Market Coherent Enterprise

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Market Coherent Enterprise

  1. 1. MARKET   COHERENT     ENTERPRISE   Guest Speaking @ Carnegie Mellon University Enterprise Architecture Certification Program Denmark, May 28th 2010
  2. 2. Who  Am  I   •   Hjalte  Hojsgaard   •   M.Sc.  Business  AdministraCon  &  InformaCon  Systems          Copenhagen  Business  School  –  I’m  finalizing    a  thesis  on  today’s  topic   •   MBA,  Monterey  InsCtute  of  InternaConal  Studies,  CA,  USA   •   Engagement  Manager,  MarketCulture  Strategies  Inc.   •   Blog:  marketcoherency.blogspot.com   •   LinkedIn:  http://www.linkedin.com/in/hjalte •   TwiRer:  hRp://twiRer.com/hhojsga 2  
  3. 3. Agenda   •  Back  to  Basics:  The  Lemonade  Stand   •  Thinking  Outside-­‐In   •  The  Central  Customer  –  Market  OrientaCon   •  Why  is  this  important?  Performance  linkages   •  OperaConal  and  Cultural  Challenges   •  Expanding  EA  to  accommodate  MO   •  A  model:  Market  Coherent  Enterprise  /   Market-­‐Driven  Enterprise  Architecture   3  
  4. 4. Terminology   MO Market Orientation EA Enterprise Architecture MDEA Market-Driven Enterprise Architecture 4  
  5. 5. The  Case  -­‐  Back  to  Basics   For the full lemonade stand example see: http://marketcoherency.blogspot.com/2010/05/lemonade-stand-example.html 5  
  6. 6. How can we sustain the simple value chain and feedback loop of the lemonade stand when our business environment and operations become more complex….. MO and EA address two important aspects of the value equation: maintaining customer focus and internal coordination, efficiency and effectiveness. 6  
  7. 7. What  is  the  Purpose?   “ A company can outperform rivals only if it can establish a difference it can preserve. It must deliver greater value to customers or create comparable value at a lower cost , or do both (emphasis added). The arithmetic of superior profitability then follows: creating greater value allows a company to charge higher average unit prices; greater efficiency results in lower average unit costs – Michael Porter 1996 – What is Strategy? The quote illustrates a fundamental need and a place for MO and EA. MO and EA supports the equation from two ends, making clear the case for their separate existence but also their reconciliation. 7  
  8. 8. The  Need  to  Think  “Outside  In”   8  
  9. 9. Market  OrientaCon   “ … a market orientation refers to the organization-wide generation, dissemination, and responsiveness to market intelligence” - Jaworski & Kohli 1990 “ A market orientation is a business culture in which all employees are committed to the continuous creation of superior value for customers.” – Narver & Slater 1998 9  
  10. 10. Customer-­‐Centricity   10  
  11. 11. Why  is  MO  Important   •  Market  OrientaCon  has  been  proven  to   strongly  correlate  with  a  variety  of   performance  metrics,  i.e.:    Profitability,  Profit  Growth,  Sales  Revenue  Growth,   Customer  Sa9sfac9on,  New  Product  Success,   Innova9on,  Overall  Performance   11  
  12. 12. Why  is  MO  Important   CorrelaCon  comparisons   Source:  MarketCulture  Strategies  ©  2010   12  
  13. 13. Why  is  EA  Important   •  IT  Savvy  Firms  have  20  percent  higher  margins   than  their  compeCtors  –  Genera9ng  Premium  Returns  on  Your  IT   investments,  Sloan  Management  Review  47,  no.  2  (2006):  39,  IT  Savvy  p.  18   •  IT  Savvy  ch.  2  p.  40  :   –  17  percent  of  IT  Savvy  firms  have  greater  (strategic)   alignment…  A  metric  posiCvely  correlated  with   business  performance.  They  also  report:   •  31  %  higher  operaConal  efficiency   •  33%  higher  customer  inCmacy   •  34%  higher  product  leadership   •  29%  higher  strategic  agility   13  
  14. 14. The  Need  to  Architect:   OperaConal  Challenges   •  Tangled  IT  systems  translates  into  tangled  business   processes  -­‐  the  processes  that  we  use  to  deliver   goods  and  services  to  customers  and  to  create  a   good  customer  experience  -­‐  or  vice  versa     •  Employees  have  to  work  around  disjoined  systems   •  IT  becomes  a  liability  instead  of  an  asset   14  
  15. 15. The  Need  to  Architect:   Cultural  Challenges   •  Do  what  I  say  don’t  do  what  I  do…  Espoused   values….  We  have  a  wriRen  value  set  but   they’re  not  the  values  we  live  by   •  Internal  Conflict  and  CompeCCon   •  Subcultures  creaCng  misalignment   •  Customer  value  is  not  the  end  to  the  acCviCes   performed,  internal  as  well  as  external   15  
  16. 16. Do  We  Automate  It  All?   •  IT  Savvy:  Without  such  a    (digiCzed)  plamorm,  every   customer-­‐oriented  business  process  is  dependent  on   insCncts,  judgment  and  aRenCon  of  the  person   compleCng  it….     Yes,  but:   –  Can  we  ever  escape  this?  What  is  our  view  on  the   employee:  Is  the  employee  so  helpless  that  we  do  not   trust  him  with  any  decision  power,  and  we  automate   everything  to  eliminate  the  risk  of  human  involvement?   –  There  will  always  be  employee  involvement.  Besides,   who’s  designing  and  deciding  the  processes  we  automate?     16  
  17. 17. The  “Expanded”  EA  view   •  The  current  EA  taxonomy  and  framework  can   be  expanded  to  explicitly  encompass  social   systems  –  people  dimensions  alongside   techno  dimensions   –  Similar  to  informaCon  systems  we  need  to  manage   and  opCmize  the  ins9ncts,  judgment  and  aTen9on   that  goes  into  decision  making.  We  can  mold  a   culture.  We  can  architect  desired  behaviors.   17  
  18. 18. A  Model:  Market-­‐Driven  EA   18  
  19. 19. Market-­‐Driven  EA  conCnued…   19  
  20. 20. InvitaCon  to  parCcipate   •  I’m  seeking  professionals  who  are  willing  to   contribute  with  field  experience  in  this  area.   Any  feedback  /    insights  are  welcomed.   –  Connect  with  me  on  LinkedIn:   hRp://www.linkedin.com/in/hjalte   20  

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