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C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 1
www.enterprisearchitects.com
BUSINESS BY DESIGN
N O V E M B E R 2 0 1 5
CRAIG MARTIN
Chief Architect, Enterprise Architects & FromHereOn
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 2
WHAT'S BUSINESS ABOUT?
Utility
(Foundation)
Innovate
Build
Advantages
Assemble
Prolong
Advantages
Mix
Reduce
Disadvantages
DIFFERENTIATION
D I F F E R E N T I AT I O N
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 3
WHAT'S BUSINESS ABOUT?
S O L V I N G P R O B L E M S
‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone
Unknowable:
The relationship between cause
and effect is impossible to determine
as they constantly shift. In chaos, it is
necessary to act first and then sense
through the result of action how to
further respond. Understanding the
problem comes later. This is the
domain of rapid response.
Example: Natural disasters
Unknown Problems:
The problem is in constant flux as a
change to the situation causes ripple
effects and unpredictability
in other aspects. Information is often
incomplete. Rather than implementing
a solution, devising a concept, testing,
iterating and then responding is
needed. Problems often become
complex when human behavior is a
significant factor. This is the domain of
emergence.
Example: Schooling experiences,
organizational change management,
traffic management
Known unknowns:
A complicated problem can have multiple
right solutions. Complicated problems are
understood, analyzed and then responded
to. It often requires expertise to solve and is
largely process driven. Solving a
complicated problem often requires the
right expertise along with the right tools. In
this realm you may know you have a
problem but may not be able to solve it
alone. This is the domain of expertise.
Example: Fixing a car, constructing an
airplane.
Known knowns
A simple problem is one of cause and
effect. The solution is rarely disputed. The
problem can be categorized, understood
and a response devised based on the
information. This is the domain of best
practice.
Example: 1+1 = 2, solving a jigsaw puzzle.
The Knowledge /
Innovation funnel
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 4
WHAT'S BUSINESS ABOUT?
F I N D I N G T H E R I G H T H E U R I S T I C
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 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 5
WHAT'S BUSINESS ABOUT?
M O V I N G F R O M E X P L O R AT I O N T O E X P L O I TAT I O N
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
Design
Thinking
Business
Architecture
Thinking
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 6
WHAT'S BUSINESS ABOUT?
S P E E D T H R O U G H T H E F U N N E L
Source: Adapted from “Business Process
Change” by Paul Harmon
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
Capabilities
Core Differentiating
Capabilities
Everyday, highly
repeatable and
automated
Make repeatable and
reliable to gain efficiency
Core Competitive
Capabilities
GOAL: Reliably produce
consistent, predictable
outcomes
GOAL: Validity- Produce
outcomes
that meet desired
objectives
People Dominance
Process Dominance
Technology Dominance
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 7
DEMOCRATISATION OF KNOWLEDGE
The commodity space is growing, making the differentiation space more competitive
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
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 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 8
OUR ROUTE TO SOLVING PROBLEMS
ABSTRACT
CONCRETE
Insight:
“I want a beautiful
environment”
Opportunity:
Paint the wall,
Move, Buy new
furniture, Hand a
picture
Problem
Statement:
“I need a hole”
Solution Statement:
“I need a drill”
PROBLEM SOLUTION
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 9
THE EMERGENCE OF ENTERPRISE DESIGN
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Understanding
problem based on
drivers, pressures,
environment and
working out
motivation
Developing operating
models and solutions
DESIGN
THINKING
ARCHITECTURE
THINKING
ENTERPRISEDESIGN
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 10
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Developing operating
models and solutions
NAVIGATING THE QUADRANTS
A P P R O A C H E S TO C H A N G E
SOLUTION FOCUSSED
TRANSFORMATION
FOCUSSED
DISRUPTION
FOCUSSED
DELIVERY FOCUSSED
Understanding
problem based on
drivers, pressures,
environment and
working out
motivation
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 11
DESIGN MINDSET
U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S
R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 12
ABSTRACT
CONCRETE
PROBLEM SOLUTION
NAVIGATING THE QUADRANTS
A P P R O A C H E S TO C H A N G E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 13
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 14
TOOLS FOR BUSINESS DESIGN:
A SELECTION
DISCOVER
Literature Review
Time Machine
Shadowing
Touchstone Tours
Service Safari
A Day in the Life
Diary Studies
The Five Whys
Journey Maps
DEFINE
Mapping Complex
Situations
Stakeholder Map
Customer Persona
Empathy Mapping
Mind Mapping
Scenarios
Affinity Mapping
How Might We
DEVELOP
Bodystorming
Collaborative
Ideation
Co-creation
Storyboards
Image Boards
Prototyping
Heuristic Evaluation
Critique Circle
DELIVER
Rapid Iterative
Testing
A/B Testing
Usability Testing
Ergonomic Analysis
Value Opportunity
Analysis
Feedback Review
The Key is process and emergence
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 15
THE PROCESS OF DESIGN
U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S
R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 16
THREE LENSES OF HUMAN CENTERED DESIGN
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 17
FOUR ORDERS OF DESIGN
› Enterprise Design
› Business Design,
› Organisation Design
› Service Design,
› UX Design, Instructional Design,
› Process Design
Richard Buchanan, (1992) Wicked Problems in Design Thinking
› Product Design, Engineering,
Architecture
› Technology Design
› Information Design
› Graphic Design, Visual Design
• Information Design produces designs for communicating intended meaning
through symbols and information
• Technology Design produces designs for platforms and systems to deliver
information and services
• Service Design produces designs for what needs to be achieved in terms of
person centered outcomes and experiences
• Enterprise Design produces designs for orchestrating Service Designs and
their implementation via Technology and Information designs
Disruption normally occurs here
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 18
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition
Influencers
Values
Value and Valuable
Value Proposition
Value System Engineering
Prototypes
Business Scenario
Business Model Canvas
Problem definition
Business Motivation
Model
Value Chain
Capabilities
Cross-Functional Capabilities
Capability Overlays
Roadmap & Planning
MOVING THROUGH THE QUADRANTS
D I S C O V E R D E F I N E D E V E L O P D E L I V E R
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 19
What is disruption?
› Innovation that creates a new
market
› Innovation that creates a new
value network
› Eventually disrupts an existing
market and value network
› Displaces an earlier offering or
technology
EXAMPLES OF DISRUPTIVE BUSINESS MODELS:
» Apple and their reduced switching costs and increased
barriers to entry
» Nespresso and their recurring revenues model
» Dell and their “earn before you spend” model
» Facebook and their “getting others to do the work”
model
» Xerox and the pay per use model
» Google and the micro-advertising model
» Amazon and their long tail model
» Jeep
» Railroads
» Printing press
» Gunpowder
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 20
WHEN DOES DISRUPTION OCCUR?
› First stage of disruption, an innovator
makes a product much more affordable
and simpler to use (for the user) than
what currently exists.
› The second stage of disruption is when
additional technological change is
added which makes it simpler and less
expensive to build and maintain the
products.
› The new change eventually displaces
the existing market and value network,
resulting in a radical improvement in
performance
Disruptive technologies take a while to change the market
Christensen, Clayton M. (2010-09-06).
Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns
PERFORMANCE
TIME
Market for old
technology
Market for new
technology
New replaces
old technology
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 21
BLUE OCEAN
 Create uncontested markets
 Make competition irrelevant
 Create & Capture new
demand
 Break value / cost
trade-off
 Align with differentiation
AND low cost
RED OCEAN
 Compete in existing
markets
 Beat the competition
 Explore existing demand
 Make the value/cost
trade-off
 Align with differentiation
OR low cost
Why does disruption occur?
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 22
DIGITAL DISRUPTION MAP
*Deloitte – Digital Disruption. Short fuse, big bang?
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 23
› Turned off to school
› Focused on passing the next test
› Not excited by the classroom
› No application to life after school
› Discouraged from following their own interests
› Knowledge = gradual accumulation of right
answers acquired through effort and obedience to
the instructor
› Role of the instructor is to TEACH them
› Right answers for everything exist
M OT I VAT I O N ? R E L E VA N C E ?
A U T H E N T I C I T Y ?
WHY IS DISRUPTION
REQUIRED IN
EDUCATION?
From an article by Roger Shank, Engines for Education
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 24
› Prescribed Curriculum
› Whiteboards
› Desks in rows
› Books and worksheets
› Paper & pencil
› Focus on the front (teacher)
› Read, take notes
› Study as an individual
› Take tests to measure learning
T R A D I T I O N A L C L A S S R O O M
WHY IS DISRUPTION
REQUIRED IN
EDUCATION?
From an article by Roger Shank, Engines for Education
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 25
PHOTO IN NEWS
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 26
WHY IS DISRUPTION REQUIRED IN
EDUCATION?
› These companies bring inputs of materials
into one end of their premises, transform
them by adding value, and deliver higher-
value products to their customers at the
other end.
› Most schools and universities currently
operate like a VAP business (Value chain
anyone?)
› Students are herded into a classroom at
the beginning of the school year, value is
added to them, and they’re promoted to
the next grade at year’s end.
› It’s a form of mass production on an
assembly line
Traditional education’s present value network is largely a VAP business
1. PREPARE &
PRODUCE TEXTBOOKS
& OTHER
INSTRUCTIONAL
MATERIALS
6. TEACHER
TRAINING
5. TESTING AND
ASSESSMENT
2. ADOPTION
DECISIONS FOR
CONTENT AND
CURRICULA
3. DELIVER
CONTENT TO
STUDENTS
4. INDIVIDUAL
ASSISTANCE
*Øystein Fjeldstad and Charles Stabell
Value Added Processes (VAP) businesses model
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 27
DISRUPTION ALTERS ENTIRE VALUE NETWORKS
Example: Disruption will alter the entire value chain
and place the student at the centre
FACULTY &
STAFF
CONTENT
CLASSES
SOCIAL
INTERACTIO
N
LECTURERS
STUDENTS
STUDENTS &
SOCIAL
INTERACTION
CONTENT
CLASSES
FACULTY
STAFF
FACILITATORS
Teach at SCHOOL and do Homework at HOME Teach at HOME and do Homework at SCHOOL
Many teachers, many schools
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 28
EDUCATION DISRUPTION
SOLUTION SHOPS
› Employ experienced, intuitively trained
experts whose job is to diagnose problems
and recommend solutions.
› Experts vs expertise
FACILITATED NETWORKS
› Customers exchange with each other.
› Participation in the network typically isn’t the primary
profit engine for participants.
› Rather, the network is a supporting infrastructure that
helps the buyers and sellers make money elsewhere.
› The company that makes money in a facilitated
network is the one that facilitates the network.
This has opened up the space for other value networks in education
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 29
EDUCATION
DISRUPTION
› It is rare for a disruption to appear in just one part of a
value network without the rest of the system
changing, too.
› When a disruption arises, a new value network almost
always emerges to replace the existing one if the
disruption is to be successful.
› The reason the whole value network must be replaced
for a disruption to occur is that, in each stage, the
actors’ business models, economic incentives, and
rhythms of innovation and technological paradigms are
consistent and mutually reinforcing.
› Companies with disruptive economics simply are not
plug-compatible with the old value network.
› What this means is that the entire system for creating
education materials, making the decisions about which
materials to adopt, and delivering the content to
students must, and will, change.
› It is this second stage of disruption in public education
that will cause the world to “flip” and make student-
centric online technology a reality.
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 30
VALUE SYSTEM DESIGN
THE MANAGING RISK
VALUE SYSTEM
Insurance
Hospitals
Gyms
Funerals
Legal
Panel
BeatersTraffic
Management
Broadcasting
& Radio
Gaming
THE
INSURANCE
VALUE SYSTEM
Insurance
Hospitals
Panel
Beaters
Medical
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 31
DISRUPTIVE MODELS ARE EMERGING IN THE
CUSTOMER DRIVEN SPACE
SELLER DRIVEN ENTERPRISE CUSTOMER CENTRIC ENTERPRISE CUSTOMER DRIVEN ENTERPRISE
“Maximize product
profitability”
Push Selectively Target Pull (collaboration)
DATA ANALYSIS
SERVICE Interactive & Proactive
UNDERSTANDING Segmented Individualized
CUSTOMER OFFERS Intra-enterprise bundles Inter-enterprise bundles
ORGANISATION Integrated Function Customer Outcome
CHANNELS Segment Driven Integrated and Seamless
“Maximize market
share”
“Maximize customer
lifetime value”
MARKETING
Passive & Reactive Interactive & Reactive
Insight as Art Factual insight Predictive insight
Broad
Product Driven
Singular
Functional Silo
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 35
NEW VALUE ENGINES MUST BE CREATED TO CATER
FOR NEW VALUE NETWORKS AND BUSINESS MODELS
The Selling Concept - Product Driven
The Value Concept - Customer Driven
The Marketing Concept - Customer Centric
Production Products
Selling and
Promotion
Profit
Through sales
volume
STARTING
POINT FOCUS MEANS ENDS
Target Market
Segment
Segment
Needs
Integrated
Marketing
Profit through
Increased
Market Share
STARTING
POINT FOCUS MEANS ENDS
Target individual
Customer
Intention
Outcome
Marketing
Profit through
customer lifetime
satisfaction
STARTING
POINT FOCUS MEANS ENDS
The customer driven shift
The digital
strategy focus
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 36
‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD
PERORMANCE
TIME
ENTERPRISE
BRAND PLATFORM
BUSINESS MODEL
BUSINESS CAPABILITIES
PRODUCT
PRODUCT AND BUSINESS MODELS GO STALE
Organisations…and
architects need to be able to
provide the means to enable
this change
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 37
DIFFERENT BUSINESS
MODELS NEED TO BE MIXED
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 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 38
*Adapted from Geoffrey Moore’s: Dealing with Darwin
Each industry moves along a
life cycle, with different
opportunities for
competitive advantage at
each stage
CHANGING BUSINESS MODELS
Innovative business models are
developed towards the end of the
maturity phase
Introduction Growth Maturity Decline
TOTAL
INDUSTRY
REVENUE
TIME
DISRUPTOR
ENTERS
MARKET SHARE, REVENUE
& COST BECOME KEY
PRODUCT
INNOVATION
REDUCES
PROCESS INNOVATION
BEGINS
PRODUCT LEADERSHIP CUSTOMER INTIMACY
OPERATIONAL EXCELLENCE
V A L U E D I S C I P L I N E
O R I E N T A T I O N
T H R O U G H T H E
I N D U S T R Y
L I F E C Y C L E
Business Model
Transition
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 39
THE COMPLEXITY OF BUSINESS
MODEL DESIGN HAS INCREASED
Leading and Best Practice Research, 2011/2012
Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 40
NON-CORE CAPABILITY (MEET)
The goal is to meet market standards,
exploitation and reliability
Produce consistent, predictable outcomes
Focus on effectiveness and efficiency
CORE COMPETING CAPABILITY (COMPETE)
The goal is competitive parity
Focus on innovation and efficiency
CORE DIFFERENTIATING CAPABILITY (BEAT)
The goal is competitive advantage,
exploration & validity
Focus on innovation and efficiency
Produce outcomes that meet an objective
FROM THE BUSINESS MODEL TO
THE CAPABILITY RESOURCES
A reliable system will
produce the same test
results every time
A valid system will produce a
result that is shown, through the
passage of time, to be correct
C O S T
V A L U E
5%
15%
80%
Leading and best practice research, 2011/2012
THE ENVIRONMENT
BUSINESS MODEL
Revenue Model
Value Model
Product & Service Model
Performance Model
Cost Model
Operating model
Differentiating
Capability
Non-Core
Capability
Competing
Capability
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 41
UNDERSTANDING THE ENGINE TO
PRODUCE THE BUSINESS FIT
The operating model delivers the infrastructure required to
deliver the products and services to the customer segments
Aligning what is valuable to the customer and what is value to the business is referred to as
the business fit. This means that the engine delivers both aspects and is the ideal mix an organization needs to engineer for.
THE ENVIRONMENT
BUSINESS MODEL
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
PRODUCTS &
SERVICES
MODEL
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 42
LINKING MARKET MODELS TO PRODUCT
AND SERVICE MODELS
T H E V A L U E & V A L U A B L E I N T E G R AT I O N
Products and Services
Valuable to the Customer
PRODUCT N
PRODUCT I
PRODUCT TPRODUCT Y
PRODUCT K
SERVICE DSERVICE N
SERVICE H SERVICE P
PRODUCT B SERVICE N
SERVICE T
PRODUCT S
SERVICE A
PRODUCT X
PRODUCT H
SERVICE O
PRODUCT N
PRODUCT ESERVICE C
SERVICE Q
SERVICE N
SERVICE T
SERVICE B
Customer Outcome
CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC
Establishing my account is
quick and simple…
Integration is quick and
easy, with the right help
available
Efficient, with choices that
make it convenient
I know when the shipment
will arrive
I can find out whether my
shipments were delivered;
I get a meaningful
resolution to my problem
“I want to set-up my
account”
“I want to get ready to send
my products”
“I want to send a shipment”
“I need to know when my
shipment will arrive”
“I want confirmation that
my shipments have arrived”
“Something has gone
wrong with my delivery…”
% of accounts set-up in
<X hours
% of accounts that
utilise more than X
% of orders with no
manual intervention
% of articles with at
least 4 scans
Service Delivery
Performance Metric
# of complaints per
million products
RESEARCH EVALUATE PURCHASE USE INTEGRATE SERVE
Value to the Business
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 43
CUSTOMER BEHAVIOUR: UNDERSTAND THE
EMOTIONAL ROLLER COASTER OF YOUR CUSTOMERS
Incremental, significant or transformation
changes required to improve the experience
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 44
BUSINESS BEHAVIOUR MEETS
CUSTOMER BEHAVIOUR
What Value Maps are now required to address
the sub-optimal customer experience
What are the value maps
required to deliver this
outcome
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 45
FOUR LEVELS OF MIXING
AT THE CAPABILITY LEVEL
Its at this point that business begins to see the
true value of using capabilities
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
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 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 46
BUSINESS MODEL EVALUATION
Business model options are evaluated against value drivers or
business model mechanics to determine shortlists
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 47
ARCHITECTURE DELIVERY MODELS
E VA LUAT I O N O F S T R AT E G I C B U S I N E S S O P T I O N S
The capability mixes
are evaluated against
each scenario to
determine the
optimal path going
forward
REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS.
Business Models
Value Streams
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 48
UNDERSTANDING VALUE,
PERFORMANCE AND MOTIVATION
Mission
Strategies
Tactics
Vision
Goals
Objectives
OUTCOME
C A P A B I L I T Y
People
Process
Technology
Information
Business
Model
Value Chain
Capabilities
Performance
Model
Value
Model
ENDMEANS
HOW
What comes first?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 49
ONE SIZE DOES NOT FIT ALL
Christensen, Clayton M. (2010-09-06).
Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns
Different problems required different
organization structure responses
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 50
SEQUENCING THE PROCESS
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Understanding the problem through
drivers, pressures, environment and
working out motivation
Developing operating
models and solutions
TRANSFORMATION
FOCUSSED
Problem Motivation Business Model
DISRUPTION
FOCUSSED
Problem MotivationBusiness Model
Where to start?
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 51
“ARCHITECTURE THINKING”
M O T I VA T I O N M O D E L B U S I NE S S M O D E L
S E R VI C E M O D E L
C A P A B I LI T Y M O D E L
Peo pl e
R O A D M A P
GO VE R NA NC E
* Closed feedback
loop to Motivation
Model
Vision
Strategy
Blueprinting
Roadmapping
Governance
In f o r m at i o n
T echn o l o gy
Pr o ces s
Design Thinking: Empathise, Define, Ideate, Prototype, Test
M A R KE T M O D E L
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT
PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 52
S O C I A L I S E W I T H B U S I N E S S , L I N K E I M E F F E C T I V E N E S S T O B U S I N E S S
G O A L S A N D R I S K , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R
LINKING INFORMATION CAPABILITY ROADMAP TO
BUSINESS CAPABILITY, RISK AND MOTIVATION
Understand business motivation
with respect to information
management
Identify the critical business
capabilities to support the strategies
Define roadmap – prioritised to
support timely delivery of EIM
capability linked to business need
1 2 3Understand changing needs for a
digital business
Identify the information risk
appetite and risks
Assess how application strategies
are impacted by low EIM
capability maturity
Identify the EIM capabilities
materially impacting business
capability and information risk –
pertinent to the business
motivation
4
6 7 8 9 Measure and monitor performance
5 Assess how business capability
effectiveness is materially impacted
by low EIM capability maturity
MOTIVATION
MODEL
BUSINESS
CAPABILITIES
IM ROADMAP
GOVERNANCE
* Closed feedback
loop to
Motivation
Model
Information
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
1
2
3
4 6
8
7
Information
Risk
Digital
Requirements
9
APPLICATIONS
5
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 53
S O C I A L I S E , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R
CLOUD STRATEGY & ROADMAPPING JOURNEY
Understand the motivation for Cloud Understand the risk appetite of the
business and the risk profile of the
offering
Obtain consensus, support and
commitment
1 2 3Understand business requirements for
Cloud
Identify and classify assets going into
the Cloud
Assess the Cloud service offerings Define the roadmap
4
5 6 7 8 Measure and monitor performance
7
MOTIVATION MODEL
CLOUD SERVICE
OFFERINGS
CAPABILITY MODEL
ROADMAP
GOVERNANCE
* Closed feedback
loop to
Motivation Model
Information
Technology
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
1
2
3
4
5
6
Information
& Risk
CLOUD
REQUIREMENTS
8
APPLICATIONS
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 54
HUMAN CENTRED SERVICE AND
CAPABILITY DEVELOPMENT
R O LE S &
O P . M O D E L
C A P A B I LI T Y
M O D E L
R O A D M A P
GO VE R NA NC E
* Closed feedback
loop to Motivation
Model
MEANS ASSESSMENT
M O T I VA T I O N
M O D E L
INFLUENCERS
ASSESSMENT
MEANS ENDS
S E R VI C E M O D E L /
C A T A LO GU E
WHAT
WHY
C O M M U NI C A T I O N
E NGA GE M E NT
M O D E L
D E M A ND
A NA LYS I S S O U R C I NG
BUSINESS CONTEXT
HOW
WHO
WHERE
WHEN
C A P A B I LI T Y
A S S E S S M E NT
B U S I NE S S M O D E L
C U S T O M E R P E R S O N A S
V A L U E P R O P
E M P A T H Y M A P S
C U R R E NT F U T U R E
S E R VI C E D E S I GN P R O C E S S
E NA B LE S
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 55
THE BUSINESS OF ARCHITECTURE
ROADMAP
ROLES &
OP. MODEL
GOVERNANCE
* Closed feedback loop to
Motivation Model
MEANS ASSESSMENT
SERVICE MODEL
/ CATALOGUE COMMUNICATION
ENGAGEMENT
MODEL
DEMAND
ANALYSIS SOURCING
CAPABILITY
ASSESSMENT
MOTIVATION
MODEL
INFLUENCERS
ASSESSMENT
MEANS ENDS
BUSINESS MODEL
CAPABILITY
MODEL
BUSINESS CONTEXT
Where
When
Who
How
Why
What
Enables
MANDATE
SERVICE CO-DESIGN
CURRENT FUTURE
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 56
ABOUT EA
zero
PEOPLE TRAINED
THIS YEAR
V E N D O R A L I G N M E N T
MORE THAN 4500 PEOPLE
TRAINED IN ARCHITECTURE
PRACTICES (AND RISING)
13YEARS IN BUSINESS
8GLOBAL OFFICES
4500
MORE THAN 10,000 DAYS OF
STRATEGY & ARCHITECTURE
SERVICES DELIVERED LAST YEAR
10,000
oneCOMMON METHOD
1000+
fiveCONTINENTS WITH
TRAINING OPTIONS
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 57
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 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 58
QUESTIONS?
C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 59enterprisearchitects.com

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Looking for Disruptive Business Models in Higher Education

  • 1. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 1 www.enterprisearchitects.com BUSINESS BY DESIGN N O V E M B E R 2 0 1 5 CRAIG MARTIN Chief Architect, Enterprise Architects & FromHereOn
  • 2. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 2 WHAT'S BUSINESS ABOUT? Utility (Foundation) Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages DIFFERENTIATION D I F F E R E N T I AT I O N
  • 3. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 3 WHAT'S BUSINESS ABOUT? S O L V I N G P R O B L E M S ‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone Unknowable: The relationship between cause and effect is impossible to determine as they constantly shift. In chaos, it is necessary to act first and then sense through the result of action how to further respond. Understanding the problem comes later. This is the domain of rapid response. Example: Natural disasters Unknown Problems: The problem is in constant flux as a change to the situation causes ripple effects and unpredictability in other aspects. Information is often incomplete. Rather than implementing a solution, devising a concept, testing, iterating and then responding is needed. Problems often become complex when human behavior is a significant factor. This is the domain of emergence. Example: Schooling experiences, organizational change management, traffic management Known unknowns: A complicated problem can have multiple right solutions. Complicated problems are understood, analyzed and then responded to. It often requires expertise to solve and is largely process driven. Solving a complicated problem often requires the right expertise along with the right tools. In this realm you may know you have a problem but may not be able to solve it alone. This is the domain of expertise. Example: Fixing a car, constructing an airplane. Known knowns A simple problem is one of cause and effect. The solution is rarely disputed. The problem can be categorized, understood and a response devised based on the information. This is the domain of best practice. Example: 1+1 = 2, solving a jigsaw puzzle. The Knowledge / Innovation funnel
  • 4. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 4 WHAT'S BUSINESS ABOUT? F I N D I N G T H E R I G H T H E U R I S T I C 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
  • 5. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 5 WHAT'S BUSINESS ABOUT? M O V I N G F R O M E X P L O R AT I O N T O E X P L O I TAT I O N 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 Design Thinking Business Architecture Thinking
  • 6. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 6 WHAT'S BUSINESS ABOUT? S P E E D T H R O U G H T H E F U N N E L Source: Adapted from “Business Process Change” by Paul Harmon 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 Capabilities Core Differentiating Capabilities Everyday, highly repeatable and automated Make repeatable and reliable to gain efficiency Core Competitive Capabilities GOAL: Reliably produce consistent, predictable outcomes GOAL: Validity- Produce outcomes that meet desired objectives People Dominance Process Dominance Technology Dominance
  • 7. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 7 DEMOCRATISATION OF KNOWLEDGE The commodity space is growing, making the differentiation space more competitive 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 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?
  • 8. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 8 OUR ROUTE TO SOLVING PROBLEMS ABSTRACT CONCRETE Insight: “I want a beautiful environment” Opportunity: Paint the wall, Move, Buy new furniture, Hand a picture Problem Statement: “I need a hole” Solution Statement: “I need a drill” PROBLEM SOLUTION
  • 9. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 9 THE EMERGENCE OF ENTERPRISE DESIGN ABSTRACT CONCRETE PROBLEM SOLUTION Understanding the problem from a human centred perspective Prototyping and testing for disruptive options Understanding problem based on drivers, pressures, environment and working out motivation Developing operating models and solutions DESIGN THINKING ARCHITECTURE THINKING ENTERPRISEDESIGN
  • 10. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 10 ABSTRACT CONCRETE PROBLEM SOLUTION Understanding the problem from a human centred perspective Prototyping and testing for disruptive options Developing operating models and solutions NAVIGATING THE QUADRANTS A P P R O A C H E S TO C H A N G E SOLUTION FOCUSSED TRANSFORMATION FOCUSSED DISRUPTION FOCUSSED DELIVERY FOCUSSED Understanding problem based on drivers, pressures, environment and working out motivation
  • 11. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 11 DESIGN MINDSET U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E D I S C O V E R D E F I N E D E V E L O P D E L I V E R
  • 12. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 12 ABSTRACT CONCRETE PROBLEM SOLUTION NAVIGATING THE QUADRANTS A P P R O A C H E S TO C H A N G E D I S C O V E R D E F I N E D E V E L O P D E L I V E R
  • 13. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 13
  • 14. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 14 TOOLS FOR BUSINESS DESIGN: A SELECTION DISCOVER Literature Review Time Machine Shadowing Touchstone Tours Service Safari A Day in the Life Diary Studies The Five Whys Journey Maps DEFINE Mapping Complex Situations Stakeholder Map Customer Persona Empathy Mapping Mind Mapping Scenarios Affinity Mapping How Might We DEVELOP Bodystorming Collaborative Ideation Co-creation Storyboards Image Boards Prototyping Heuristic Evaluation Critique Circle DELIVER Rapid Iterative Testing A/B Testing Usability Testing Ergonomic Analysis Value Opportunity Analysis Feedback Review The Key is process and emergence
  • 15. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 15 THE PROCESS OF DESIGN U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E D I S C O V E R D E F I N E D E V E L O P D E L I V E R
  • 16. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 16 THREE LENSES OF HUMAN CENTERED DESIGN
  • 17. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 17 FOUR ORDERS OF DESIGN › Enterprise Design › Business Design, › Organisation Design › Service Design, › UX Design, Instructional Design, › Process Design Richard Buchanan, (1992) Wicked Problems in Design Thinking › Product Design, Engineering, Architecture › Technology Design › Information Design › Graphic Design, Visual Design • Information Design produces designs for communicating intended meaning through symbols and information • Technology Design produces designs for platforms and systems to deliver information and services • Service Design produces designs for what needs to be achieved in terms of person centered outcomes and experiences • Enterprise Design produces designs for orchestrating Service Designs and their implementation via Technology and Information designs Disruption normally occurs here
  • 18. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 18 ABSTRACT CONCRETE PROBLEM SOLUTION Problem Definition Influencers Values Value and Valuable Value Proposition Value System Engineering Prototypes Business Scenario Business Model Canvas Problem definition Business Motivation Model Value Chain Capabilities Cross-Functional Capabilities Capability Overlays Roadmap & Planning MOVING THROUGH THE QUADRANTS D I S C O V E R D E F I N E D E V E L O P D E L I V E R
  • 19. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 19 What is disruption? › Innovation that creates a new market › Innovation that creates a new value network › Eventually disrupts an existing market and value network › Displaces an earlier offering or technology EXAMPLES OF DISRUPTIVE BUSINESS MODELS: » Apple and their reduced switching costs and increased barriers to entry » Nespresso and their recurring revenues model » Dell and their “earn before you spend” model » Facebook and their “getting others to do the work” model » Xerox and the pay per use model » Google and the micro-advertising model » Amazon and their long tail model » Jeep » Railroads » Printing press » Gunpowder
  • 20. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 20 WHEN DOES DISRUPTION OCCUR? › First stage of disruption, an innovator makes a product much more affordable and simpler to use (for the user) than what currently exists. › The second stage of disruption is when additional technological change is added which makes it simpler and less expensive to build and maintain the products. › The new change eventually displaces the existing market and value network, resulting in a radical improvement in performance Disruptive technologies take a while to change the market Christensen, Clayton M. (2010-09-06). Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns PERFORMANCE TIME Market for old technology Market for new technology New replaces old technology
  • 21. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 21 BLUE OCEAN  Create uncontested markets  Make competition irrelevant  Create & Capture new demand  Break value / cost trade-off  Align with differentiation AND low cost RED OCEAN  Compete in existing markets  Beat the competition  Explore existing demand  Make the value/cost trade-off  Align with differentiation OR low cost Why does disruption occur?
  • 22. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 22 DIGITAL DISRUPTION MAP *Deloitte – Digital Disruption. Short fuse, big bang?
  • 23. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 23 › Turned off to school › Focused on passing the next test › Not excited by the classroom › No application to life after school › Discouraged from following their own interests › Knowledge = gradual accumulation of right answers acquired through effort and obedience to the instructor › Role of the instructor is to TEACH them › Right answers for everything exist M OT I VAT I O N ? R E L E VA N C E ? A U T H E N T I C I T Y ? WHY IS DISRUPTION REQUIRED IN EDUCATION? From an article by Roger Shank, Engines for Education
  • 24. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 24 › Prescribed Curriculum › Whiteboards › Desks in rows › Books and worksheets › Paper & pencil › Focus on the front (teacher) › Read, take notes › Study as an individual › Take tests to measure learning T R A D I T I O N A L C L A S S R O O M WHY IS DISRUPTION REQUIRED IN EDUCATION? From an article by Roger Shank, Engines for Education
  • 25. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 25 PHOTO IN NEWS
  • 26. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 26 WHY IS DISRUPTION REQUIRED IN EDUCATION? › These companies bring inputs of materials into one end of their premises, transform them by adding value, and deliver higher- value products to their customers at the other end. › Most schools and universities currently operate like a VAP business (Value chain anyone?) › Students are herded into a classroom at the beginning of the school year, value is added to them, and they’re promoted to the next grade at year’s end. › It’s a form of mass production on an assembly line Traditional education’s present value network is largely a VAP business 1. PREPARE & PRODUCE TEXTBOOKS & OTHER INSTRUCTIONAL MATERIALS 6. TEACHER TRAINING 5. TESTING AND ASSESSMENT 2. ADOPTION DECISIONS FOR CONTENT AND CURRICULA 3. DELIVER CONTENT TO STUDENTS 4. INDIVIDUAL ASSISTANCE *Øystein Fjeldstad and Charles Stabell Value Added Processes (VAP) businesses model
  • 27. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 27 DISRUPTION ALTERS ENTIRE VALUE NETWORKS Example: Disruption will alter the entire value chain and place the student at the centre FACULTY & STAFF CONTENT CLASSES SOCIAL INTERACTIO N LECTURERS STUDENTS STUDENTS & SOCIAL INTERACTION CONTENT CLASSES FACULTY STAFF FACILITATORS Teach at SCHOOL and do Homework at HOME Teach at HOME and do Homework at SCHOOL Many teachers, many schools
  • 28. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 28 EDUCATION DISRUPTION SOLUTION SHOPS › Employ experienced, intuitively trained experts whose job is to diagnose problems and recommend solutions. › Experts vs expertise FACILITATED NETWORKS › Customers exchange with each other. › Participation in the network typically isn’t the primary profit engine for participants. › Rather, the network is a supporting infrastructure that helps the buyers and sellers make money elsewhere. › The company that makes money in a facilitated network is the one that facilitates the network. This has opened up the space for other value networks in education
  • 29. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 29 EDUCATION DISRUPTION › It is rare for a disruption to appear in just one part of a value network without the rest of the system changing, too. › When a disruption arises, a new value network almost always emerges to replace the existing one if the disruption is to be successful. › The reason the whole value network must be replaced for a disruption to occur is that, in each stage, the actors’ business models, economic incentives, and rhythms of innovation and technological paradigms are consistent and mutually reinforcing. › Companies with disruptive economics simply are not plug-compatible with the old value network. › What this means is that the entire system for creating education materials, making the decisions about which materials to adopt, and delivering the content to students must, and will, change. › It is this second stage of disruption in public education that will cause the world to “flip” and make student- centric online technology a reality.
  • 30. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 30 VALUE SYSTEM DESIGN THE MANAGING RISK VALUE SYSTEM Insurance Hospitals Gyms Funerals Legal Panel BeatersTraffic Management Broadcasting & Radio Gaming THE INSURANCE VALUE SYSTEM Insurance Hospitals Panel Beaters Medical
  • 31. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 31 DISRUPTIVE MODELS ARE EMERGING IN THE CUSTOMER DRIVEN SPACE SELLER DRIVEN ENTERPRISE CUSTOMER CENTRIC ENTERPRISE CUSTOMER DRIVEN ENTERPRISE “Maximize product profitability” Push Selectively Target Pull (collaboration) DATA ANALYSIS SERVICE Interactive & Proactive UNDERSTANDING Segmented Individualized CUSTOMER OFFERS Intra-enterprise bundles Inter-enterprise bundles ORGANISATION Integrated Function Customer Outcome CHANNELS Segment Driven Integrated and Seamless “Maximize market share” “Maximize customer lifetime value” MARKETING Passive & Reactive Interactive & Reactive Insight as Art Factual insight Predictive insight Broad Product Driven Singular Functional Silo
  • 32. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 35 NEW VALUE ENGINES MUST BE CREATED TO CATER FOR NEW VALUE NETWORKS AND BUSINESS MODELS The Selling Concept - Product Driven The Value Concept - Customer Driven The Marketing Concept - Customer Centric Production Products Selling and Promotion Profit Through sales volume STARTING POINT FOCUS MEANS ENDS Target Market Segment Segment Needs Integrated Marketing Profit through Increased Market Share STARTING POINT FOCUS MEANS ENDS Target individual Customer Intention Outcome Marketing Profit through customer lifetime satisfaction STARTING POINT FOCUS MEANS ENDS The customer driven shift The digital strategy focus
  • 33. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 36 ‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD PERORMANCE TIME ENTERPRISE BRAND PLATFORM BUSINESS MODEL BUSINESS CAPABILITIES PRODUCT PRODUCT AND BUSINESS MODELS GO STALE Organisations…and architects need to be able to provide the means to enable this change
  • 34. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 37 DIFFERENT BUSINESS MODELS NEED TO BE MIXED 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
  • 35. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 38 *Adapted from Geoffrey Moore’s: Dealing with Darwin Each industry moves along a life cycle, with different opportunities for competitive advantage at each stage CHANGING BUSINESS MODELS Innovative business models are developed towards the end of the maturity phase Introduction Growth Maturity Decline TOTAL INDUSTRY REVENUE TIME DISRUPTOR ENTERS MARKET SHARE, REVENUE & COST BECOME KEY PRODUCT INNOVATION REDUCES PROCESS INNOVATION BEGINS PRODUCT LEADERSHIP CUSTOMER INTIMACY OPERATIONAL EXCELLENCE V A L U E D I S C I P L I N E O R I E N T A T I O N T H R O U G H T H E I N D U S T R Y L I F E C Y C L E Business Model Transition
  • 36. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 39 THE COMPLEXITY OF BUSINESS MODEL DESIGN HAS INCREASED Leading and Best Practice Research, 2011/2012 Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries
  • 37. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 40 NON-CORE CAPABILITY (MEET) The goal is to meet market standards, exploitation and reliability Produce consistent, predictable outcomes Focus on effectiveness and efficiency CORE COMPETING CAPABILITY (COMPETE) The goal is competitive parity Focus on innovation and efficiency CORE DIFFERENTIATING CAPABILITY (BEAT) The goal is competitive advantage, exploration & validity Focus on innovation and efficiency Produce outcomes that meet an objective FROM THE BUSINESS MODEL TO THE CAPABILITY RESOURCES A reliable system will produce the same test results every time A valid system will produce a result that is shown, through the passage of time, to be correct C O S T V A L U E 5% 15% 80% Leading and best practice research, 2011/2012 THE ENVIRONMENT BUSINESS MODEL Revenue Model Value Model Product & Service Model Performance Model Cost Model Operating model Differentiating Capability Non-Core Capability Competing Capability
  • 38. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 41 UNDERSTANDING THE ENGINE TO PRODUCE THE BUSINESS FIT The operating model delivers the infrastructure required to deliver the products and services to the customer segments Aligning what is valuable to the customer and what is value to the business is referred to as the business fit. This means that the engine delivers both aspects and is the ideal mix an organization needs to engineer for. THE ENVIRONMENT BUSINESS MODEL 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 PRODUCTS & SERVICES MODEL
  • 39. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 42 LINKING MARKET MODELS TO PRODUCT AND SERVICE MODELS T H E V A L U E & V A L U A B L E I N T E G R AT I O N Products and Services Valuable to the Customer PRODUCT N PRODUCT I PRODUCT TPRODUCT Y PRODUCT K SERVICE DSERVICE N SERVICE H SERVICE P PRODUCT B SERVICE N SERVICE T PRODUCT S SERVICE A PRODUCT X PRODUCT H SERVICE O PRODUCT N PRODUCT ESERVICE C SERVICE Q SERVICE N SERVICE T SERVICE B Customer Outcome CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC Establishing my account is quick and simple… Integration is quick and easy, with the right help available Efficient, with choices that make it convenient I know when the shipment will arrive I can find out whether my shipments were delivered; I get a meaningful resolution to my problem “I want to set-up my account” “I want to get ready to send my products” “I want to send a shipment” “I need to know when my shipment will arrive” “I want confirmation that my shipments have arrived” “Something has gone wrong with my delivery…” % of accounts set-up in <X hours % of accounts that utilise more than X % of orders with no manual intervention % of articles with at least 4 scans Service Delivery Performance Metric # of complaints per million products RESEARCH EVALUATE PURCHASE USE INTEGRATE SERVE Value to the Business
  • 40. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 43 CUSTOMER BEHAVIOUR: UNDERSTAND THE EMOTIONAL ROLLER COASTER OF YOUR CUSTOMERS Incremental, significant or transformation changes required to improve the experience
  • 41. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 44 BUSINESS BEHAVIOUR MEETS CUSTOMER BEHAVIOUR What Value Maps are now required to address the sub-optimal customer experience What are the value maps required to deliver this outcome
  • 42. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 45 FOUR LEVELS OF MIXING AT THE CAPABILITY LEVEL Its at this point that business begins to see the true value of using capabilities 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 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
  • 43. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 46 BUSINESS MODEL EVALUATION Business model options are evaluated against value drivers or business model mechanics to determine shortlists
  • 44. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 47 ARCHITECTURE DELIVERY MODELS E VA LUAT I O N O F S T R AT E G I C B U S I N E S S O P T I O N S The capability mixes are evaluated against each scenario to determine the optimal path going forward REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS. Business Models Value Streams
  • 45. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 48 UNDERSTANDING VALUE, PERFORMANCE AND MOTIVATION Mission Strategies Tactics Vision Goals Objectives OUTCOME C A P A B I L I T Y People Process Technology Information Business Model Value Chain Capabilities Performance Model Value Model ENDMEANS HOW What comes first?
  • 46. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 49 ONE SIZE DOES NOT FIT ALL Christensen, Clayton M. (2010-09-06). Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns Different problems required different organization structure responses
  • 47. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 50 SEQUENCING THE PROCESS ABSTRACT CONCRETE PROBLEM SOLUTION Understanding the problem from a human centred perspective Prototyping and testing for disruptive options Understanding the problem through drivers, pressures, environment and working out motivation Developing operating models and solutions TRANSFORMATION FOCUSSED Problem Motivation Business Model DISRUPTION FOCUSSED Problem MotivationBusiness Model Where to start?
  • 48. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 51 “ARCHITECTURE THINKING” M O T I VA T I O N M O D E L B U S I NE S S M O D E L S E R VI C E M O D E L C A P A B I LI T Y M O D E L Peo pl e R O A D M A P GO VE R NA NC E * Closed feedback loop to Motivation Model Vision Strategy Blueprinting Roadmapping Governance In f o r m at i o n T echn o l o gy Pr o ces s Design Thinking: Empathise, Define, Ideate, Prototype, Test M A R KE T M O D E L MEANS ASSESSMENT INFLUENCERS ASSESSMENT MEANS ENDS MACRO ENVIRONMENT INDUSTRY SCAN SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term)
  • 49. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 52 S O C I A L I S E W I T H B U S I N E S S , L I N K E I M E F F E C T I V E N E S S T O B U S I N E S S G O A L S A N D R I S K , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R LINKING INFORMATION CAPABILITY ROADMAP TO BUSINESS CAPABILITY, RISK AND MOTIVATION Understand business motivation with respect to information management Identify the critical business capabilities to support the strategies Define roadmap – prioritised to support timely delivery of EIM capability linked to business need 1 2 3Understand changing needs for a digital business Identify the information risk appetite and risks Assess how application strategies are impacted by low EIM capability maturity Identify the EIM capabilities materially impacting business capability and information risk – pertinent to the business motivation 4 6 7 8 9 Measure and monitor performance 5 Assess how business capability effectiveness is materially impacted by low EIM capability maturity MOTIVATION MODEL BUSINESS CAPABILITIES IM ROADMAP GOVERNANCE * Closed feedback loop to Motivation Model Information Process MEANS ASSESSMENT INFLUENCERS ASSESSMENT MEANS ENDS MACRO ENVIRONMENT INDUSTRY SCAN SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term) 1 2 3 4 6 8 7 Information Risk Digital Requirements 9 APPLICATIONS 5
  • 50. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 53 S O C I A L I S E , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R CLOUD STRATEGY & ROADMAPPING JOURNEY Understand the motivation for Cloud Understand the risk appetite of the business and the risk profile of the offering Obtain consensus, support and commitment 1 2 3Understand business requirements for Cloud Identify and classify assets going into the Cloud Assess the Cloud service offerings Define the roadmap 4 5 6 7 8 Measure and monitor performance 7 MOTIVATION MODEL CLOUD SERVICE OFFERINGS CAPABILITY MODEL ROADMAP GOVERNANCE * Closed feedback loop to Motivation Model Information Technology Process MEANS ASSESSMENT INFLUENCERS ASSESSMENT MEANS ENDS MACRO ENVIRONMENT INDUSTRY SCAN SWOT PERFORMANCE • Financial • Customer • Internal (current) • Internal (long-term) 1 2 3 4 5 6 Information & Risk CLOUD REQUIREMENTS 8 APPLICATIONS
  • 51. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 54 HUMAN CENTRED SERVICE AND CAPABILITY DEVELOPMENT R O LE S & O P . M O D E L C A P A B I LI T Y M O D E L R O A D M A P GO VE R NA NC E * Closed feedback loop to Motivation Model MEANS ASSESSMENT M O T I VA T I O N M O D E L INFLUENCERS ASSESSMENT MEANS ENDS S E R VI C E M O D E L / C A T A LO GU E WHAT WHY C O M M U NI C A T I O N E NGA GE M E NT M O D E L D E M A ND A NA LYS I S S O U R C I NG BUSINESS CONTEXT HOW WHO WHERE WHEN C A P A B I LI T Y A S S E S S M E NT B U S I NE S S M O D E L C U S T O M E R P E R S O N A S V A L U E P R O P E M P A T H Y M A P S C U R R E NT F U T U R E S E R VI C E D E S I GN P R O C E S S E NA B LE S
  • 52. B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 55 THE BUSINESS OF ARCHITECTURE ROADMAP ROLES & OP. MODEL GOVERNANCE * Closed feedback loop to Motivation Model MEANS ASSESSMENT SERVICE MODEL / CATALOGUE COMMUNICATION ENGAGEMENT MODEL DEMAND ANALYSIS SOURCING CAPABILITY ASSESSMENT MOTIVATION MODEL INFLUENCERS ASSESSMENT MEANS ENDS BUSINESS MODEL CAPABILITY MODEL BUSINESS CONTEXT Where When Who How Why What Enables MANDATE SERVICE CO-DESIGN CURRENT FUTURE
  • 53. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 56 ABOUT EA zero PEOPLE TRAINED THIS YEAR V E N D O R A L I G N M E N T MORE THAN 4500 PEOPLE TRAINED IN ARCHITECTURE PRACTICES (AND RISING) 13YEARS IN BUSINESS 8GLOBAL OFFICES 4500 MORE THAN 10,000 DAYS OF STRATEGY & ARCHITECTURE SERVICES DELIVERED LAST YEAR 10,000 oneCOMMON METHOD 1000+ fiveCONTINENTS WITH TRAINING OPTIONS
  • 54. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 57 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
  • 55. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 58 QUESTIONS?
  • 56. C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 59enterprisearchitects.com