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Business Driven Architecture for Strategic Transformation


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Business Driven Architecture for Strategic Transformation

  1. 1. Driven Architecture forStrategic TransformationJuly 18, 2011David BakerPrincipal, PwCProposition LeaderStrategy & Business (mobile)
  2. 2. Businesses face some typical challenges attempting to realize the value locked in their business strategy Inadequate level of Difficulty in identifying clarity in the business “customer experience” or strategy “market” needs Difficulty in Overwhelmed translating Difficulty in quantifying and with complexitystrategic objectives assigning responsibilities for of ongoing to operations and business benefits and costs initiatives technology 7/18/2011 PwC 2
  3. 3. These Business Architecture approaches are key to mitigatingthose challenges Confirm the way the Confirm the full context business wants to operate of the business strategy – products, services and operating model Trace the impact the Define the Define a multi- business strategy and business year sequence of operations have on the capabilities activities business capabilities 7/18/2011 7/18/2011PwC 3
  4. 4. The first step is to confirm the context of the business strategy To achieve alignment, we must first: Internal & External Drivers • Understand the factors that motivate the Makes business operative Vision Mission Statement Statement • Extract and drive additional detail into Amplifies A component elements of the business plan of Channels • Clearly articulate the Ends – things that Effort Goals Strategies the business wishes to achieve Quantifies Implements • Clearly articulate the Means – things that the business will employ to achieve those Objectives Channels Effort Ends Tactics & Metrics In this way, the business plan becomes ENDS = Desired MEANS = Courses the foundation for connecting Results of Action solutions to their business intentTerms and relationships adapted from the Object Management Group’s Business Motivation Model, Release 1.3 7/18/2011 PwC 4
  5. 5. You can use several methods to engage the business leadership in confirming the business strategy Gather Existing Draw and Strategy Model theDocuments resulting: Hold Hold Workshops Workshops Goals, on Strategic on Strategic Objectives, “Ends” “Means” Metrics, Conduct Strategies,interviews of Tacticskey businessstakeholders 7/18/2011 PwC 5
  6. 6. Confirm the way the business want to operate – Business Offerings & Model Share of Asset Type Total Revenue of U.S.-Listed Firms Financial Physical Intangible Human Manufacturer N/A* Creator 57% 0% 57% 0% 57%Asset Rights Financial Wholesale / N/A* Distributor Trader Retail 14% <1% 14% ~0% 14% Financial Physical IP Landlord Contractor Landlord Landlord Landlord 28% 8% 10% 2% 8% 28% Financial Physical Broker Broker Broker 1% <1% <1% 0% ~0% 1% Share of Total Revenue of 9% 9% 81%81% 2% 2% 8% 8% 100% U.S.-Listed Firms Source: “The Business Models Investors Prefer”, MIT Sloan Management Review, * Not a legal business model 7/18/2011 Peter Weil, Thomas W. Malone, and Thomas G. Apel, June 22, 2011 PwC 6
  7. 7. Key questions to answer using the Business ModelFramework• What are our business models today, and how have they changed over the last 10 years?• How do our business models compare with those of our traditional and nontraditional competitors?• How can we adjust our overall business model to include more revenue from the models that are most highly valued today (such as IP landlord and innovative manufacturer) ?• To make any change in our business model, what capabilities do we need to further develop, and what strategic experiments can we do today to test new business models for tomorrow?Answers to these questions are input to the impact analysis necessary to determine how the business must change to reach its goals Adapted from : “The Business Models Investors Prefer”, MIT Sloan Management 7/18/2011 Review, Peter Weil, Thomas W. Malone, and Thomas G. Apel, JunePwC 7 22, 2011
  8. 8. Confirm the way the business wants to operate – OperatingModelHigh Coordination Unification Shared customers with highly Consistent product design and customized products, services, globally integrated processes for and features all customers Business Process Integration Focus: Focus: Integration capabilities Centrally designed and managed Diversification Replication Few shared customers with Few shared customers with highly variable product design operationally similar product units Focus: Focus: Localized development speed and Replication of standard capabilities autonomy and provision of APIsLow Business Process Standardization High 7/18/2011 Source: Jeanne Ross (MIT CISR) - Enterprise Architecture as StrategyPwC 8
  9. 9. One outcome of the Operating Model decision is the level ofservice standardization across the enterpriseHigh Coordination Unification Prsntn Business Enterprise Data Prsntn Business Enterprise Data Svcs Services Services Services Svcs Services Services Services Business Process Integration Infrastructure Services Infrastructure Services Diversification Replication Prsntn Business Enterprise Data Prsntn Business Enterprise Data Svcs Services Services Services Svcs Services Services Services Infrastructure Services Infrastructure ServicesLow Business Process Standardization High 7/18/2011PwC Not Std Partial Standard 9
  10. 10. A business capability map (current and future) is a critical input for doing impact analysisStrategy & Vision Product & Service Marketing & Operations Service Design Selling & Support• Develop Strategy & • Analyze Products & • Advertize Products • Plan & Distribute Schedule Vision Service Marketing & Services • Optimize Aircraft Routes • Plan & Schedule Crew• Decide & Manage • Design Product & • Offer Products & • Plan & Schedule Station / Ground Initiatives Service Offerings Services Facilities / Resources • Plan & Schedule Maintenance• Conduct Market • Fare Product & • Make Reservations Equipment & Resources Research Service Offerings • Book / Issue • Checkin• Segment Target • Design Brands Tickets • Perform Gate & Boarding Services Markets • Plan Flight & Dispatch • Conduct Product & • Collect Payments • Track Flight & Aircraft• Define Product & Services Tests • Perform Inflight Services Brand Strategy • Manage Revenue • Perform On-ground Operations • Perform Maintenance • Manage Partners • Service Customer Requests • Manage Customer Relations Corporate Functions HR Finance Supply Contracts & Comms Compliance IT Process Training Facilities Chain Legal Improv. 7/18/2011 Example derived from an airline company PwC 10
  11. 11. Once the business decisions are understood, current andfuture states can be compared to generate a roadmap Input Current State  Identify  Case for Impact and (strategy, Change business and Gaps operating model, technology) Future State  Identify   Lay Out (strategy, Themes & Mitigate Risk business and Roadmap operating model, Programs technology)  Business  Sequence Prioritization Programs 7/18/2011PwC 11
  12. 12. Conduct workshops with business owners and SMEs toanalyze how each business architecture decision impacts thebusiness capabilitiesBusiness Strategy Business Model Operating Model Ends Means Vision Mission Goals Strategies Objectives Tactics Business Operating Tactics Model Model Impact Impact Impact Capability 1 Impact A Impact B Impact C Business Capability Map Capability 2 Impact D Impact E Impact F Capability 3 Impact G Impact H Impact I Capability 4 Impact J Impact K Impact L 7/18/2011PwC 12
  13. 13. Example Impact Analysis 1 Biz Model 41 Op Model 140 Tactics Decision Decisions Business Operating Tactics TechnologyLevel 1 Level 2 Model Model Impact Impact Impact ImpactStrategy & Vision Defined Product & Brand StrategyProduct & Service Design Design Product & Service OfferingsMarketing & Selling Offer Products & ServicesOperations Service & Support Optimize Aircraft RoutesCorporate Functions HR Finance Supply Chain 7/18/2011 Example derived from an airline company PwC 13
  14. 14. The capability model also provides a link to the systems architecture Products & Marketing & Operations Corporate Strategy & Vision Services Design Selling Service & Support Functions Pricing, Inv. & Itineraries Pricing, Inv. & Itineraries Airport Concourse Airport OperationsExperience Cargo Customer Customer Service & Support Loyalty Loyalty Customer Business Services Back Office Customer Funds Engines Customer Management Engine Reservation System Network Planning Network Planning Crew Planning Aircraft Operations Crew Scheduling Crew Training Ent. Workforce Admin. Operations Bus. Services Cockpit Systems Cabin Systems Enterprise Safety Mgmt. Enterprise Safety Mgmt. Operations Control Weather Automated Outbound Ms Maintenance & Eng. Planning and BudgetingEnterprise Finance/Controlling Mgmt. Sourcing/Procurement Human Capital Mgmt. Analytics/Reporting Legend Analytics/Reporting Capability Areas Self Service Portal System Suites Img. / Doc Mgmt / Wkflw 7/18/2011 Example derived from an airline company PwC 14
  15. 15. Bundle changes into initiatives and describe the case forchange for each Case for Change Objectives Achieved Business ID Initiative Rank T I E C S Risk Cost Sequence P W 2 27 Combine multiple proposals into one solid case 7 H N/A N/A N/A M N/A L $xxx,xxxRationale for achieving Objectives Risk Rationale Technology Impact  Reduces the need for the RGO to review and  Rate discounts will not be able to be factored  Change to system to support screens for consolidate multiple proposals since new proposal will have been neither rated selection of proposals to merge  Reduces errors that result from combining nor sent for underwriting  Change to system for logic to take multiple multiple proposals manually proposal and safely combineTactics Included  Copy and combine coverages from multiple proposals into a single new proposal for submission to Case Install; this will not overwrite any existing information in the original proposal  Provide the end user the capability to submit multiple proposals for the final submit  Validate or rate the combined proposal (prior to submission to Case Install)Related Tactics Capabilities Involved Current Assumptions  Business Sequence 5 (55) – Generate Application Package  New Business  Only coverages from submitted proposals can be combined during Proposal Process  Amendments  Amendments and renewals will not require this functionality  Business Sequences 8 (65) – Make Final Proposal Updates as these processes will use a single proposal Prior to "Submit“  Applies only to proposals created in CPS  Business Sequence 9 (25) – Capture “Scribbles” in CPS  Existing (current state) PDF capabilities will remain Notes Section  Business Sequence 11 (54) – Submit Proposal to SBR and Case Install  Business Sequence 12 (30) – Transfer Proposal to HQ 7/18/2011PwC 15
  16. 16. Strategic Planning projects require Enterprise Architects from both business and technology competencies… Role # Competency / Responsibilities  Focus is on cross-enterprise business functions, architecture processes, and Enterprise oversight Handful  Ensure interoperability across domains ArchitectEnterprise  Ensure compliance with architectural blueprints, roadmaps, and standards per  Focus is on enterprise-level business solutions in a given domain such as HR, Architects Business business Finance, Supply Chain, Claims, etc domain, Architect number  Provide deep business knowledge and guide project architects to ensure varies compliance with enterprise and domain blueprints Technology <= #  Focus is on system technology solutions; for example, a component of a technology solution such as enterprise data warehousing, content management, Architect domains integration, etc Must meet  Provide architectural expertise to lead solution delivery projects Project project  Responsible for overall system architecture and integration with other domains and Architect demands systems  Focus on “internal” software architecture Software Varies  Creates technical requirements based on business requirements and technicalProject design specifications Developers Engineer  Process planning and control, verification and validation Business Varies  Converts the business model, organization and operations into system requirements Analyst Software  Codes software modules to design specifications Varies Developer  Unit tests software modules 7/18/2011 16
  17. 17. …that can come from multiple different organizations within your enterprise Business Environment Emerging Technologies (regulation, compliance, market factors) Enterprise Architecture Information Technology Business Business Architecture Business Owners Application Architecture Business Relationship Managers Business SMEs Information Architecture Infrastructure Architecture Services Services Services Strategic Planning Project Architecture PMO(updates, exceptions) Project Manager Technology Domain Business Domain Architects “Architects” SMEs 7/18/2011 PwC 17
  18. 18. Summary of Business Driven Architecure• Drive detail into the strategy context• Know the business model and any desired changes• Know the operating model and any desired changes• Perform impact analysis using the capability map• Bundle changes into initiatives• Build the supporting case for change and sequenced roadmap 7/18/2011PwC 18
  19. 19. Questions?©2011 PwC. All rights reserved. "PricewaterhouseCoopers" refers toPricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the contextrequires, the PricewaterhouseCoopers global network or other member firms of thenetwork, each of which is a separate legal entity. This proposal is protected under thecopyright laws of the United States and other countries. This proposal containsinformation that is proprietary and confidential to PricewaterhouseCoopers LLP, andshall not be disclosed outside the recipients company or duplicated, used or disclosed,in whole or in part, by the recipient for any purpose other than to evaluate this proposal.Any other use or disclosure, in whole or in part, of this information without the expresswritten permission of PricewaterhouseCoopers LLP is prohibited. 7/18/2011PwC 19