Architecting to Create or Mitigate a Disruption
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To be sustainable and to leverage new discoveries, inventions or solution, enterprises either inject a disruption into their market or respond as rapidly as they can. This is a reflection of our model to help the CxOs and Enterprise Architects to create or mitigate impact from disruptive movements
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Architecting to Create or Mitigate a Disruption
- 1. Architecting to Cause or Mitigate Disruption Chasing the Right Architecture Sriram Sabesan 1/31/2017 1
- 2. Your Presenter: Sriram Sabesan • Sriram Sabesan • Partner, Conexiam • sriram.sabesan@conexiam.com • 20+ years in Consulting • Active in improving architecture profession • IEEE • Digital Transformation • IASA • Active in Open Group • Board of The Open Group • Open CA Certification Board • Architecture and Open Platform 3.0TM Forum • Co-Author • World Class EA: A Leader’s Approach to Establishing and Evolving an EA Capability • Digital Transformation: Strategy to Implementation using Open Group Standards • World Class EA: A Practitioner’s Approach to Developing Enterprise Architecture Following the TOGAF® ADM 1/31/2017 2
- 3. Conexiam • A management consulting company that • Employs enterprise architecture as a tool of trade • Operates in North America, Europe & the Middle East • Uses a sprint based engagement model • Provides strategic architecture to implementation guidance and governance services • Uses open standards & public best practices • IT4IT, TOGAF, SABSA, APQC, BMC, BMD, Strategy Map • Extend & integrate open practices with in-house method • Navigate & Pilot • We work to evolve these standards Key work is demonstrating how they are used • Leader’s Approach to Establishing & Evolving an EA Capability • Practical Guide to SOA & TOGAF • Integrating Risk and Security within an Enterprise Architecture • Digital Transformation: Strategy to Implementation using Open Group Standards • 2 more documents under publication review 1/31/2017 3
- 4. “…disrupters start by appealing to low-end or unserved consumers and then migrate to the mainstream market…” - Clayton M. Christensen (HBR Oct 2015) 1/31/2017 4
- 5. A Contrarian View There are no Disruptions… only failures to see patterns or connect the dots… or act on time… 1/31/2017 5
- 7. Initiators T-Mobile Failure: Smartphone release cycle and Contract cycle; Core of Business – wireless product, not devices Result: Contract less plans; ease of device upgrade BBVA Frustration: Credit Reports Friction: Third Party Integration Result: History with the company or utility bills 1/31/2017 7
- 8. Preventers T-Mobile Lesson from Adjacent Industry: History with T-Mobile to get high end devices under installment plan Lease of equipment Result: Improved profits and growth in EBIDTA Compliance Management Company Our Finding: Increase Productivity AND Reduce Friction (improve self-service) Result: Work in Progress 1/31/2017 8
- 9. The Age of Customer Impact 1/31/2017 9
- 10. Liquid Expectations • Expectation from one industry seeps to another • Simplicity of Uber for road transport & lack of it for quick serve restaurant or self-serve grocery • Return experience in Zappos vs Airline cancellation 1/31/2017 10
- 11. A Page From Our Cookbook 1/31/2017 11
- 12. First Steps • Moderated Executive Discussion • Expert Assessment • Quantitative Insights • Organization Readiness Assessments 1/31/2017 12
- 13. What Do We Focus On? Score for ability & appetite to change and retain Value Focus • Strategy • Brand Identity • Customer Experience Operations • Process • Technologies • Suppliers • Channels People • Current Assets • Current Skills Flexibility • Freedom to Invest • Time to Release • Rate of Change in Process and Rules 13 * See Notes
- 14. Glimpse into Assessment Model • Appetite to get benefits out of current assets informs us strategy to employ – the company is interested in migration over rip-and-replace. Coexistence is a challenge to address. Scale of 1 to 5. 1 being okay to change all assets and 5 being want to reap maximum benefits. When the value is 1, we can go to cloud easily by running a parallel team on next generation technologies. • Lesser the freedom to invest in transformation, the ability to influence rate of change comes down or informs the need to look for managed services. Scale of 1 to 5, 1 being limited freedom and 5 being total freedom. • Above two forms a trade-off condition for ability to grow and change with time. A value of 5 in freedom to invest and 1 in current asset utilization is ideal to accelerate digital transformation. Opposite end of values is a path to irrelevancy. A value of 3 to both is a clear indication of risk aversion, need for highly selective migration to SMAC & IoT solutions. 1/31/2017 14
- 15. 2x4 Action Framework 1/31/2017 15 Commoditize DifferentiateProductized Co-Create Delegate / Buy Direct Engagement Visualization inspired by Simon Wardley’s work We had 5 categories. Differentiate or Market Leader – build in-house. Co-create or customize with help of third party provider. Managed – delegate part of operations to third party; leverage out of the box as much as possible, bolt-on features developed and managed by third party specialist. Productized – use only out of the box features or build for scale. Commoditize – if you have to productize, make sure someone else can make profit feeding and caring it. After careful review of work by Simon Wardley, we didn’t value you pursuing “Managed”… we settled on four stages.
- 16. Effect of Shift Left 1/31/2017 16 Commoditize DifferentiateProductized Co-Create Delegate / Buy Direct Engagement Most companies are motivated to shift left. Though it appears to be good in the long run, organizations forget about the impact they leave with partners, suppliers, employees and customers. Add the need to respond to market rapidly, invariably rigidity gets built in. Creates frustrations, frictions and eventually failures.
- 17. Worked out Example 1/31/2017 17 Commoditize DifferentiateProductized Co-Create Delegate / Buy Something User / Customer Values or White Space Sustainability (Tom’s Footwear) Ecosystem Impact (India Banking / iPhone) Retain Market / Customer Base Operational Efficiency / Automation / Scale (AWS or Utilities) Aggregate / Last-Mile Connection (Expedia / Uber) Operational Management (ERP / CRM / Productivity / Communications) Guidance (CISR / McKinsey Labs / Conexiam) Content / Research Audit / Certification (E&Y / KPMG) Direct Engagement
- 18. Open Standards Our take and how we have assembled them 1/31/2017 18
- 19. 1/31/2017 19 Architecture to Support Strategy Strategic, Phase A Strategic, Partial Phase B Strategic, Partial Phase C Strategic, Partial Phase D Architecture to Support Portfolio Segment, Phase A Segment, Partial Phase B Segment, Partial Phase C Segment, Partial Phase D Strategy to Portfolio (IT4IT) Budget Planning Budget Preparation Budget Allocation Budget Control Partial Phase E, F, G Architecture to Support Project Capability, Partial Phase B Capability, Partial Phase C Capability, Partial Phase D Requirement to Deploy (IT4IT) Capability, Partial Phase E Partial Phase F, G, H Request to Fulfill (IT4IT) Detect to Correct Architecture to Support Solution Delivery Capability, Partial Phase B Capability, Partial Phase C Capability, Partial Phase D Capability, Partial Phase E Partial Phase F, G, H SOA RA Microservices Architecture Open Platform 3.0 Open Business Data Lake Customer Experience (DBCX) Cloud Computing Infrastructure SOCCI Governance, Security Inform Strategy Improve Product Or Service Excellence Strategy&GovernanceSolutionDelivery ImplementationApproach Infrastructure Segment, Partial Phase E Strategic, Partial Phase F Margin & Revenue Opportunities TOGAF
- 20. Preventive Disruption – converted employees into brand ambassador – shares profits with employees and customers S – Modernization and Futuristic 1/31/2017 20
- 22. Disruption is imminent… • When you spend too much time talking about “non-core” areas of the business • When you experience is plateau in your growth • When your Investment to Revenue ratio is going south 1/31/2017 22
- 23. The Choice is Yours Create React 1/31/2017 23 OR
- 24. Q & A Send your feedback to: sriram.sabesan@conexiam.com Visit us at: www.conexiam.com 1/31/2017 24
- 26. Reference List • Disruptive Innovation: Mark, Christensen, Clayton, et al., 2008, "Reinventing Your Business Model, Harvard Business Review, December 2008. • https://inc42.com/resources/what-disruption-means-why-you-are-using-it-wrong/ • https://www.interaction-design.org/literature/book/the-encyclopedia-of-human- computer-interaction-2nd-ed/disruptive-innovation • http://sloanreview.mit.edu/article/how-useful-is-the-theory-of-disruptive- innovation/ • http://www.opengroup.org/public/member/proceedings/Austin-2016- 07/Presentations/street.pdf • http://www.opengroup.org/public/member/proceedings/Austin-2016- 07/Presentations/sabesan.pdf • http://www.opengroup.org/public/member/proceedings/Austin-2016- 07/Presentations/hornford.pdf • http://www.strategy-business.com/article/00324?gko=1c407 1/31/2017 26
- 27. Disruption Impact Tree 1/31/2017 27 Enterprise Disrupt Create New Ecosystem / Business Model Market / Revenue Model Remediate / React Be Disrupted Perish Improved Services / Features New Products / Services Adjacent / Complementary Services Essential Services Stack Support Efficiency Gains Efficiency / Agility Gains Perish Re-Focus Understand Your Core
Editor's Notes
- This is part 2 of our series of presentations to open up our method. Each presentation is designed to be stand alone. Dave, Ken and I shared IT4IT, Governance and Digital Transformation at Austin, in July 2016. This is the continuation of Digital Transformation journey. Our white paper via the Open Group is being printed as we speak.
- Low-end footholds exist because incumbents typically try to provide their most profitable and demanding customers with ever-improving products and services, and they pay less attention to less-demanding customers. new-market footholds, disrupters create a market where none existed. Put simply, they find a way to turn nonconsumers into consumers. “to break apart” or “to interrupt the normal course or unity” The unrecognized… disruption to normal operations, due to break in supply chain. The events that follows Tsunami in Japan or floods in Thailand. and Samsung battery failure – single supplier issue
- Technological growth is always going to happen. Any technology has an incubation and maturity period.
- Passion to leave the world a better place than before; make a difference to the lives of people 3Ps are the virtues any enterprise strives to achieve. In their path to gain these, it is normal for them to get blind sided to the impact they create to customers and some of their employees and partners The tension between the 3Ps and 3Fs results in creation of unserved and low end customers. It is a valid strategy not be everything for every customer. However, it is bad to alienate your own target customers.
- Appetite to get benefits out of current assets informs us strategy to employ – the company is interested in migration over rip-and-replace. Coexistence is a challenge to address. Scale of 1 to 5. 1 being okay to change all assets and 5 being want to reap maximum benefits. When the value is 1, we can go to cloud easily by running a parallel team on next generation technologies. Lesser the freedom to invest in transformation, the ability to influence rate of change comes down or informs the need to look for managed services. Scale of 1 to 5, 1 being limited freedom and 5 being total freedom. Above two forms a trade-off condition for ability to grow and change with time. A value of 5 in freedom to invest and 1 in current asset utilization is ideal to accelerate digital transformation. Opposite end of values is a path to irrelevancy. A value of 3 to both is a clear indication of risk aversion, highly selective migration to SMAC & IoT solutions. Difficulty to change process. Scale of 1 to 5. 1 = very easy to change and 5 = very difficult to change. A score of 5 is good for some, bad for some. Good = Revenue and tax reporting. Bad = Product release or website change. Target state of 1 informs the need to employ Microservices. Difficulty to change Supplier & Channel. Scale of 1 to 5. 1 = easy to employ multiple channels, 5 = mostly single channel, difficult to change or add channels. Informs the impact of suppliers and partners in the value chain. Higher the difficulty, higher to cost of change. Also informs the number of layers of security and trust to establish. Difficulty to manage change or release. Scale of 1 to 5. 1 = easy to manage change. 5 = very difficult to manage change. Directly informs separation of duties across systems, suppliers and partners. A value of 5 is good for scenarios like inventory acceptance and quality control and bad in scenarios like customer engagement. Control over Brand Identity: Scale of 1 to 5, 1 = no impact to brand identity and 5 = high impact to brand identity. Informs how to measure and engage partners – and focus on right assets. 1 is acceptable value for expense approval process. 5 is the required value for call center services (more so, when provided by a partner or managed service provider). Anything in 1 is a potential candidate to send to a managed service provider. These assessments are applied at a process level, then to applications (technology and information). The assessment is taken for ‘as-is’ state and desired state, in comparison to peers by process or capability. The gap between the states is supported by data from service-design template, to fine-tune the focus on pain points and frictions in the organization. We have a portfolio that balances investment profile of the company and its values. Delivery and project control is clearly defined. Project Managers will do the right trade-off when delivery timeline is challenged – protect future value, not delivery scope.
- We had 5 categories. Differentiate or Market Leader – build in-house. Co-create or customize with help of third party provider. Managed – delegate part of operations to third party; leverage out of the box as much as possible, bolt-on features developed and managed by third party specialist. Productized – use only out of the box features or build for scale. Commoditize – if you have to productize, make sure someone else can make profit feeding and caring it. After careful review of work by Simon Wardley, we didn’t value you pursuing “Managed”… we settled on four stages.
- Most companies are motivated to shift left. Though it appears to be good in the long run, organizations forget about the impact they leave with partners, suppliers, employees and customers. Add the need to respond to market rapidly, invariably rigidity gets built in. Creates frustrations, frictions and eventually failures.
- Now, support the whole thing with TOGAF!
- You will ignore facts You may not see what happens in adjacent industry will impact you
- As I mentioned at the beginning, its all about what technologies and customer trends should you keep track of If you are still unsure… keep us on your speed dial