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Building a more cohesive organisation using business architecture

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In shifting the focus away from enterprise architecture being seen purely as an IT discipline, organizations are beginning to formalise the development of business architecture practices and business …

In shifting the focus away from enterprise architecture being seen purely as an IT discipline, organizations are beginning to formalise the development of business architecture practices and business architecture outcomes.
The OpenGroup has made the differentiation between business, IT and enterprise architects through their various working groups and certification tracks.
However, industry at present is grappling to try and understand where the discipline of business architecture resides in the business and what value it can provide separate of the traditional project based business analysis focus.
This presentation will take the audience through an overview of some of the critical questions being asked by business and how these are addressed through the discipline of business architecture.
Using both method as well as case study examples, I will show the audience an approach to building more cohesion across the business landscape using business architecture techniques and artefacts.
The presentation will focus on using business motivation models, strategic scenario planning and capability based planning techniques to provide input into the strategic planning process.
It will also highlight some of the outputs through examples from engagements.

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  • 1. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 31 Building a More Cohesive Organisation Using Business Architecture FINAL V.10.0 –11TH MARCH,2013 CraigMartin COOandChiefArchitect ofEnterpriseArchitects
  • 2. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 32 Mobile: +61 419 192 929 Twitter: @eatraining Email: craig.martin@enterprisearchitects.com
  • 3. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 33 Look Familiar 60 000 views and counting
  • 4. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 34 Related Webinar › Slideshare - Bridging business analysis and business architecture - The Open Group webinar » http://slidesha.re/10oCKOY › Video on the OpenGroup Webinar site – » http://bit.ly/105xEYy
  • 5. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 35 EA is a leading international provider of strategy and architecture services and capabilities Championing Practice Awareness in the Community • Chief Architect / CTO Round Tables • Virtual Teaming & Practitioner Collaboration • Open Group Participation • Industry Engagement Lifetime Relationship with Practising Architects • Practitioner career lifecycle management • Architecture training and certification • Professional development • Community involvement • PAYG payroll services • Learning forums Skills Uplift for Organisations & Individuals • TOGAF® 9.1 Certification • ArchiMate® 2.0 • Advanced / Applied EA • Business Architecture • Information Governance • Solution Architecture • BPMN Strategic Relationship With Corporate Clients • Strategy & Architecture Capability Improvement • The delivery of strategic architecture outcomes • Architecture delivery Accelerator Frameworks • Resourcing & Talent • Managed Services Learning Services Architect Services Thought Leadership Enterprise Services
  • 6. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 36 Man, Machine and the Dog ON THE INTRODUCTION PAGE OF A TIER 1 BANK STRATEGY DOCUMENT: "The factory of the future will have two employees: a man and a dog. The man's job will be to feed the dog. The dog's job will be to prevent the man from touching any of the automated equipment.” Warren G Bennis
  • 7. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 37 Utility (Foundation) Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages What's Business About? DIFFERENTIATION The Building Block Analogy
  • 8. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 38 Tactical Strategic Visionary We develop advantages through the use of the strategic planning discipline The language of strategic planning is often inconsistent Mission Strategies Tactics Vision Goals Objectives *Adapted from business motivation model - OMG
  • 9. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 39 The Business strategy is often cascaded down into different functional business units for delivery This often leads to a series of programs functionally divided across the business units Mission Strategies Tactics Vision Goals Objectives Business Unit 1 Program 1 Program 2 Business Unit 2 Program 3 Program 4 Business Unit 3 Program 5 Program 6 Each Business unit tends to create their own strategies to achieve the enterprise goals. These are often not aligned to the other business unit strategies The language of strategy also varies across business units, thus reducing cohesion at the strategic layer Fragmentation therefore begins at the strategic level
  • 10. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 310 The minefield between strategy and projects In navigating the minefield between strategy and execution there are multiple possible failure points STRATEGY PROJECTS    Strategy not sufficiently tied to operations Needed capabilities not properly understood or measured Planners not accountable for delivery Benefits aren’t quantified or traced back to original goals The drivers of strategy are often misaligned  This often leads to some typical stakeholder issues regarding transformation exercises Are we investing in the right areas across the enterprise? Is my investment portfolio balanced across all of the economic value add dimensions? Are the strategic programs aligned, or for that matter, are they the right strategic programs? There is a lot of activity going on out there, how do I know we are doing the right things? Where can we take advantage of synergies across the major strategic programs?
  • 11. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 311 Loss of cohesion of effort across transformation exercises results in loss of cohesion for the business 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 EBITMARGIN,2003-2007 CAPABILITIES COHERENCE SCORE Coca-Cola WrigleyPepsiCo 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 A coherent organisation is one that is thought of and executed as a whole
  • 12. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 312 The goal of a good business model is to create coherence Building Cohesion Requires an Understanding of the components, and how to mix them in a manner that is innovative and differentiating › A Coherent Business Model is one that is synchronised around: » its market position, » its product and service portfolio; and » its most distinctive strategic capabilities › All of the above working together as a system › To bring coherence to these components requires a variety of business skills and disciplines The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 13. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 313 Capability driven › Capability driven architectures are designed to support the strategic objectives of an organisation › Capabilities consist of people, process and technology › To fully understand a capability the three components exists regardless of their maturity level One of the means to drive out cohesion is through capability based planning Capability based planning is one of the tools that looks at the best “mix” of resources required to develop this cohesion Mission Strategies Tactics Vision Goals Objectives Outcome CAPABILITY People Process Tools
  • 14. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 314 The capability mix challenge › Identifying the right resources to support the capabilities › Mixing these resources effectively to achieve the capability outcomes › Identifying mixes of capabilities at a higher level to drive out business outcomes The Correct assembly and mix of these capabilities will help with cohesion across the business and drive out a successful strategy
  • 15. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 315 Finding the Right Business Mixes The Challenge is reducing the time it takes to move from the unresolved business challenges space to the repeatable formulas space Unresolved Business Challenges Rules of thumb Robust, repeatable and replicable formulas & processes Ultimately all innovative algorithms will become utility. * From Roger Martin (2009) The Design of Business
  • 16. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 316 Who is best qualified to operate here? ANALYTICAL THINKING INTUITIVE THINKING * From Roger Martin (2009) The Design of Business GOAL: Reliably produce consistent, predictable outcomes GOAL: Produce outcomes that meet desired objectives Certain business disciplines are required to reduce the time to codify Key disciplines are required to reduce the time taken to move unresolved business challenges into reliable and repeatable processes Should investment go here and who is qualified to operate here? Unresolved Business Challenges Rules of thumb Robust, repeatable and replicable processes Search for “The EA Headspace”
  • 17. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 317 Value Mandate E A B C D Responsibility depends upon the mandate from business The Architecture Mandate - Value Increases when Mandate Increases. Business Architecture is seen as a positive progression away from IT *Adapted from Ruth Malan, Dana Bredemeyer • Maximize Product Profitability • Maximise Market Share • Maximise Customer Lifetime Value Improve project performance Improve enterprise wide program and portfolio performance Improve Business Performance Improve Market Performance (Shareholder Value) Improve Product/Service Performance
  • 18. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 318 Improve project performance Improve enterprise wide program and portfolio performance Improve Business Performance Improve Market Performance (Shareholder Value) Value Mandate Improve Product/Service Performance E A B C D What are the Possible Problem Scenarios? The problem space varies significantly depending upon the mandate. BUSINESS TRANSITION SPACE We are looking to acquire a variety of companies. How can we apportion our assets across the company to best take advantage of an M&A The Business is losing market share due to inefficiencies across the value chain. Find out what the bottlenecks are and fix it The business is going through a major transformation program. Deliver the solution on time and under budget. Design the solution for an HR system
  • 19. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 319 Strategic Themes Initiative 5 Initiative 6 Understanding the Gap Between Strategy and Execution: SCENARIO 1 – BUSINESS IMPROVEMENT - SPAWNING INITIATIVES FROM THE STRATEGY MAP Initiatives straight from strategy often results in loss of cohesion Strategic Themes Initiative 1 Initiative 2 Strategic Themes Initiative 3 Initiative 4 Mandate: Improve enterprise wide program and portfolio performance
  • 20. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 320 Understanding the Gap Between Strategy and Execution: SCENARIO 2 – BUSINESS TRANSITION - DEVELOPING THE UNIFIED BUSINESS MODEL Creating a single unified business model helps build cohesion across the enterprise Strategic Themes Capability 1 Capability 2 Strategic Themes Capability 5 Capability 6 Strategic Themes Capability 3 Capability 4 Mandate: Improve Business Performance
  • 21. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 321 Understanding the Gap Between Strategy and Execution: SCENARIO 3 – PLANNING AND PERFORMANCE - DEFINING THE BUSINESS MODEL FOR CANDIDATE STRATEGIC SCENARIOS Injecting Business Architecture into the Strategic Scenarios Will Improve the Strategic Decisions as well as the execution of that strategy Semi Integrated Universal Bank Product Specialist Customer Owner Infrastructure Provider Mandate: Improve market performance
  • 22. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 322 Understanding the gap between strategy and execution Goals and Drivers help define a driver tree hierarchy or value map The value map will help identify enterprise aligned business unit drivers and leverage points Examples • Revenue enhancement • Margin enhancement • Operating efficiencies • Working capital management • Investment capital productivity • Capital structure optimization CORPORATE LEVEL-SPECIFIC Examples • Pricing strategy • Product assortment • Departmental emphasis • Product cost • Store operating costs • Corporate administrative costs • Operating cash reserves • Inventory management • Accounts payable management • Store base • Leases • Intangible assets • Distribution assets BUSINESS UNIT-SPECIFIC Examples • Purchase frequency • Household penetration • Transaction size • Gross margin • Store operating expense % • SG&A expense % • Distribution cost per case • Days cash on hand • Inventory turns-store and DC • Account payable cycle • Store-level profitability • Debt/Equity ratio • Annual capital investment OPERATING VALUE DRIVERS Earning loyalty & trust with customers & community Make our Processes simpler and faster Empower the frontline to Deliver Integrated Financial Solutions Deliver new and relevant products Create a performance culture REVENUE COSTS WORKING CAPITAL FIXED CAPITAL NOPLAT INVESTED CAPITAL EVA®
  • 23. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 323 Understanding the Strategic Scenarios Each strategic scenario can be evaluated in line with the value disciplines of the organization DRIVER TREES AND VALUE MAPS & GOALS These value disciplines will help decisions around the strategic balance between efficiency and effectiveness There is often fragmentation around value disciplines which results in “competitive” forces and flawed decision making
  • 24. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 324 Developing business models for each scenario Each strategic scenario will have a set of corresponding business model options that would need to be evaluated Semi Integrated Universal Bank The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 25. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 325 Documenting the Business Models Building cohesion requires understanding across the entire business model › Value Chain Analysis › Cross Functional Models › Capability/Business Anchor Models › Process Models › Application Models › Data and information Models › Technology Models › Value Maps › Product and Offering Maps › Design Models › Customer Experience › Journey Maps › Learning Maps › Motivation Models › Business Model Innovation The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 26. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 326 What we have found in large accounts An ownership gap for business architecture exists - Lines of responsibility around cohesion and business architecture, are often unclear Functional Capabilities Cross-Functional Capabilities EnterpriseCoherency Capabilities Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined Cohesion Mandate Undefined - Enterprise Planning Ownership
  • 27. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 327 The functional capability anchor model provides the utility building blocks of the organisation The anchor model represents the "map" of the organisation
  • 28. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 328 The Functional Capability Anchor Model - Overlays Many Overlays Can be Used on this Anchor Model CL
  • 29. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 329 The functional capability anchor model – overlays: The capability overlap is identified to help improve cohesion across the enterprise Clearer visibility of synergies is required to consolidate strategic efforts across the major programs Channel (Relationship Managers, Mobile Sales Force & 3rd Party Distribution) NB Retail Quotation Provision NB Retail Identification and Authentication NB Retail Customer Needs Analysis NB Retail Contact Management NB Retail Account Servicing NB Retail Origination NB Retail Customer Information Management NB Retail Query and Dispute Management NB Retail Lead Referral ANZ Retail Quotation Provision ANZ Retail Identification and Authentication ANZ Retail Customer Needs Analysis ANZ Retail Contact Management ANZ Retail Account Servicing ANZ Retail Origination ANZ Retail Customer Information Management ANZ Retail Query and Dispute Management ANZ Retail Lead Referral Retail Workforce Planning NB Retail Sales Reporting ANZ Retail Sales Reporting ANZ Retail Lead Fulfilment NB Retail Lead Fulfilment NB Retail Credit Decisioning Client Retail Credit Decisioning NB Retail Customer Correspondence ANZ Retail Customer Correspondence NB Retail Customer On-boarding ANZ Retail Customer On-boarding NB Retail Promotion Execution ANZ Retail Promotion Execution ANZ Prospecting NB Prospecting Retail Commission Management
  • 30. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 330 The Functional Capability Anchor Model – Overlays: Hotspots and Issues are identified Business architecture efforts are often tilted towards either an issue centric view or a strategic centric view – both views need to be considered Some hot spots exist under product manufacturing
  • 31. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 331 The Functional Capability Anchor Model – Overlays: Current and Planned Investment is identified Often issues and planned investment are not aligned Investment skewed towards distribution capability
  • 32. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 332 The Functional Capability Anchor Model – Overlays: Comparing Investment to Issues to Identify Loss of Cohesion Comparing Multiple Overlays Often Produces High Value Insights
  • 33. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 333 The Value of The Functional Capability Model Anchor Models Have a Short Business Value Lifespan › The Business Anchor Model tends to be Driven by IT › It is often used as a tool to “talk” to the business to maintain architectural integrity › The capability models resonate more with the IT & architecture disciplines, not necessarily with the business disciplines › The Capability model becomes more the execution focussed piece – it is in fact the downward facing artefact › Cross functional capabilities start to move upwards and resonate more with business stakeholders The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 34. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 334 Using Capabilities in The Functional Anchor Model Capabilities and Capability Models require a different modelling technique › Talk to business stakeholders in terms of People, Process and Tools that drive out an outcome › To come up with the detail around the these resources, you use the business analysis community › Cluster these capability components into capability models later, since these are the models that the architecture discipline tends to use › This approach also helps business stakeholders begin to understand the resources within a capability › This approach also begins to expose the resources for discussion and helps facilitate a the assemble and mix discussions The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 35. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 335 The Cross Functional Capability Anchor Model Helps Identify the Better Mix of Capabilities for Business Outcomes Its at this point that 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
  • 36. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 336 The Cross Functional Capability Model The Process Layer Plays a Strong Role in assembling capabilities for different outcomes 36 PROCESS Sign Up & Integrate CAPABILITY 20. Information Services Management CAPABILITY 15. Sales Execution PROCESS A1. Explore and compare potential providers and services PROCESS B2. Sign up and activate account PROCESS C3. Integrate my store with Australia Post’s API’s precedes precedes precedes precedes BUSINESS SERVICE Customer Sales Management BUSINESS SERVICE Partner Collaboration PROCESS C1. Receive information on how the systems and processes will work PROCESS C2. Install the necessary hardware / software on my systems 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.a u IAM - OIM is processed by ACTOR Fiona participates in Customer CAPABILITY People Process Tools
  • 37. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 337 The Cross Functional Capability Model Customer Experience Journeys can also be used as guides to assembling cross functional capabilities Cust Journey ViewCust Interactions View Capability to Journey A Journey to Capability Capability to Logical Data (via Business Service) Capability to Logical App (via Business Service) D B The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology C We often find product architecture missing in this space: • Value Maps • Product and Offering Maps • Design Models
  • 38. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 338 The Cross Functional Capability Model Use Stereotypes to Kick-start your Efforts Stereotypes are a Recipe Set of Business Model Mixes and their outcomes DIFFERENTIATED BUSINESSMODELS Utility (Foundation) Business Model Stereotypes Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages
  • 39. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 339 Assemble Build Advantages Mix Prolong Advantages Optimise Reduce Disadvantages The Cross Functional Capability Model Utility Business Model Stereotypes provide a set of standard business model execution styles to work with Aggregator Category Leader Consolidator Customizer Disintermediator Experience Provider Fast Follower Innovator Platform provider Premium Player Regulation Navigator Reputation Player Risk Absorber Solutions Provider Value Player These Stereotypes are different from reference models Standard assembly patterns of functional and cross functional capabilities can be leveraged as foundation business models to kick-start your efforts * Based upon “The Essential Advantage” Leinwand & Mainardi
  • 40. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 340 The Cross Functional Capability Model Example: Experience Provider Each stereotype can have a standalone business model to be used as a pattern - Experience Provider Stereotype Mass Market Love Mark Switching Costs Seamless Music Experience Hardware Design Brand Content & Agreements OEMS Record Companies Personalised Support Retail Stores Apple Stores Apple.com iTunes Marketing Builds enjoyment, engagement, and emotional attachment through strong brands or experiences *Apples Example from “Business Model Innovation” Osterwalder
  • 41. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 341 The Cross Functional Capability Model: Using the Business Motivation Model to Focus on Outcome The Motivation Model resonates well with business sponsors › Business Stakeholders often find traditional business architecture models difficult to consume › We found that the motivation model resonates well with business stakeholders › Helps move away from pain point architecture to focus on outcomes › The challenge is that when you show this to the architect its scoffed at – yet when you show it to the business stakeholder their response is – this is Gold – this is what I have been looking for. The Environment The Business Model Market Model Products and Service Model Operating Model  Markets  Industries  Customers  Market Segment  Channels  Customer Relationships  Value Proposition  Offering: Products / Services  Capabilities  Processes / Value Chains  Business Services  Functions  Data  Applications  Technology
  • 42. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 342 Strategic alignment is determined by mapping of capability dimensions to value levers VALUE LEVERS MaintenanceCost Reduction Productsper Month(Brokers andAdvisors) Persistency AcquisitionCost Reduction Numberof Advisorsand Brokers PremiumSize FundRetention Percent Contribution of Current Capability Resources to Target Values 48% 167% 100% 80% 18% 0% 60% CAPABILITYDIMENSIONS Products Business Process Information Technology (Infrastructure) Applications Facilities External Relations (Supply Chain and Partnerships) Organization and People Very High High Medium Low/Medium None 0-49% of Target Value 50-74% of Target Value 75% of Target Value
  • 43. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 343 Use Capability Mixes to Re-align the Investment Portfolio › Provide executives with a cohesive, non-project based view of the investment spend › Address Capex and Opex conflicts › Address duplication of effort across the portfolio landscape › Maintain alignment of the ensuing programs › Allows business stakeholders to have a consistent business focussed view of the project investment and its status Support the investment planning cycle and cohesion of programs Removed
  • 44. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 344 Plan & Market Information, Knowledge & Systems People Assets & Services • Strategically critical • HIGH coverage by in-flight initiatives • NOT strategically critical • HIGH coverage by in-flight initiatives • Strategically critical • LOW coverage by in-flight initiatives • NOT strategically critical • LOW coverage by in-flight initiatives HIGH COVERAGE LOW COVERAGE Initiative Coverage (primary impact on L1 and L2 activities only) Capabilities with ‘high’ potential for improvement from issues layer Often the Investment Slate can be adjusted to cater for the misalignment – This is the biggest challenge Ref Capabilities # In-flight Initiatives % Gap C14 Sales Planning and Management 9 0% C15 Sales Execution 6 0% C30 Network Development 6 0% C3 Plan to Realize 5 11% C10 Channel Strategy Management 4 25% Ref Capabilities # In-flight Initiatives % Gap C17 Customer Service 9 0% C34 Track and Trace 4 0% C45 Information, Knowledge & Systems Delivery 2 14% C43 People Day-to Day Management 4 40% Ref Capabilities # In-flight Initiatives % Gap C1 Research, Analysis & Insights 4 50% C8 Market Planning 3 60% C13 Business Performance Management 4 75% C2 Corporate Vision & Strategy Management 2 100% C5 Acquisition and Divestment 2 100% C40 People Planning 4 100% C48 Asset Lifecycle Management 3 100% Ref Capabilities # In-flight Initiatives % Gap C44 Information, Knowledge & Systems Planning 11 63% C45 Information & Knowledge Governance 11 67% C41 Recruit & Retain People 5 21% C4 Innovation Management 3 100% C51 Supplier Relationship Management 2 100% Strategically ImportantYES NO
  • 45. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 345 Dealing with The Change Fallout Building Cross Functional Teams to Facilitate Change Creation of a Unified Team of cross enterprise disciplines to help socialise the changes required for the investment slate Change Manager Finance PMO Business Improvement Strategy Technology Combination of People, Process & technology to drive out an outcome through projects
  • 46. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 346 The degree of change effort to move to the future state is evaluated Change Frameworks applied to your process components can help determine impact 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 Incremental Improvement Significant Improvement Changethe Game 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 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 gets conditional 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 gets conditional 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 advanced2 3
  • 47. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 347 Business Model Assessment Business Model Components 0.0 1.0 2.0 3.0 4.0 5.0 Shareholder Customer Employee Product Offering Price Structure Distribution Brand / Reputation Customer Segment Customer Experience Network Capability Operational Efficiency / IT Financial Capability Business Systems Customer Product Vision Each Candidate Business Model Can be Evaluated Against the Value Driver Dimensions Measure the value of each possible operating model and their ability to support and deliver the strategic scenarios
  • 48. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 348 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. Strategic Scenarios Cross Functional Capabilities
  • 49. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 349 Roadmapping 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 76542 2 3 7 8 9 1 7 6 5 4 2 Maturity 9 Capabilities increase and decrease maturity over time depending upon outcomes. Plan for increments that can be absorbed by the business
  • 50. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 350 The Planning Roadmap Outcome Architecture Roadmap – 3 Year Plan (FY11 to FY14)
  • 51. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 351 Socialise the Architecture: The Architecture Storyboard Walkthrough These methods help the architecture speak for itself
  • 52. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 352 In Closing: Responsibility
  • 53. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 353 Business Architecture and Business Analysis Which of these disciplines are the most qualified to handle the relationship with the stakeholder? Context of Work UnderlyingCompetency Detail Focus Big Picture FoundationalAdvanced Entry level BA Junior BA Inter- mediate BA Senior BA Advanced Generalist BA Analyst BizArch Senior BizArch Principal BizArch Master BizArch Distinguished BizArch Business Analysis Business Architecture Strategic Business Architect Principal Business Architect Business Architect
  • 54. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 354 Lack of Opportunity The Current Business Analysis Career Path Dilutes the true Value The progression or the business analyst often moves from business understanding to management and delivery type functions Time KnowledgeOfBusiness Entry Level BA Junior BA Intermediate BA Senior BA BA Project Lead BA Program Lead BA Practice Leader Business Relationship Manager Principal Business Architect Strategic Business Architect Delivering Path Thought leadership in terms of the utility layer, standards, replicating, reliability etc. Managing Path Thought leadership in terms of management, delivery, change and politics Planning Path Thought leadership in terms of innovation, business models and mixes
  • 55. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 355 The Business Architect Mandate Role Confusion Exists Due to Lack of a Clear Mandate – this results in overlap of function, output and value Environ. Models, Competitor Analysis, Strategic Diagnosis Segmentation Positioning, Strategy Map, Decision Trees Perceptual mapping, distribution channels and models Customer Experience, Journey Maps, Learning Maps Campaign Models, Advertising Messages, Key Messages Competitor Strategy, Expansion Strategy, Innovation Strategy Marketing Mix, Product Lifecycle Model, Pricing and Cash Flow analysis Regression Analysis and forecasting, Platform and Expansion Plans Design models, Value Maps, Product and Offering Maps, Design Models Product Line plans Motivation Model, Driver Trees, Systems Theory Org. Model and Structures, Org. Culture, Partner and supplier models Change Models, Organization Unit model, Org. learning models Resource Management and Scheduling procedures Contracts, Time and Expense Procedures Performance, Business Structures, Value Maps Risk Models, Growth Models, Capital Structure Models Performance Alignment model, Root Cause Model Balanced Scorecard, Financial reporting Financial Reporting Procedures, EPM Value Chain, Value Streams, Decisions & Events Capability Models Process Maps Function Models Use Cases Process Models Workflows & Activities Operating procedures Info Mgt Principles Info Use Policies Meta-Data Definition Subject Classification Information Classification Enterprise Info Model, Info Lifecycle Model, Human Interface Model Custodian Model, Integration View, Presentation Models Security Rules, BI Reports, User Interface, Warehouse and datamarts Health Assessment Application Principles Application Framework Current State Target State Services Definitions Function Models Wiring Diagrams Activity Views Patterns Deployment Model Application Standards Resource Estimates? Class/Module View Configuration Models Data Principles Reference Data Stds Data Dictionary, Data quality processes Data Directory Field Level Views Technology Watch Health Assessment Asset Lifecycle Technology Principles Tech Reference Model Current State Target State Service Catalogue Service Definition Mud Maps (N/W, etc.) Technology Standards CMDB Management Contextual Conceptual Logical Physical Implementation Market Application Data Technology Enterprise Architect Solution Architect Products & Services Organizational Performance Process & Function Info Business Architect Strategic Business Architect Principal Business Architect Senior Business Analyst / Senior Business Architect Analyst Business Architect Business Analyst
  • 56. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 356 Confusion Regarding the Business Architecture RoleThis is where the crowding is. The Bridge Between Business and Technology. Individuals need to differentiate themselves from this space Environ. Models, Competitor Analysis, Strategic Diagnosis Segmentation Positioning, Strategy Map, Decision Trees Perceptual mapping, distribution channels and models Customer Experience, Journey Maps, Learning Maps Campaign Models, Advertising Messages, Key Messages Competitor Strategy, Expansion Strategy, Innovation Strategy Marketing Mix, Product Lifecycle Model, Pricing and Cash Flow analysis Regression Analysis and forecasting, Platform and Expansion Plans Design models, Value Maps, Product and Offering Maps, Design Models Product Line plans Motivation Model, Driver Trees, Systems Theory Org. Model and Structures, Org. Culture, Partner and supplier models Change Models, Organization Unit model, Org. learning models Resource Management and Scheduling procedures Contracts, Time and Expense Procedures Performance, Business Structures, Value Maps Risk Models, Growth Models, Capital Structure Models Performance Alignment model, Root Cause Model Balanced Scorecard, Financial reporting Financial Reporting Procedures, EPM Value Chain, Value Streams, Decisions & Events Capability Models Process Maps Function Models Use Cases Process Models Workflows & Activities Operating procedures Info Mgt Principles Info Use Policies Meta-Data Definition Subject Classification Information Classification Enterprise Info Model, Info Lifecycle Model, Human Interface Model Custodian Model, Integration View, Presentation Models Security Rules, BI Reports, User Interface, Warehouse and datamarts Health Assessment Application Principles Application Framework Current State Target State Services Definitions Function Models Wiring Diagrams Activity Views Patterns Deployment Model Application Standards Resource Estimates? Class/Module View Configuration Models Data Principles Reference Data Stds Data Dictionary, Data quality processes Data Directory Field Level Views Technology Watch Health Assessment Asset Lifecycle Technology Principles Tech Reference Model Current State Target State Service Catalogue Service Definition Mud Maps (N/W, etc.) Technology Standards CMDB Management Contextual Conceptual Logical Physical Implementation Market Application Data Technology Enterprise Architect Solution Architect Products & Services Organizational Performance Process & Function Info Business Architect Strategic Business Architect Principal Business Architect Senior Business Analyst / Senior Business Architect Analyst Business Architect Business Analyst
  • 57. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 357 The Various Roles and How They Support Decision Making Moving unresolved business problems into the utility space is a journey across the complexity space that is supported by both the business architects and business analysts Software Automation Projects Funds investment Widget assembly Credit card approval Inventory Management Outsourcing Projects Major re- design projects Six-sigma based process improvement analysts 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 High 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 ProcessComplexityandDynamics Complex negotiation, design, or decision process Many business rules; expertise involved Some business rules Procedure or simple algorithm Organization Heuristics Principal Business Architects Business Analysts Strategic Business Architect Senior Business Analysts *Adapted from “Business Process Change” by Paul Harmon
  • 58. | BUILDING A MORE COHESIVE ORGANISATION USING BUSINESS ARCHITECTUR E | ENTERPRISE ARCHITECTS © 201 358 Questions?