6 October 2016
What is an Operating Model?
The term Operating Model is a fuzzy one. What does it really mean? What is in an Operating Model?
It appears that often some consultants totally go out of their way to avoid mentioning Enterprise Architecture and instead focus solely on the term Operating Model.
This may well be a side effect of the misunderstanding of Enterprise Architecture as only concerned with IT Architecture. Or may be because those consultants want to invent new terminology to make their services sound unique?
And by Enterprise Architecture of course I don’t mean just the IT Architecture domains, but all the EA domains which now include:
- Strategy & Motivation
- Business Architecture
- Information/Data Architecture
- Application and Application Service Architecture
- Technology & Infrastructure Architecture
- Physical Architecture (I.e. Archimate 3 Physical Elements)
Why do we need an Operating Model?
- Business Model (BMC)
- Business Motivation Model (BMM)
- Wardley Model
- Strategic Map/Balanced Score Card (SMBSC)
- Business Capability Models
– The business processes that needs to be performed
Organisation and people
– The people and roles performing the processes and how they are grouped into organisation units
Locations, buildings and other assets
– The places where the work is done and the technology, infrastructure and physical equipment in those places needed to support the work
– The Information, data and applications needed to support the work
Sourcing and partners
– External entities, people and organisations outside the enterprise also performing the work
– the management processes for planning and managing the work
A secondary question that I always ask myself is why don’t Business Masters (MBA) courses teach executives and management about Enterprise Architecture?
This may indeed be the source of the fuzziness and lack of preciseness of the term Target Operating Model?
Target Enterprise Architecture Model
Strategic Architecture Domain
Business Model (BMC)
Business Motivation Model (BMM)
Strategy Map / Balanced Score Card Model
Value Chain Model
Customer (Outside In) Domain
Business Scenario Model
Customer Journey Model
Business Services (value proposition) Model
Business Events Model
Business Service Flow Model
Business Capability Model
Capability Dependency Model
Component Business Model
Governance and Compliance Domain
Business Rules Model
Organisation Structure Model
Business Locations Model
Business Roles Model
Business Process Domain
Business Process Flow (Value Streams) Model
Knowledge/ Information/ Data Domain
Business Information Flow Model
Business Information Object Model
Logical Data Object Model
Physical Message Model
Physical Data Storage Model
Application Landscape Model
Application Integration Model
EA Roadmap Model
Project Roadmap Model
Programmes and Project Portfolio Model
4 September 2016
“Situation Normal, Everything must Change” as Simon Wardley says!
Business Capability models and Capability Based Planning
Business Capability models are becoming much more common these days for planning change. A Business Capability is defined as the ability of an enterprise to do something.
A Business Capability identified from value based, business service based, outcome based and ‘Outside In’ based perspectives.
Business Capabilities are not another way of viewing the current organisation unit structure, the existing business functions, or the business processes.
Business Capabilities are instead realised by an aggregation of a subset of all the ‘Inside Out’ components, often simplified as people, processes, applications and technology.
Business Capability Models provide value by for ensuring alignment to business strategies and for planning change (See the Open Group paper on Capability-based planning – The link between Strategy and Enterprise Architecture).
Capability Model Dynamics
Business Capability Dependency models are used to map what business capabilities are dependent on other business capabilities.
Capability Increment Dependencies
Enterprise Investment Analysis
Enterprise Architecture models for the Business Environment
Dependencies between Capabilities can be connected to their multiple future versions to visualise their evolution and the choices possible. Often a future capability is only possible if another capability i.e. realised first, even if that one has little intrinsic value on its own, such as an infrastructure platform capability.
System Dynamics Models
Loops can be added to identifying Increasing loops, Decreasing loops and Balancing loops.
An example of a System Dynamics/System Thinking Influence diagram can be seen at:
Business Architecture Model
I have created this as a meta model for use with the Abacus EA Management tool.
16 July 2016
I had an interesting conversation recently about the use of Wardley maps as part of an Enterprise Architecture and Digital Transformation programme recently. I had looked at using Wardley maps some time ago but now I think it is a good time to incorporate their use into normal Enterprise Architecture/ Business Architecture work. They are a very useful addition to the bag of techniques and approaches that I recommend should be used by Enterprise Architects working on the Strategy and Business Architecture domains as well as for the IT architecture domains.
Wardley Maps are useful for understanding the dynamics of what is needed to support a user’s needs. The underlying dependencies between user needs are constantly evolving and many organisations do not recognise this when they come up with a dry list of Business Strategies, Goals and Objectives using a Business Motivation Model. A Wardley map makes strategies much clearer and contributes towards better situational awareness which is critical.
When asked about their strategy the CxOs often simply mention similar lists of ideas that they see other organisations talking about and copy. Often they don’t really understand the buzz words. For instance, what does ‘Digital’ really mean? Is doing Digital sufficient to claim an innovative advantage in the blue ocean? A situational Awareness map will help visualise the buzzwords and their relative importance. It will also allow the organisation to better understand where it can gain an advantage.
Wardley maps help to position the user needs and dependencies in a continuum from the genesis of an idea through to the commoditisation of the same idea, at the same time as creating a value chain as a directed graph and not just as a high level list of business functions. The Wardley map combines the Value chain view with an Evolution and dependency view which helps to identify where the strategies (Both Business and IT) should attack to produce a competitive advantage.
Upstream of Wardley maps, User needs can be identified from modelling Business Scenarios and Customer Journeys. It will be very likely that multiple Wardley maps will be needed.
The dependencies between user needs is similar to the dependencies that can be identified between Business Capabilities. Also the provision of Value to a customer is also the outcome of a Business capability. I can easily see a mapping between a grouping of Business Capabilities or groupings of dependencies between Business Capabilities and a a set of Wardley Maps.
Capability Increments can map to groupings within a Wardley map and dependencies between User needs can be associated with dependencies between Capability Increments.
These complementary techniques will reinforce each other and ensure the resulting EA Roadmap of Initiatives and subsequent Project roadmaps will be well designed and stay meaningful and relevant.
Obviously it is important to remember that the evolutions of user needs identified in a Wardley map are dynamic and the resulting EA roadmaps also need to be constantly kept under review, as business and IT trends evolve.
The best strategy is one that can help identify where to attack when things change.
16 July 2016
Digital strategy is not simply about marketing. It is about a better engagement with potential and existing customers. It is about the perception of the brand created with customers though close interaction via social media and close communication leading to a value proposition that can better serve their actual and future needs.
As with any business strategy, the enterprise architecture discipline is there to support the business transformation to success with a design strategy. It is useful here to remind everyone that enterprise architecture is not just another name for an enterprise wide view of the IT Architecture and the underlying infrastructure architecture
The term ‘Enterprise’ in Enterprise Architecture refers to the greater scope of the organisation which includes the Customers, contacts, stakeholders in the wider market environment which is addressed by the Digital Strategy.
Enterprise Architecture will help organisations to drive innovations and new business capabilities across their entire value chain and to better understand the digital environment in which they will be operating.
Joe Tucci, Chairman and CEO, EMC Corp.– “To stay relevant in this new, always-connected digital universe, businesses in virtually every industry are reinventing their business models for unprecedented customer access, interaction, speed, and scale.”
Using Enterprise Architecture to provide a blueprint for digital strategy
Enterprise architecture consists of the following primary architecture domains.
- Performance Architecture
- Business Architecture
- Information/Data Architecture
- Service/Application Architecture
- Infrastructure/Technical Architecture
- Business Transformation/ EA Roadmap
In addition to these usual enterprise architecture domains, I propose that further Architecture Domains are required for supporting a Digital Strategy.
|Additional Architecture Domains|
|Modelling the Customers’ own Environment, their processes, usage scenarios, customer journeys. Includes the communication channels used for communications directly to the customers and other external stakeholders.|
|Market Architecture||Modelling the outside-in view of what is happening outside the organisation boundaries in the Environment in which the enterprise does business, Social media, Competitors, Competitors Value propositions.|
|The branding, value proposition, projected identity that provides value to the customers for the lifecycle of the business. Includes generic communication to the customer and market, advertising the brand and value propositions.|
Figure 1 Enterprise Architecture for Digital Strategy
Obtain clarity on the goals, objectives and principles guiding your digital strategy Business strategy /Digital strategy
- Business motivation model
- Business Model
- Goals and objectives
Identify the environmental, industry and internal factors that are influencing the digital strategy.
- Market environment
- Modelling what the competition is doing
- Competitors and their activities
- Who else is in your space?
- How do you differentiate?
- Market trends
- Threats and opportunities
- Blue ocean
- Search topics
As usual this means developing Business Scenarios and Customers Journeys, but also modelling the customers (potential and actual) own business processes.
These models will help to understand the customer touch points with the organisation and their desired brand and product experiences.
The Customer Architecture will also include a Connection Model to understand the relationships with customers, communities, to better understand the customers own information and process flows.
A current state Connection Model will capture the Communities, External online nodes, web sites, collaboration social networks (Facebook, Twitter), mobile platforms (IOS, Android) and cloud platforms (Evernote, Google Drive, DropBox, OneDrive) where content exists and customers will go to visit. This Connections model will also include Search sites (Google),
multimedia sites (Flickr), advertising (Ad-Words), entertainment and gaming sites eCommerce sites (Amazon, eBay ), Mobile applications (from Apple Store, Google Play), Smart TV applications etc.
This is similar to a Context Diagram showing interaction between the Organisation and its Stakeholders, but in this case the organisation is not in the centre of the diagram and may not be shown at all in a current state (as-is) Connection Model. The organisation will however be shown in a target state Connection Model.
In a target state Connection model, it will be important to model how the organisations internal models will be coordinated and aligned to the Customers connection Model.
- Outside-in perspectives
- Obtain clarity on who the customer, consumer, partners are, their roles and their values.
- Business Scenarios
- Customers journeys
- Wardley Models
- Customers own processes
- Understand the customer touch points and the desired brand and product experiences
- Connect relationships with customers to better understand them over time
- Customers own information and process flow
- External online nodes, web sites, networks, platforms where content exists and customers visit
- Obtain clarity on how the organisation means to listen and respond to consumers.
- Multi-channel / Omni channel communications
- Communications flows both ways via whatever channel the customer is comfortable with
- Customers’ ideas
- Many channels and many messages
- Understanding and analysis of those messages
- Gaining customers’ attention
- Earning their trust
- Customers motivation
- How customers share content
A brand’s look and feel and tone of voice is as important as its identity, experiences and value proposition.
- Creating brand experiences
- Brand story
- Brand Strategy – Developing a creative brand strategy that is fit for purpose, up to date and distinctive is key to establishing all marketing communications.
- Who engages with your brand?
- Selling the Experience
- Understand the customer touch points and the intended brand and product experiences
- Insights about Customers – observations that trigger innovations
- Blue ocean strategies
The internal mode of the organisations Brand will need to be part of the Value Proposition model and show where the Brand messages will be projected.
- Modelling what the customers will love to buy
- Modelling how customers interact via social media
- Causal loop model (system dynamics)
- Modelling what customers are interested in.
- Mapping to the value proposition
- Minimum viable concept
- Behaviour change model
- Value and truth about the value propositions offered
- Value propositions
- Business Services
Business model canvas
Create the structure required to understand the business model required to realise your digital strategy
Create transparency and traceability across the market model, products and business services model, and the target operating model
Business capability model
- Create a view of the organisational capabilities across people, process, information and technology required to deliver the brand and product experiences.
- Capability assessment against goals and objectives
- Business Capability based Requirements
- Improve the way you manage your digital requirements
- Business Capabilities can be informed by the user needs identified by using Wardley models
Manage information from data architecture and information security through to delivering key messages to the market environment
- Content management
- Understand the content management approach and how it is enabled.
- Value of each bit of content.
- Relationship of content to value proposition
- System dynamics model (stocks and flows / cause and effect)
- System thinking
Provide clarity over decision making across the digital architecture
Business Transformation / EA roadmap
Create an understanding of the extent at which your current capabilities are able to support your digital strategy
Create clarity of the EA roadmap required to support the digital strategy
Obtain consensus, commitment and support for your digital strategy and roadmap which we believe are critical to the success of your strategy
Obtain clarity on your measures of success and identify plans to measure and monitor them
- Investment case
- Programme/Project Portfolio management
- Delivery plan
As usual if you don’t measure, then you can’t manage. However, it is surprising just how many enterprises fail to measure anything at all, including what they have done and what they plan to do.
- Define Metrics and create measures
- Critical Success factors
- Capability Maturity models
2 June 2016