Unlocking the Silos: The Power of Business Capabilities€¦ · · 2013-11-15The Power of Business Capabilities Tim Westbrock Managing Director November 13, ... Develop a Capability

© EAdirections 2013. All Rights Reserved.

Unlocking the Silos: The Power of Business Capabilities

Tim Westbrock Managing Director

November 13, 2013

Buidling Business Capability Conference


What are we talking about today?

•  Challenges of ENTERPRISE Architecture •  True Enterprise Architecture: The evolution of EA

perspectives from Traditional to Transitional to Transformative

•  Introduce you to the concept of “business capabilities” –  What are business capabilities? –  How do you get started with business capabilities? –  How are organizations using business capabilities for planning and

decision making?

2

© EAdirections 2013. All Rights Reserved. 3

Our Premise

EA is NOT really Enterprise Architecture the way it is practiced in 90+% of organizations.

It is IT architecture.

What is missing?

Business-Owned

Enterprise Business Architecture and Enterprise Information (not Data) Architecture


Drivers for EA

•  Business change / transformation / innovation –  Intentional and unintentional –  Many environmental factors (gov/reg, eco, tech, demo, geo,

political, etc.) •  Leveraging new technology capabilities

–  Virtualization , Proliferation of devices, Tech-tonics, Everything is Recorded Digitally, Predictive Modeling Explodes, “Zero Downtime”, Self-service “Everything”, 7x24 work availability, Ubiquitous “real-time” sensors, …

•  Unwieldy / unmanageable, overly complex (and changing) IT environment is an obstacle to rapid change –  Lack of standards, lack of reuse and reusability, p2p interfacing,

old/obsolete technologies

4


Traditional View & Transitional View

5

Enterprise Architecture

Business Arch

Information Arch

Application Arch

Technology Arch

5


Business Arch

Application Arch

Information Arch

Technology Arch


•  EA reflects the breadth of the enterprise strategy

•  Includes BOTH Business and IT domains

•  Business and IT domains are intimately inter-related

•  Viewed “as one” the enterprise architecture must reflect the vision of the owners

6


IT Domain

Business Domain

Business Operations

Business Information

Application

Technology

Data

Strategy “drives” EA

True-EA (Transformational View)


Big Challenges

•  Getting business participation in and ownership of enterprise business and information architecture

•  Getting business leadership to understand the complexity and implications of redundant solutions and information and lack of adequate integration

•  Defining the business in ways that cut across the existing organizational and functional silos that exist in most enterprises

•  Presenting a truly business oriented enterprise view that resonates with executive leadership

7


What are Capabilities?

•  An encapsulation of all the relevant attributes, including people, process, and technology, that the business relies on for a specific purpose or outcome - Microsoft

•  An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve – The Open Group

•  The combination of process, organization, people, information and technology that an enterprise uses to generate business outcomes – PwC

•  A way to break down your organization’s business operations without dependence on:

–  Already defined business processes –  Organizational Structure –  Lines of Business

•  A language to describe “What” the business does •  A Hierarchy that allows you to organize/prioritize business architecture,

business analysis, strategy implication efforts

8


Differentiating….

•  Business capability is the expression or the articulation of the capacity, materials and expertise an organization needs in order to perform core functions.

–  Fulfill Order: Provide ordered products to customers as soon as possible •  Business processes describe the methods an organization employs in

order to provide and leverage business capabilities. –  Inventory Control –  Order Picking –  Invoicing

•  Business functions describes the roles that individuals and units within the business play in regards to meeting business objectives.

–  Accounting –  Customer Service –  Logistics

•  In short, this suggests that capabilities are delivered through processes being performed by different functions of an organization.

9

Source: http://searchsoa.techtarget.com/definition/business-capability


Why Capabilities instead of Processes

•  Keeps the discussion focused on “What” not “How” •  Capabilities help to identify the source of strategic

differentiation vs. commodity or non-core investments •  Capabilities enable a view for Componentizing

–  Not just functional, but also informational, reuse •  They facilitate modeling of the “as is” & “to be” •  Provide a common language •  Many business process models assume or continue

existing silo views of the enterprise

10


Getting Started with Capabilities

•  Select/Design a Model Paradigm –  Ex: Develop a Capability Hierarchy (Model)

•  Model Capabilities at Level 0 –  Gain acceptance with/from business executive level

•  Breakdown Capabilities to next level or two •  Define the term “Business Capabilities”

–  Identify where they fit in your EA Metamodel •  Map against other elements

–  Business Services –  Value Streams, Information, Organization, Solutions –  Provides more context and decision support

•  Refine with the help of Business Analysts •  Identify What Problems these Models can Help? •  Identify What Decisions these Models can Help? •  Present to Decision Makers

11


Verb or Noun?

•  Interesting question…

•  Too early for a definitive answer, IMHO

•  Verb – Capability suggests an action

•  Noun – Keeps you focused on the What, not the How

•  The debate will continue, but my opinion…

12


General Purpose Business Capabilities

Industry Specific Capabilities

Company Specific Capabilities

Capability 5

Capability 4

Capability 3

Capability 1

Invest Revenue

Collect Revenue

Acquire Resources

Collect Usage Information

Manage Corporation

Invoice Resources Consumers

Capability 6

Conserve Energy

Research, Innovation

Unit 3

Unit 2

Capability 2

Unit 1

Transmit Resources

Develop Corporate Plans Develop Business Strategy

Market Offerings

Maintain Health & Safety

Manage Stakeholder Relations

Sell Offerings

Manage Supply Chain Develop Business

Manage Portfolio Manage Asset Operate Business

Manage Project

Engineer Product

Comply With Regulations Communicate

Develop Business Intelligence

Protect Coprporation

Manage Corporate Finance

Provide Information

Manage Human

Resources

Administer Corporation

Manage Risk

Audit Corporation

Manage Information

Sell Resources

Manage Customer Relationships

Example Business Capability Framework

Distribute Resources


Capability Heat Map

14

Source: http://msdn.microsoft.com/en-us/architecture/aa902621.Art04Fig05(l=en-us).jpg


Mapping the Application Systems to the Capabilities

Company ABC

High Level Capability Hierarchy

1.0 Market Product 2.0 Sell Product 3.0 Engineer

Product 4.0 Deliver Product 5.0 Finance & Administer Company

1.1

Pub

lic R

elat

ions

&

Com

mun

icat

ions

1.

2 A

dver

tisin

g &

Bra

nd

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Le

ad G

ener

atio

n 2.

1 P

rosp

ectin

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d M

anag

emen

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2.2

Qua

lific

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2.3

Sal

es P

ropo

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2.4

Sal

es N

egot

iatio

ns &

C

ontra

cts

3.1

Res

earc

h &

D

evel

opm

ent

3.2

Pro

duct

Dev

elop

men

t &

Des

ign

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s P

ayab

le

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Sys

tem

s (IT

)

5.8

Leg

al

Com

pany

AB

C's

Info

rmat

ion

Sys

tem

s

Customer Relationship Management (CRM) Leads � �

Contacts � � � � � � � � Accounts � � � � � � � � Campaigns � � �

Financial System General Ledger � � � � � � � � � � Cash Management � � � Accounts Payable � � � � Accounts Receivable � � � � Fixed Assets �

Supply Chain Management Order Entry � Purchasing � � Inventory � Forecasting � � �

Manufacturing Bill of Materials � � Scheduling � Cost Management � � � Quality Control � � � Capacity Planning �

Freight Management & Shipping

Freight Management & Shippping �

Human Resources Personnel � Payroll � � � Benefits � � � Time & Attendance �

etc.

LEGEND � System function


What do People do with Them?

•  Dialogue with Executives •  Provide communication tool for leaders •  Support Executive Planning

–  Relate strategic capabilities to the (level of) investments being made

–  Relate to other elements of the enterprise for context/impact/tradeoffs

•  Support Program/Project Portfolio Planning –  Identify programs/projects providing improved/replaced/new

capabilities •  Support Application Portfolio Management

–  Identify redundant solutions for capabilities delivered across the enterprise

•  Provide Context for Future State of Enterprise Architecture

16


Enterprise Architecture Development

Identify Business

Vision

Identify Strategic

Capabilities

Define Enterprise Principles

Determine Future State

Identify & Analyze

Gaps

Conduct Impact

Analysis

Develop Transformation

Roadmap

Enterprise Business Strategy

Transformation Roadmap

•  Initially start with “top-down” approach –  Establishes scope, provides structure to

create “enterprise context” •  Understand Mission/Vision, environmental

factors, strategies •  Examination linkages to the desired

business and operating models •  Explore the portfolio of business

capabilities •  Analyze implications of environmental

factors

Strategy to EA


Identify Strategic Capabilities

•  Goal: Identify the changes to your capabilities in order to satisfy your strategic direction

•  Conduct environmental trend analysis •  Develop a business acumen for your enterprise and its

industry •  Identify business strategy development groups and

artifacts •  Validate the most important strategies •  Ask questions about the intent of these strategies to

identify needed changes to business processes, information, technology, and solutions capabilities

•  Articulate strategic capabilities to satisfy business strategies

•  Validate strategic capabilities

18

Identify Business

Vision

Identify Strategic

Capabilities



Identify & Analyze

Gaps

Conduct Impact

Analysis


Roadmap




Capabilities – Impact on Future State

19 1.

1 P

ublic

Rel

atio

ns &

Com

mun

icat

ions

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

emen

t

2.2

Qua

lific

atio

n

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Dev

elop

men

t

3.2

Pro

duct

Dev

elop

men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al

CEO Sales & Marketing

Corporate Marketing � � �Sales ¡ � � � �National Accounts � � � �Sales Engineering � ¡

Research & Development � ¡Engineering ¡ � �Manufacturing �Operations

Procurement �Receiving � �Inventory & Shipping � �Customer Service �

Finance & AdministrationPurchasing �Accounts Receivable �Accounts Payable �Financial Management � �Human Resources �

Information Systems �General Counsel ¡ ¡ ¡ ¡ �

� Primary Responsibility¡ Secondary Responsibility

Com

pany

AB

C's

Org

aniz

atio

nal S

truct

ure

LEGEND

Company ABC

High Level Functional Hierarchy

4.0 Operations 5.0 Finance & Administration3.0 Engineering1.0 Marketing 2.0 Sales

EBA

1.1

Pub

lic R

elat

ions

& C

omm

unica

tions

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

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t

2.2

Qua

lifica

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2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

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ns &

Con

tract

s

3.1

Res

earc

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Deve

lopm

ent

3.2

Pro

duct

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t & D

esig

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3.3

Pro

duct

Eng

inee

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4.1

Pro

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4.2

Man

ufac

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4.3

Inve

ntor

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4.4

Shi

ppin

g

4.5

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er S

ervic

e

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s Re

cieva

ble

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

ancia

l Rep

ortin

g

5.5

Inte

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Aud

it

5.6

Hum

an R

esou

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5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al








Com

pany

ABC

's O

rgan

izatio

nal S

truct

ure

LEGEND

Company ABC



ETA

Ship CM

Lead

s

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acts

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paign

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Gen

eral

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Plan

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onne

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oll

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fits

Tim

e &

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Cont

ent M

anag

emen

t

Prospect InformationProspect Contact Information ² ²Prospect Credit ²

Customer InformationCustomer Contact Information ² � � �Customer Credit ²Customer History ²

Product InformationProduct Descriptions ¡ � � ²Product Specifications � � � ²Product Pricing � � ²

InventoryProduct Inventory � � � ² � � �Component Inventory � � � ² � � �Repair Parts � � � ² � � �

OrdersCustomer Order � ² � ¡ ¡Customer Invoice ¡ ²

ShippingShipping Notice ²

Product ReturnsReturn Information � � ²

etc.etc.etc.

² Authoritative Source ('Corporate Record') � Primary user of information artifact ¡ Secondary user of information artifact

LEGEND

Com

pany

ABC

's Hi

gh L

evel

Info

rmat

ion A

rtifa

cts

High Level View of Information Systems

Company ABC

CRM Financial System Supply Chain Human ResourcesManufacturing

EIA

1.1

Pub

lic R

elat

ions

& C

omm

unica

tions

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

emen

t

2.2

Qua

lifica

tion

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Deve

lopm

ent

3.2

Pro

duct

Dev

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men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervic

e

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s Re

cieva

ble

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

ancia

l Rep

ortin

g

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al


Contacts � � � � � � � �Accounts � � � � � � � �Campaigns � � �

Financial SystemGeneral Ledger � � � � � � � � � �Cash Management � � �Accounts Payable � � � �Accounts Receivable � � � �Fixed Assets �

Supply Chain ManagementOrder Entry �Purchasing � �Inventory �Forecasting � � �

ManufacturingBill of Materials � �Scheduling �Cost Management � � �Quality Control � � �Capacity Planning �

Freight Management & ShippingFreight Management & Shippping �

Human ResourcesPersonnel �Payroll � � �Benefits � � �Time & Attendance �

Content ManagentContent Management � � � � � � � � � � � �

etc.etc.etc.

� System function

Com

pany

ABC

's In

form

atio

n Sy

stem

s

LEGEND

Company ABC



EAA

Business Capability Changes •  to functional hierarchy •  to org structure •  to business processes

Information Capability Changes •  to information entities •  to application portfolio

Technology Capability Changes •  to technology catalog

Solution Capability Changes •  to application portfolio


Bringing it all Together

20

1.1

Pub

lic R

elat

ions

& C

omm

unic

atio

ns

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

emen

t

2.2

Qua

lific

atio

n

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Dev

elop

men

t

3.2

Pro

duct

Dev

elop

men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al








Com

pany

AB

C's

Org

aniz

atio

nal S

truct

ure

LEGEND

Company ABC



EBA

1.1

Pub

lic R

elat

ions

& C

omm

unica

tions

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

emen

t

2.2

Qua

lifica

tion

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

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ns &

Con

tract

s

3.1

Res

earc

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Deve

lopm

ent

3.2

Pro

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Dev

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esig

n

3.3

Pro

duct

Eng

inee

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4.1

Pro

cure

men

t

4.2

Man

ufac

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g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

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ervic

e

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s Re

cieva

ble

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

ancia

l Rep

ortin

g

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al








Com

pany

ABC

's O

rgan

izatio

nal S

truct

ure

LEGEND

Company ABC



ETA

Ship CM

Lead

s

Cont

acts

Acco

unts

Cam

paign

s

Gen

eral

Ledg

er

Cash

Man

agem

ent

Acco

unts

Paya

ble

Acco

unts

Rece

ivable

Fixe

d As

sets

Ord

er E

ntry

Purc

hasin

g

Inve

ntor

y

Fore

casti

ng

Bill o

f Mat

erial

s

Sche

dulin

g

Cost

Man

agem

ent

Qua

lity C

ontro

l

Capa

city

Plan

ning

Freig

ht M

anag

emen

t & S

hippin

g

Pers

onne

l

Payr

oll

Bene

fits

Tim

e &

Atte

ndan

ce

Cont

ent M

anag

emen

t

Prospect InformationProspect Contact Information ² ²Prospect Credit ²

Customer InformationCustomer Contact Information ² � � �Customer Credit ²Customer History ²

Product InformationProduct Descriptions ¡ � � ²Product Specifications � � � ²Product Pricing � � ²

InventoryProduct Inventory � � � ² � � �Component Inventory � � � ² � � �Repair Parts � � � ² � � �

OrdersCustomer Order � ² � ¡ ¡Customer Invoice ¡ ²

ShippingShipping Notice ²

Product ReturnsReturn Information � � ²

etc.etc.etc.

² Authoritative Source ('Corporate Record') � Primary user of information artifact ¡ Secondary user of information artifact

LEGEND

Com

pany

ABC

's Hi

gh L

evel

Info

rmat

ion A

rtifa

cts

High Level View of Information Systems

Company ABC

CRM Financial System Supply Chain Human ResourcesManufacturing

EIA

1.1

Pub

lic R

elat

ions

& C

omm

unica

tions

1.2

Adv

ertis

ing

& Br

and

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& Le

ad M

anag

emen

t

2.2

Qua

lifica

tion

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Deve

lopm

ent

3.2

Pro

duct

Dev

elop

men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervic

e

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s Re

cieva

ble

5.3

Acc

ount

s Pa

yabl

e

5.4

Fin

ancia

l Rep

ortin

g

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Syst

ems

(IT)

5.8

Leg

al


Contacts � � � � � � � �Accounts � � � � � � � �Campaigns � � �

Financial SystemGeneral Ledger � � � � � � � � � �Cash Management � � �Accounts Payable � � � �Accounts Receivable � � � �Fixed Assets �

Supply Chain ManagementOrder Entry �Purchasing � �Inventory �Forecasting � � �

ManufacturingBill of Materials � �Scheduling �Cost Management � � �Quality Control � � �Capacity Planning �

Freight Management & ShippingFreight Management & Shippping �

Human ResourcesPersonnel �Payroll � � �Benefits � � �Time & Attendance �

Content ManagentContent Management � � � � � � � � � � � �

etc.etc.etc.

� System function

Com

pany

ABC

's In

form

atio

n Sy

stem

s

LEGEND

Company ABC



EAA

•  New / Changed Processes & Functions •  New / Changed Channels & Partnerships •  New / Changed Products & Services •  New / Changed Roles & Organization

•  New / Changed Information Entities •  New / Changed Information Sources and Consumers •  New / Changed Information Flows •  Info / Data Management Policies and Data Standards •  Data Services Portfolio

•  New / Changed Infrastructure Components (Standards) •  New / Changed Infrastructure Configurations & Patterns •  New / Changed Infrastructure Lifecycle •  Change Management Policies •  Infrastructure Services Portfolio

•  New / Changed Solution Portfolio •  New / Changed Application Integration Approaches •  New / Changed Application Patterns & Frameworks •  Application Services Portfolio


The Portfolio Processes


Project Portfolio

Management

Enterprise Strategy and

Planning

THE MANAGED PORTFOLIO

Environment Analysis

Business Visioning

Strategy Formulation

Business Strategic

Alignment

Transformation

Future State Creation

Current State Identification

Lifecycles

Gap Analysis

Investment

Prioritization and Risk Analysis

Resourcing

Scheduling

Project Management

Roadmaps



About EAdirections

23

Tim Westbrock

George S. Paras

We Work WITH You To: •  Improve the value of IT to your enterprise •  Improve Enterprise Architecture (EA) programs •  Refine/Tune Governance Mechanisms •  Create a Portfolio-Based Culture •  Integrate Management Disciplines •  Unify Business/IT Perspectives •  Operate a World-Class Office of the CIO •  Balance the Strategic with the Tactical

How We Do It: •  Continuous Mentoring of IT Leaders

•  CIO, EA Team, PMO, Office of the CIO, etc. •  Assess Org Structures, People, Teams •  Build Internal Support and Sponsorship •  Analyze and Drive Activity Plans •  Review and Improve Processes & Deliverables •  Contribute Relevant Examples & Research •  Provide Pragmatic, Objective, Unbiased and

Prescriptive Feedback on Everything You Do Subscribe to our Newsletter: http://eepurl.com/bQ4_ www.EAdirections.com


Enterprise Architecture Development (HL)

Identify Business

Vision

Identify Strategic

Capabilities



Identify & Analyze

Gaps

Conduct Impact

Analysis


Roadmap



•  Identify Strategic Capabilities –  Understand business strategy –  Decompose into more specific, applicable

language •  Identify the capabilities that are required to

support enterprise business strategies –  Models Help!

•  Principle-Based •  Future State Definition

–  Standards/Guidelines/Rules –  Models – of all types, contexts, scope,

audience and depth •  Comparison to Current State •  Linkage to Project Portfolio •  Lifecycle, Evolutionary


EA and Strategy

•  Bridging the gap between Business Strategy and everyday activities is imperative to the value of EA

•  Lack of well-planned, articulated business strategy can be overcome in the short term with a variety of techniques

–  Gathering annual reports, BofD meeting presentations, and other material from the executives; LoB strategies

–  Developing relationships with strategic planners, leveraging existing relationships that exist in IT

–  Conducting industry research –  What else?

•  Long-term success (of an enterprise, not just EA) through transformation requires not only business strategy, but also the analysis and the articulation of the required changes to the enterprise’s capabilities to achieve the strategy

–  Business Capabilities –  Business Information Capabilities –  Information Technology (Infrastructure) Capabilities –  Business Solutions Capabilities


What is the Strategic Capabilities Analysis?

•  An activity / deliverable for discussing, capturing, and documenting:

–  Set of enterprise business strategies –  Set of strategic business capabilities

derived from ENTERPRISE business strategies and the operating model of the ENTERPRISE

•  Ask questions about the intent of these strategies to identify needed changes to business processes, information, technology, and solutions capabilities

•  Also a “straw man” document to generate strategic discussions

26

Environmental Trends

Enterprise Business

Strategies

Business Capabilities

Information Capabilities

Technology Capabilities

Solutions Capabilities

SCC Hierarchy


Why Does the set of SCC’s Help With the Problem?

•  Identify, discuss, and document strategies –  Question the meaning and implications

of each –  Analyze the compatibility –  Highlight the inconsistencies –  Clarify the confusion

•  Go deeper than the strategies •  Articulate what is NEEDED!

Create a common forum of discussion on matters of strategic futures

Intended Outcomes

  Business and IT leadership collaborate on business and IT planning

  IT is planned and executed holistically, end-to-end, to support business needs and application changes

  Infrastructure and application life cycles are tightly linked with business process life cycles

  We save time and money and reduce risk through repeatable, reusable solutions that are developed and applied to similar problems

  Business value takes precedence over product centricity


How Do You Go About Creating and Validating the SCC?

•  Conduct environmental trend analysis •  Develop a business acumen for your

enterprise and its industry •  Identify business strategy development

groups and artifacts •  Validate the most important strategies •  Ask questions about the intent of these

strategies to identify needed changes to business processes, information, technology, and solutions capabilities

•  Articulate strategic capabilities to satisfy business strategies

•  Validate strategic capabilities

The discussion of strategies and related capabilities will be very enlightening

ICC BCC

TCC

SCC


Who Is Involved in the SCC Activity?

•  Senior executives/corporate leadership •  Business strategy planners/teams •  Line-of-business (LOB) management •  IT leadership •  LOB/IT liaisons •  IT business relationship managers

The right participation provides a sense of ownership and credibility to the process

Architecture Team Architecture

Review Board

Executive Steering

Committee

Core EA Team

Architecture Review Board

EA Modeling

Teams


Business Capabilities Changes (BCC)

•  Articulate the impact of strategy on business operations

•  Answer the following questions: To support our enterprise business strategies …

–  What business processes changes are necessary?

–  What business components must be changed/added?

–  What business stakeholders are affected and how?

–  What is the impact on the organizational structure?

–  What is the impact on our extended value network — suppliers, partners, customers, etc.?

EBS 1 EBS 2 EBS 3

BCC 1 X

BCC 2 X X

BCC 3 X X

BCC 4 X

BCC 5 X

BCC 6 X X

BCC 7 X

BCC 8 X ?

BCC 9 X


Information Capabilities Changes (ICCs)

•  Articulate the impact of strategy on business information


–  What information is needed? –  Who needs it? –  When (how often) is it needed? –  Where does it come from? –  How can information be leveraged to

provide more value to the enterprise?

BCC 1

BCC 2

BCC 3

BCC 4

BCC 5

BCC 6

BCC 7

BCC 8

BCC 9

ICC 1

ICC 2

x X X

ICC 3

X X

ICC 4

X

ICC 5

X X

ICC 6

X x X

ICC 7

x X x

ICC 8

X X

ICC 9

X

ICC 10

X


Technology Capabilities Changes (TCCs)

•  Articulate the impact of business strategies on information technology


–  What types of information must be supported?

–  What access must be provided? –  What locations must be supported with

information access? –  What sources for information must be

supported? –  What frequency of information delivery and

processing must be supported?

ICC 1

ICC 2

ICC 3

ICC 4

ICC 5

ICC 6

ICC 7

ICC 8

ICC 9

ICC 10

BCC 1

BCC 2

BCC 3

BCC 4

BCC 5

BCC 6

BCC 7

BCC 8

BCC 9

TCC A

X X

TCC B

X X X X X X X X X X X X X

TCC C

X X X X X X X X X X

TCC D

X X X X X X X

TCC E

X X X X X X X X

TCC F

X X X

TCC G

X X X X X X X X X

TCC H

X X X X X X


Creating Linkage

BCC 1 BCC 2

BCC 3

BCC 4

BCC 5

BCC 6

BCC 7

BCC 8

BCC 9

ICC 1 X

ICC 2 X X X X X

ICC 3 X X X X

ICC 4 X X

ICC 5 X X X

ICC 6 X X X

ICC 7 X X X

EBS 1 EBS 2 EBS 3

BCC 1 X

BCC 2 X X

BCC 3 X X

BCC 4 X

BCC 5 X

BCC 6 X X

BCC 7 X

BCC 8 X

BCC 9 X

Trend A Trend B Trend C Trend D

EBS 1 X X

EBS 2 X

EBS 3 X

ICC 1

ICC 2

… ICC N

TCC 1 X

TCC 2 X X

TCC 3 X X

. X

. X

. X X

TCC n X

Trend = Industry or Market Trend EBS = Enterprise Business Strategy BCC = Business Capability Change

ICC = Information Capability Change TCC= Technology Capability Change SCC = Solution Capability Change


Solution Capabilities Changes (SCCs)

•  Articulate the impact of business strategy on business solutions

•  Identify BCC, ICC, and ITCC relationship patterns, and define solutions that would satisfy the related set

•  Answer the following question: To support our enterprise business strategies …

–  What types of solutions are required to satisfy / leverage related business process, information, and technology capabilities?

•  This leads to more widely applicable solutions

SCC Mapping

requires 3 matrices:

SCC > BCC SCC > ICC SCC > TCC


Defining Future State

•  For EBA –  Develop Subject Area Knowledge –  Conduct Research and Analysis –  Establish/Refine Standards &

Recommendations –  Apply strategic capability changes to

appropriate domains –  Develop / refine models – Different types,

contexts, scope, audit and depth

•  For EIA –  Develop Subject Area Knowledge –  Conduct Research and Analysis –  Establish/Refine Standards &




35

•  For ETA –  Develop Subject Area Knowledge –  Conduct Research and Analysis –  Establish/Refine Standards &


appropriate domains –  Design Configuration & Integration of

Standards –  Develop / refine models – Different types,


•  For ESA –  Develop Subject Area Knowledge –  Conduct Research and Analysis –  Establish/Refine Standards &





Mapping Organizational Structure to Capabilities

One of the first tasks is to map the current organization structure to the Capabilities. In the example below, the organizational structure is on the vertical axis. Mapping the organizational structure to the Capabilities is useful for checking the completeness of the matrix. (Note: more detailed capabilities are very useful in identifying redundant activities.)

Company ABC

High Level Capabilty Hierarchy

1.0 Market Product 2.0 Sell Product 3.0 Engineer Product 4.0 Deliver Product 5.0 Finance & Administer Company

1.1

Pub

lic R

elat

ions

& C

omm

unic

atio

ns

1.2

Adv

ertis

ing

& B

rand

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& L

ead

Man

agem

ent

2.2

Qua

lific

atio

n

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Dev

elop

men

t

3.2

Pro

duct

Dev

elop

men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s P

ayab

le

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Sys

tem

s (IT

)

5.8

Leg

al

Com

pany

AB

C's

Org

aniz

atio

nal S

truct

ure


Corporate Marketing � � � Sales ¡ � � � � National Accounts � � � � Sales Engineering � ¡

Research & Development � ¡ Engineering ¡ � � Manufacturing � Operations

Procurement � Receiving � � Inventory & Shipping � � Customer Service �

Finance & Administration Purchasing � Accounts Receivable � Accounts Payable � Financial Management � � Human Resources �

Information Systems � General Counsel ¡ ¡ ¡ ¡ �

LEGEND � Primary Responsibility ¡ Secondary Responsibility


Mapping Information Artifacts to the Capabilities

In the diagram below, the Information Artifacts are list down the left hand side and then mapped to the Capabilities. Over time some organizations refine this diagram to include information about which Capabilities can modify the Information Artifact as well as selected metrics (e.g. Number of Customer Orders, Processing Time).

Company ABC


1.0 Market Product 2.0 Sell Product 3.0 Engineer Product 4.0 Deliver Product 5.0 Finance & Administer Company

1.1

Pub

lic R

elat

ions

& C

omm

unic

atio

ns

1.2

Adv

ertis

ing

& B

rand

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Lea

d G

ener

atio

n

2.1

Pro

spec

ting

& L

ead

Man

agem

ent

2.2

Qua

lific

atio

n

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

Con

tract

s

3.1

Res

earc

h &

Dev

elop

men

t

3.2

Pro

duct

Dev

elop

men

t & D

esig

n

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s P

ayab

le

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Sys

tem

s (IT

)

5.8

Leg

al

Com

pany

AB

C's

Hig

h Le

vel I

nfor

mat

ion

Com

pone

nts Prospect Information

Prospect Contact Information ² � � � ¡ Prospect Credit ² ¡ ¡ ¡

Customer Information Customer Contact Information ² � � � � � ¡ Customer Credit ² ¡ ¡ ¡ ¡ ¡ Customer History ² ² ² ² ² ² ¡

Product Information Product Descriptions ¡ ¡ � � � ² ² � � ¡ Product Specifications ¡ ¡ ¡ ² ² ¡ ¡ ¡ ¡ ¡ Product Pricing ² � � ² � ¡

Inventory Product Inventory � � � � ² � � ² ¡ Component Inventory � � ² � � ¡ Repair Parts � � ² � � ¡

Orders Customer Order ¡ ¡ ² � � � � ¡ Customer Invoice � ¡ ² ¡

Shipping Shipping Notice ² � ¡ ¡

Product Returns Return Information ¡ � ² � ¡

etc. etc. etc.

LEGEND ² Creates information artifact � Primary user of information artifact ¡ Secondary user of information artifact


Mapping the Application Systems to the Capabilities

Company ABC


1.0 Market Product 2.0 Sell Product 3.0 Engineer

Product 4.0 Deliver Product 5.0 Finance & Administer Company

1.1

Pub

lic R

elat

ions

&

Com

mun

icat

ions

1.

2 A

dver

tisin

g &

Bra

nd

Man

agem

ent

1.3

Mar

ketin

g O

ps &

Le

ad G

ener

atio

n 2.

1 P

rosp

ectin

g &

Lea

d M

anag

emen

t

2.2

Qua

lific

atio

n

2.3

Sal

es P

ropo

sals

2.4

Sal

es N

egot

iatio

ns &

C

ontra

cts

3.1

Res

earc

h &

D

evel

opm

ent

3.2

Pro

duct

Dev

elop

men

t &

Des

ign

3.3

Pro

duct

Eng

inee

ring

4.1

Pro

cure

men

t

4.2

Man

ufac

turin

g

4.3

Inve

ntor

y

4.4

Shi

ppin

g

4.5

Cus

tom

er S

ervi

ce

4.6

Ret

urns

5.1

Pur

chas

ing

5.2

Acc

ount

s R

ecie

vabl

e

5.3

Acc

ount

s P

ayab

le

5.4

Fin

anci

al R

epor

ting

5.5

Inte

rnal

Aud

it

5.6

Hum

an R

esou

rces

5.7

Info

rmat

ion

Sys

tem

s (IT

)

5.8

Leg

al

Com

pany

AB

C's

Info

rmat

ion

Sys

tem

s


Contacts � � � � � � � � Accounts � � � � � � � � Campaigns � � �

Financial System General Ledger � � � � � � � � � � Cash Management � � � Accounts Payable � � � � Accounts Receivable � � � � Fixed Assets �

Supply Chain Management Order Entry � Purchasing � � Inventory � Forecasting � � �

Manufacturing Bill of Materials � � Scheduling � Cost Management � � � Quality Control � � � Capacity Planning �

Freight Management & Shipping

Freight Management & Shippping �

Human Resources Personnel � Payroll � � � Benefits � � � Time & Attendance �

etc.

LEGEND � System function

Documents

Unlocking the Silos: The Power of Business Capabilities€¦ · · 2013-11-15The Power of Business Capabilities Tim Westbrock Managing Director November 13, ... Develop a Capability