Business Agility
                                            using




Process Frameworks
Herbert Heinzel
Vice Chairman Va...
Overview


•   Review our Primary Reference Model, VRM
•   What are the Business Needs for use of a Value Chain
    Refere...
VRM Value Proposition
•   Our VCG strategic imperative is to create an industry open standard
    reference model for the ...
What the Value Chain Operations Reference
          (VRM) model enables:
 – Integration of the three critical domains unde...
The Enterprise Characterized by VRM
                                    Business Mission & Strategy

                     ...
Strategic Level - Macro Processes

                                    PLAN
On the Strategic Level Plan is a overarching p...
The VRM Tactical Level Processes
The Tactical Level can be described being instituted for “Horizontal Value Chain
Process ...
VRM enables a Systems Based Approach
Govern processes support objectives                          Plan processes balance r...
VRM aligns Strategy and ICT Enablers

Organization of Value Chains and
Lines of Business given priorities    BUSINESS     ...
VRM Methodology Coverage


               Strategic Methodology
               The ValueCard and all processes in
        ...
VRM Value Cards
External Partnerships Developed with the
Network Value Card
                                              ...
Balanced Scorecards for Specific Domains
The need for Business Agility
•   The world has changed dramatically in recent years
•   Organizations in the public and p...
Industry Challenges
                                        Accelerated
                                        Technology...
Strategic Alignment Links Organizational
           Goals and Activities
                           Purpose               ...
Migrating to SOA is an Opportunity
                                                     New Usage and New
                ...
Value Streams* modeled in VRM
                     will help define Services
• Prospect to Customer                       ...
Lessons Learned using VRM

• The common taxonomy minimizes risk of confusion
  amongst participants, especially as globali...
Identifying Value Opportunities using Value
              Streams modeled in VRM
•   This approach establish the criteria ...
Frameworks to Enable Business Agility

                             Business Frameworks


  Process Reference Model
      ...
Thank you
Herbert Heinzel
Business Agility And Process Frameworks Summary Ei
Business Agility And Process Frameworks Summary Ei
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Business Agility And Process Frameworks Summary Ei

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Value Chain Management and reference Architectures

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Business Agility And Process Frameworks Summary Ei

  1. 1. Business Agility using Process Frameworks Herbert Heinzel Vice Chairman Value Chain Group H2O GmbH
  2. 2. Overview • Review our Primary Reference Model, VRM • What are the Business Needs for use of a Value Chain Reference Model? • What have we learned so far? • How can VCOR be used? • Vision for Business Frameworks
  3. 3. VRM Value Proposition • Our VCG strategic imperative is to create an industry open standard reference model for the value chain that gains wide acceptance and adoption. – Coverage of all business domains and inter-company Collaboration – Support the ongoing evolution of business – Value Chain versus technology focus when introducing a new product to the market or building a new supply chain
  4. 4. What the Value Chain Operations Reference (VRM) model enables: – Integration of the three critical domains under one framework: • Global Product Development. • Global Supply Network Integration. • Global Customer Success. – Collaboration with a “common language, process-based” syntax and semantics. – Global process integration. – Global “real benchmarking” – A foundation for a successful Service Oriented Architecture game plan.
  5. 5. The Enterprise Characterized by VRM Business Mission & Strategy Corporate Governance Core Business Processes Value Value Collaboration Process Process Process Process Process Process Process Process Process Collaboration Mang. Mang. Mang. Mang. Mang. Mang. Mang. Mang. Mang. Suppliers Customers Market Research Develop Acquire Build Fulfill Brand Sell Support SRM CRM Supply Supply Network Network Dev. Dev. Support Business Processes Information Management Technology Development Human Resource Management Finance & Accounting Quality & Business Excellence Safety, Health & Environment
  6. 6. Strategic Level - Macro Processes PLAN On the Strategic Level Plan is a overarching process aligning strategic objectives with tactical and execution abilities in the value chain working in a close relationship with the Strategic Level Govern and Execution Processes in the model GOVERN On the Strategic Level Govern is a overarching process supporting Strategic objectives and enabling the value chain to operate through rules, policies and procedures in a close relationship with the Strategic Level Plan and Execute Processes in the model. EXECUTE The Strategic Level Execute Process overarches all the execution processes in the model in a strategic context to support the value-adding processes related to a product or service to customer requirements. The Execute Process operates within the limits of the Management criteria from Govern and to the parameters defined by the Plan Processes Process.
  7. 7. The VRM Tactical Level Processes The Tactical Level can be described being instituted for “Horizontal Value Chain Process Re-Engineering” encompassing all critical Business Domains Market Brand
  8. 8. VRM enables a Systems Based Approach Govern processes support objectives Plan processes balance requirements with and enable the value chain to operate available resources to align objectives with through rules, policies and procedures tactical and execution abilities in the value chain in a close relationship with the Plan and working in a close relationship with the Govern Execute Processes in the model. and Execution Processes in the model Govern Goals & Plan Objectives Rules, Metrics & Information INPUT OUTPUT Execute Execute The Execute processes support value-adding related to a product or service to customer requirements. The Execute processes operate within the limits of the management criteria from Govern and to the parameters defined by the Plan processes.
  9. 9. VRM aligns Strategy and ICT Enablers Organization of Value Chains and Lines of Business given priorities BUSINESS Goals, Products, through Priority Dimensions Customers STRATEGY Frameworks and methodology for Filling Aligned Measures tied to each specific layer of processes. Business defining and improving processes, sub-processes and activities the Processes Best Practices Tied to Each Specific Sub-process or activity Gap IT APPLICATIONS IT APPLICATIONS Infrastructure Options & & Specific Applications INFRASTRUCTURE INFRASTRUCTURE
  10. 10. VRM Methodology Coverage Strategic Methodology The ValueCard and all processes in Govern, Plan, and Execute in VCOR can be applied for gaining competitive advantage. Tactical Methodology The second level of the model contains processes supporting the implementation of strategic goals through tactical decisions and configurations. Operational Methodology The third level of the model establishes links between enterprise- specific activities and the value chain.
  11. 11. VRM Value Cards External Partnerships Developed with the Network Value Card Business Strategy Internal Tactical and Operational Priorities Developed with the Enterprise Value Card •Domain Value Cards •Tactical Configurations and Improvements •Operational Improvements
  12. 12. Balanced Scorecards for Specific Domains
  13. 13. The need for Business Agility • The world has changed dramatically in recent years • Organizations in the public and private sector are confronted with an environment not seen before • New strategies, structures, and operating practices are required to manage change and create and sustain advantage • Companies need to make faster, more informed decisions— communicating and collaborating immediately and effectively • Companies need to better understand and serve their customers globally – They need to seamlessly interact with suppliers and distributors – They need to seize market opportunities faster than their competitors – They need to be more efficient than ever • Business agility can be achieved if BPM can – Accelerate new process deployment – Facilitate changes to existing processes.
  14. 14. Industry Challenges Accelerated Technology Regulation Advancement and Activism Focus Shifting Shorter Product to End Life Cycles Accelerated Customers Reduced time-to-market Quoting Partner Network Getting More Complex Increased Competition Flexibility and agility to respond Contractors to changing business needs and Customized Solutions OEMs & Consignment to harness resources across Component Suppliers global value chain partners Distributors & Resellers Support / Retention Outsourced Globalization manufacturing & Multiple Sales & fragmented inventory Distributed Support Product Channels Design Political Integration/ Natural Wildcards Disintegration Resource Low Probability/ Availability High Impact
  15. 15. Strategic Alignment Links Organizational Goals and Activities Purpose Purpose and Strategies Drive Operational, Management and People System Activities Business Strategy Operational Management Systems Systems Business Processes Performance Plans Quality Mgmt. Performance Mgmt. Every Action Taken Is Linked to Other “People” Systems Related Senior Goals and Actions Results/Feedback
  16. 16. Migrating to SOA is an Opportunity New Usage and New Solution Architectures Flourish Federation SERVICE SOI Composite Apps ORIENTATION SOA Apps as Services Data as Services Strategic Inflection Point (2005-2008) Legacy Continues Globalization, Mobility and Outsourcing Require Adaptive, Agile Computing & Communications Architectures
  17. 17. Value Streams* modeled in VRM will help define Services • Prospect to Customer • Relationship to • Order to Cash Partnership • Manufacturing to • Requisition to Payables Distribution • Resource Availability to • Request to Service Consumption • Insight to Strategy • Acquisition to Obsolescence • Awareness to Prevention • Financial Close to • Concept to Development Reporting • Initiative to Results • Recruitment to • Forecast to Plan Retirement * Taken from Enterprise Business Architecture by Whittle and Myrick, CRC Press, 2005
  18. 18. Lessons Learned using VRM • The common taxonomy minimizes risk of confusion amongst participants, especially as globalization of business continues and outsourcing practices grow • Used as the common definition library for depicting life cycle process activities to accomplish simultaneous product and process design • Used to consistently develop and protect intellectual property across a diverse and geographically dispersed supply base • Used to evaluate competing suppliers using standard metrics • Used to identify representative practices and metrics
  19. 19. Identifying Value Opportunities using Value Streams modeled in VRM • This approach establish the criteria for what should or should not be considered a Service – By leveraging the Enterprise Business Architecture to define the enterprise value streams, their relationships to all external entities and other enterprise value streams, and the events that trigger instantiation. • Value is determined both subjectively (non-quantifiable) and objectively (quantifiable) • Define value in context of decisions based on costs/benefits i.e. time, price, quality, innovation; show decision matrix • Convert subjective knowledge of value into objective knowledge via data and metrics • Value chain operations are inherent in the Extended Enterprise • Understand the relationship between value and process
  20. 20. Frameworks to Enable Business Agility Business Frameworks Process Reference Model Framework for Stage-gated Processes VC Information Model Framework to Couple BPM and SOA Business Architecture Federated Enterprise Reference Architecture Value Streams SOA Information Model Framework to Establish Value Opportunities
  21. 21. Thank you Herbert Heinzel
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