOA Governance (Architecture Journal 5, 2005) </li></ul><ul><li>Aidan Ward & John Smith, Trust and Mistrust – Radical Risk Strategies in Business Relationships (Wiley 2003) </li></ul>
    26. 26. Richard Veryard <ul><li>Director, Next Practice Research Initiative </li></ul><ul><li>http://npri.wikispaces.com/ </li></ul><ul><li>http:// demandingchange . blogspot.com / </li></ul><ul><li>http://www.linkedin.com/groups?gid=2201459 </li></ul>

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