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Business by Design

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There are many activities and methods addressing business (project and strategic) planning and execution, however the planning cycle still remains flawed and sub-optimal.
-46% of business failures stem from misguided strategies
-More than half of all business projects are still failing
- One third of firms fail to achieve expected results from annual strategic plans

Leading organisations are getting in front of the planning cycle to positively influence project delivery and positive business outcomes with modern approaches geared to rapidly changing and complex environments.

Many disciplines purport to be the silver bullet to deal with these issues. The reality is that most businesses are just too chaotic to handle overly robust and formal techniques – but still want to ensure the right strategies and outcomes are achieved - and by design - not chance. History may look back at the evolving discipline of modern Business Architecture as one of the keys.  For that to come true though, Business Architecture, as any methodology and framework, needs to be applied in a pragmatic and lean manner to be an effective tool for today's businesses.

This presentation, given by EA's Chief Architect, looks at Business Architecture and its journey – and necessity – to support a more agile approach to enterprise design.

- Business Analysis, Business Architecture and Business
- Design and where they intersect;
- What is the value of each?
- Where does the problem lie?
-  What is currently working and what is failing;
- Where can we position the discipline to be the most effective in the organization, and have the greatest amount of impact on the strategic outcomes?
- What are the first steps to escalate the visibility and mandate of the discipline?
- What training is available and where does it get me?

Published in: Business
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Business by Design

  1. 1. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 1 BUSINESS BY DESIGN DRAFT – V0.1.0 – NOVEMBER 2014 – FOR PUBLIC Craig Martin Chief Architect, Enterprise Architects
  2. 2. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 2 ABOUT zero HOURS A DAY BACK OFFICE VENDOR ALIGNMENT MORE THAN 1600 PEOPLE TRAINED IN ARCHITECTURE PRACTICES (AND RISING) 12YEARS IN BUSINESS 8GLOBAL OFFICES 1600 MORE THAN 10,000 DAYS OF ARCHITECTURE SERVICES DELIVERED LAST YEAR 10,000 oneCOMMON METHOD 20 four sixOPERATING IN 6 CONTINENTS
  3. 3. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 3 OUR SERVICES Servicing the Strategy and Architecture needs of Global Organisations STRATEGY CONSULTING › Business Architecture › Strategic Services & Operating Model Design: » Business Services & Capabilities » IT Services & Capabilities › Segment Strategies and Roadmaps: » Customer Experience & Digital » Enterprise Information Management » Big Data Analytics » Applications » Cloud & Infrastructure » Security, Risk & Resilience » Innovation Management PRACTICE DEVELOPMENT › Architecture Service Model Design › Architecture Operating Model Design › Service and Capability Readiness Assessment › Professional Training and Certification (Business Architecture, Information Management, TOGAF®, CDMP®, ArchiMate® and Design Thinking) › Project Architecture Resources › Architecture Talent Strategy and Professional Development › Architecture Back Office Services
  4. 4. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 4 AN IMPERFECT PLANNING MOVEMENT THROUGH THE KNOWLEDGE FUNNEL There are still a number of failures across the vision realisation space Strong disciplines are required to address some of these failures One-third of firms fail to achieve expected results from annual strategic plans. More than half of all business projects fail. Forty-six percent of business failures stem from misguided strategies. *Corporate Executive Board
  5. 5. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 5 THE VALUE / MANDATE CONUNDRUM *Infotech executive research Catch 22: The CEO is looking for more value, but the CIO has a mandate of diminishing value that’s often focussed on keeping the lights on
  6. 6. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 6 THIS ACCELERATIO N IS PUTTING PRESSURE ON CURRENT BUSINESS MODELS Technology commoditising from below Business roles taking on more architecture accountabilities
  7. 7. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 7 Utility (Foundation) Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages WHAT'S BUSINESS ABOUT? T H E B U I L D I N G B L O C K A N A L O G Y DIFFERENTIATION
  8. 8. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 8 COHERENCY REQUIRES A BALANCE OF GOALS AND THINKING TYPES The challenge is identifying the right skills in the organisation that are able to traverse the domains of innovative intuitive thinking, and reliable analytical thinking. Unresolved Business Challenges Robust, Repeatable And Replicable Processes NPV EVA Operation Management Quality Management Corporate Governance Enterprise Patterns Portfolio Analysis IT Governance Value Engineering PRINCE2 Six Sigma & Loan Business Intelligence Strategic Traceability Financial Modelling Innovation Management Business Analysis Data visualisation Talent Management System Thinking Mission Business Model Design Stakeholder Value TOGAF Cost Engineering Solution Architecture Knowledge Ecosystem Six Thinking Hats Collective Intelligence Gamification Crowdsourcing Change Management Perception Management Wicked Problems Environmental Scanning Brand Management Integrative ThinkingGoals Capability Five Forces Root Cause Analysis Product Management HEURISTICS RULES OF THUMB ANALYTICAL THINKING INTUITIVE THINKING * From Roger Martin (2009) The Design of Business GOAL: Exploitation; Reliability Produce consistent, predictable outcomes GOAL: Exploration; Validity Produce outcomes that meet an objective A reliable system will produce the same test results every time W H O I S B E S T Q U A L I F I E D T O O P E R A T E H E R E ? A valid system will produce a result that is shown, through the passage of time, to be correct
  9. 9. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 9 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 & processesUltimately all innovative algorithms will become utility. * From Roger Martin (2009) The Design of Business MYSTERY HEURISTIC ALGORITHM T h e K n o w l e d g e F u n n e l This is the lean startup space This is the exploitation and industrialization space
  10. 10. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 10 THE KNOWLEDGE FUNNEL Non-core but complex - Outsource Innovation, chaos & unresolved mysteries 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 & VALUE COMPLEXITYANDDYNAMICS Complex negotiation, design, or decision process Many business rules; expertise involved Some business rules Procedure or simple algorithm Non -Core Competencies Core Differentiating Competencies Everyday, highly repeatable and automated Make repeatable and reliable to gain efficiency Core Competitive Competencies 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. Source: Adapted from “Business Process Change” by Paul Harmon GOAL: Reliably produce consistent, predictable outcomes GOAL: Validity- Produce outcomes that meet desired objectives
  11. 11. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 11 THE RESULTS OF DISRUPTION T H E C O M M O D I T Y S PA C E I S G R O W I N G , M A K I N G T H E D I F F E R E N T I AT I O N S PA C E M O R E C O M P E T I T I V E Non-core but complex - Outsource Innovation, chaos & unresolved mysteries 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 & VALUE COMPLEXITYANDDYNAMICS Complex negotiation, design, or decision process Many business rules; expertise involved Some business rules Procedure or simple algorithm Non -Core Competencies Core Differentiating Competencies Everyday, highly repeatable and automated Make repeatable and reliable to gain efficiency Core Competitive Competencies Non-core but complex - Outsource Innovation, chaos & unresolved mysteries 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 & VALUE COMPLEXITYANDDYNAMICS Complex negotiation, design, or decision process Many business rules; expertise involved Some business rules Procedure or simple algorithm Non -Core Competencies Core Differentiating Competencies Everyday, highly repeatable and automated Make repeatable and reliable to gain efficiency Core Competitive Competencies OPPORTUNITY OR THREAT?
  12. 12. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 12 K WHO?
  13. 13. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 13 DISCIPLINE CONFUSION C O N F U S I O N R E I G N S A R O U N D W H I C H D I S C I P L I N E S A R E U S E D F O R W H AT S I T U AT I O N S STRATEGIC PLAN MARKETING PLAN OPERATIONAL PLAN DELIVERY & EXECUTION OPERATIONS Planning Delivering Operating PORTFOLIO, PROGRAM AND PROJECT MANAGEMENT BUSINESS ARCHITECTURE ENTERPRISE ARCHITECTUREPRODUCT & SERVICE DESIGN BUSINESS PLANNING SOLUTIONS ARCHITECTURE SOLUTIONS DEVELOPMENT ENTERPRISE DESIGN BUSINESS ANALYSIS Environment analysis / SWOT, competitor / Business motivation / Product and portfolio analysis / Strategic Options Market analysis and forecasting Model the business / Evaluate and select strategy / Risk and funding analysis Project, portfolio and program management, solutions delivery Daily operations, run the business
  14. 14. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 14
  15. 15. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 15 WHAT WE HAVE FOUND IN LARGE ACCOUNTS An ownership gap for business architecture exists - Lines of responsibility around coherency and business architecture, are often unclear Cohesion Mandate Undefined - Enterprise Planning Ownership EnterprisePerformance Capabilities X-FunctionalCapabilities FunctionalCapabilities CONTEXT Markets Industries Customers Market Segment Channels Customer Relationships Value Proposition Offering: Services/Products Processes/ Value Chains Capabilities Business Service Functions Data Applications Technology MARKET MODEL OPERATING MODEL SERVICE MODEL Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined
  16. 16. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 16 K WHAT
  17. 17. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 17 Improve project performance Improve enterprise wide investment performance Improve Business Performance Improve Market Performance A B VALUE MANDATE C E Improve Product and & Service Performance D IMPROVING ARCHITECTURE VALUE By EA is often stuck with an old mandate with diminishing utility value *Adapted from Ruth Malan, Dana Bredemeyer EA = IT Architecture EA = Enterprise-Wide IT Architecture (EWITA) Improve IT performance EA = Business Architecture (BA) + EWITA Improve Business Performance EA = Strategic Enabler + BA + EWITA (Shareholder Value) EA = Product Architecture + BA + EWITA Improve Product/Service Performance Reduce Operating Costs Positioned For Growth & Change Focus on Strategic Imperatives Enhanced Adaptable Frontier Influential Utility Predictable
  18. 18. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 18 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Mandate: Improve enterprise wide program and portfolio performance STRATEGIC THEMES Initiative 5 Initiative 6 STRATEGIC THEMES Initiative 1 Initiative 2 STRATEGIC THEMES Initiative 3 Initiative 4 Business Unit 1 Program 1 Program 2 Business Unit 1 Program 1 Program 2 Business Unit 1 Program 1 Program 2 Initiatives straight from strategy often results in loss of cohesion. SCENARIO 1: BUSINESS IMPROVEMENT - SPAWNING INITIATIVES FROM THE STRATEGY MAP.
  19. 19. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 19 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES PMO drives the architecture efforts S T R AT E G I C P L A N N I N G B U S I N E S S P L A N N I N G P O R T F O L I O A N D P R O J E C T M A N A G E M E N T B U S I N E S S A R C H I T E C T U R E S O L U T I O N A R C H I T E C T U R E S O L U T I O N D E V E L O P M E N T B U S I N E S S A N A LY S I S SCENARIO 1: BUSINESS IMPROVEMENT - SPAWNING INITIATIVES FROM THE STRATEGY MAP.
  20. 20. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 20 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Creating a single unified business model helps build cohesion across the enterprise. Mandate: Improve Business Performance SCENARIO 2: BUSINESS TRANSITION - DEVELOPING THE UNIFIED BUSINESS MODEL STRATEGIC THEMES Initiative 5 Initiative 6 STRATEGIC THEMES Initiative 1 Initiative 2 STRATEGIC THEMES Initiative 3 Initiative 4 Business Unit 1 Program 1 Program 2 Business Unit 1 Program 1 Program 2 Business Unit 1 Program 1 Program 2
  21. 21. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 21 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES As business architecture provides more value, its is being positioned above the delivery and execution space. B U S I N E S S A R C H I T E C T U R E S T R AT E G I C P L A N N I N G B U S I N E S S P L A N N I N G P O R T F O L I O A N D P R O J E C T M A N A G E M E N T S O L U T I O N A R C H I T E C T U R E S O L U T I O N D E V E L O P M E N T B U S I N E S S A N A LY S I S
  22. 22. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 22 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Injecting Business Architecture into the strategic scenarios will Improve the Strategic Decisions as well as the execution of that strategy. Mandate: Improve market performance Mission Vision VISIONARY StrategiesGoalsSTRATEGIC Tactics Objectives TACTICAL Semi Integrated Universal Bank Product Specialist Customer Owner Infrastructur e Provider SCENARIO 3: PLANNING AND PERFORMANCE - DEFINING THE BUSINESS MODEL FOR CANDIDATE STRATEGIC SCENARIOS .
  23. 23. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 23 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Facilitating Business Architecture as a strategic tool in the planning process is where the greatest value lies. B U S I N E S S A R C H I T E C T U R E S T R AT E G I C P L A N N I N G B U S I N E S S P L A N N I N G P O R T F O L I O A N D P R O J E C T M A N A G E M E N T S O L U T I O N A R C H I T E C T U R E S O L U T I O N D E V E L O P M E N T B U S I N E S S A N A LY S I S
  24. 24. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 24 E N T E R P R I S E D E S I G N STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Combining business architecture with design thinking provides a much broader value proposition where customer experience and value is linked directly to the architected components of the business. In other words; the entire enterprise is architected to improve the experience the end customer has with the organization. Outside in, as opposed to inside out. B U S I N E S S A R C H I T E C T U R E S E R V I C E D E S I G N B U S I N E S S P L A N N I N G P O R T F O L I O A N D P R O J E C T M A N A G E M E N T S O L U T I O N A R C H I T E C T U R E S O L U T I O N D E V E L O P M E N T B U S I N E S S A N A L Y S I S S T R A T E G I C P L A N N I N G
  25. 25. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 25 Enterprise Planning and Performance space Business Improvement space Business Transition space Improve project performance Improve enterprise wide investment performance Improve Business Performance Improve Market Performance A B VALUE MANDATE C E Improve Product and & Service Performance D WHAT ARE THE DOMINANT SKILLS ACROSS THE MANDATE? The required skills will therefore vary across the mandate. Elicitation Business Analysis Performance Recommendation of Improvements Enterprise analysis Determine business processes Requirements analysis mngmnt and comms ADDRESSED BY SFIA ADDRESSED BY SFIA Lean thinking Six Sigma TQM TOC Planning and monitoring Solution assessment and validation Program and Portfolio mngmnt and Governance Risk mngmnt Change Mngmnt Benefit Realisation GAP IN SFIA Shareholder Value Analysis Value Maps and Driver trees Strategic Planning Organisation Design Economics and Accounting Systems Thinking Corporate Governance Quantitative Analysis Product Strategy Design Thinking Enterprise Planning
  26. 26. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 26 K HOW
  27. 27. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 27 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Organizational Rhythms: Closer alignment to the planning cycle.
  28. 28. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 28 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Creation of a Unified Team of cross enterprise disciplines. Change Manager Finance PMO Business Improvement Strategy Technology A combination of People, Process & technology to drive out an outcome through projects
  29. 29. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 29 STRATEGIES FOR MOVING UP THE CURVE TO OPEN THE OPPORTUNITIES Aligning to value. WHAT VALUE IS CREATED? HOW IS VALUE CREATED? HOW IS VALUE MEASURED? Senior managers must have a solid analytical understanding of which performance variables drive the value of the company. An important part of VBM is a deep understanding of the performance variables that will actually create the value of the business – the key value drivers. Such an understanding is essential because an organization cannot act directly on value. It has to act on things it can influence – customer satisfaction, cost, capital expenditures, and so on. The problem lies here
  30. 30. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 30 Business Unit Business Unit Business Unit Business Unit Business Unit Process Performance Indicators STRATEGIES FOR MOVING UP THE CURVE A L I G N I N G V A L U E T O P E R F O R M A N C E Product Development Retail SalesRetail PlanningSourcing Objectives Drive Key Performance Indicators (SMART) Financial Operational Data Quality Indicators Business Flows Flow of goods, flow of money, flow of information Value Chains / Cross Functional Capability / Value Streams Critical Success Factors Strategic Business Goals Value Monitoring ValueReportingPerformanceReporting Performance Monitoring *Adapted from “Real world BPM in an SAP Environment”
  31. 31. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 31 STRATEGIES FOR MOVING UP THE CURVE A L I G N I N G VA LU E TO P E R F O R M A N C E
  32. 32. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 32 “ARCHITECTURE THINKING”
  33. 33. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 33 MASHUPS FOR BUSINESS
  34. 34. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 34 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 FOUR LEVELS OF MIXING: AT THE RESOURCE LEVEL The Process Layer Plays a Strong Role in assembling capabilities for different outcomes CAPABILITY People Process Tools Connecting these to projects provides valuable insight into coherency o the capex investment across the enterprise Within each process flow, there are typically four to five capabilities that make up the process. These typically correspond to functional silos that complete each step. Within each capability, the model identifies systems or applications that are used to execute the capability. This is where the model forms the alignment between business and IT. Archimate Notation
  35. 35. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 35 FOUR LEVELS OF MIXING: AT THE RESOURCE LEVEL A capability has many resources that require architecting
  36. 36. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 36 THE ENVIRONMENT BUSINESS MODEL Markets Industries Customers Market Segment Channels Customer Relationships Value Proposition Offering: Services/Products Processes/ Value Chains Competencies Business Service Functions Data Applications Technology FOUR LEVELS OF MIXING AT THE CAPABILITY LEVEL 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
  37. 37. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 37 FOUR LEVELS OF MIXING: AT THE BUSINESS MODEL LEVEL
  38. 38. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 38 Leading and Best Practice Research, 2011/2012 Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries FOUR LEVELS OF MIXING: AT THE BUSINESS MODEL LEVEL
  39. 39. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 39 FOUR LEVELS OF MIXING: AT THE BUSINESS MODEL LEVEL
  40. 40. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 40 FOUR LEVELS OF MIXING: AT THE BUSINESS MODEL LEVEL Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages 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 Structure vs Behaviour - Utility Business Model Stereotypes provide a set of standard business model execution styles to work with 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
  41. 41. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 41 ‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD PERORMANCE TIME ENTERPRISE BRAND PLATFORM BUSINESS MODEL BUSINESS CAPABILITIES PRODUCT O R G A N I Z AT I O N S … A N D A R C H I T E C T S N E E D TO B E A B L E TO P R O V I D E T H E M E A N S TO E N A B L E T H I S C H A N G E FOUR LEVELS OF MIXING: AT THE VALUE SYSTEM LEVEL
  42. 42. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 42 FOUR LEVELS OF MIXING: AT THE BUSINESS MODEL & VALUE SYSTEM LEVEL 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 WRIGLEY PEPSICO 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 organization is one that is thought of and executed as a whole
  43. 43. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 43 COHERENCY BETWEEN SERVICES AND VALUE Example: Financial Information Management Journey S C O R E K E E P E R S D I S C I P L I N E D O P E R ATO R S C O N S T R A I N E D A D V I S O R S VA L U E I N T E G R ATO R S HIGH HIGH FINANCEEFFICIENCY B U S I N E S S I N S I G H T Profitability Analysis Fulfilment Operations Time to profitability of xParcel product with Telstra account Provide Statutory Reporting
  44. 44. C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 44 QUESTIONS?

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