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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
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
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
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
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
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
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
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
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
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
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?
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?
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
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
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
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
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
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.
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.
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
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
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
.
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
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
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
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
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.
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
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
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”
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
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”
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
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
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
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
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
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
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
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
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
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
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
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
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Business by Design

  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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?