Tag Archives: business transformation
In my previous blog, I talked about how a business-led approach can displace technology-led projects. Historically IT-led projects have invested significant capital while returning minimal business value. It further talks about how transformation roadmap execution is sustainable because the business is driving the effort where initiative investments are directly traceable to priority business goals.
For example, an insurance company wants to improve the overall customer experience. Mature business architecture will perform an assessment to highlight all customer touch points. It requires a detailed capability map, fully formed, customer-triggered value streams, value stream/ capability cross-mappings and stakeholder/ value stream cross-mappings. These business blueprints allow architects and analysts to pinpoint customer trigger points, customer interaction points and participating stakeholders engaged in value delivery.
One must understand that value streams and capabilities are not tied to business unit or other structural boundaries. This means that while the analysis performed in our customer experience example may have been initiated by a given business unit, the analysis may be universally applied to all business units, product lines and customer segments. Using the business architecture to provide a representative cross-business perspective requires incorporating organization mapping into the mix.
Incorporating the application architecture into the analysis and proposed solution is simply an extension of business architecture mapping that incorporates the IT architecture. Robust business architecture is readily mapped to the application architecture, highlighting enterprise software solutions that automate various capabilities, which in turn enable value delivery. Bear in mind, however, that many of the issues highlighted through a business architecture assessment may not have corresponding software deployments since significant interactions across the business tend to be manual or desktop-enabled. This opens the door to new automation opportunities and new ways to think about business design solutions.
Building and prioritizing the transformation strategy and roadmap is dramatically simplified once all business perspectives needed to enhance customer experience are fully exposed. For example, if customer service is a top priority, then that value stream becomes the number one target, with each stage prioritized based on business value and return on investment. Stakeholder mapping further refines design approaches for optimizing stakeholder engagement, particularly where work is sub-optimized and lacks automation.
Capability mapping to underlying application systems and services provides the basis for establishing a corresponding IT deployment program, where the creation and reuse of standardized services becomes a focal point. In certain cases, a comprehensive application and data architecture transformation becomes a consideration, but in all cases, any action taken will be business and not technology driven.
Once this occurs, everyone will focus on achieving the same goals, tied to the same business perspectives, regardless of the technology involved.
Transformation roadmaps in many businesses tend to have a heavy technology focus, to the point where organizations invest millions of dollars in initiatives with no clear business value. In addition, numerous tactical projects funded each year have little understanding of how or even if, they align from a business perspective. Management often fall victim to the latest technology buzzwords, while stakeholder value, business issues, and strategic considerations take a backseat. When this happens, executives who should be focused on business scenarios to improve stakeholder value fall victim to technology’s promise of the next big thing.
I recently participated in the writing and reviewing a series of whitepapers on Business-led transformation at Informatica’s Strategic Services Group. These whitepapers discusses how executives can leverage business architecture to reclaim their ability to drive a comprehensive transformation strategy and roadmap. I will try to summarize them into this blog.
Consider the nature of most initiatives found within a corporate program office. They generally focus on enhancing one system or another, or in more extreme cases a complete rebuild. The scope of work is bounded by a given system, not by the business focal point, whether that is a particular business capability, stakeholder, or value delivery perspective. These initiatives generally originate within the IT organization, not the business, and launched in response to a specific business need quickly translated into a software enhancement, rewrite, or database project. Too often, however, these projects have myopia and lack an understanding of cross-impacts to other projects, business units, stakeholders, or products. Their scope is constrained, not by a given customer or business focus, but by technology.
Business led transformation delivers a value centric perspective and provides the underlying framework for envisioning and crafting a more comprehensive solution. In some cases, this may begin with a quick fix if that is essential, but this must be accompanied by a roadmap for a more transformative solution. It provides a more comprehensive issue analysis and planning perspective because it offers business specific, business first viewpoints that enable issue analysis and resolution through business transparency.
ERP systems were a true competitive advantage 20+ years ago, but not so today. ERP systems are a tool that gave people the best view into their business, but that is when there really were only ERP systems and Databases, but today that critical data resides in so many other areas. There are several reasons why ERP systems act as a data trap: technical factors, out of date management theory, and big data trends. First, let’s talk about management theory.
There are two fundamental concepts that have been driving much of the strategic planning in modern organizations in recent decades. The idea of economies of scale is deeply embedded in our thinking. The concept was first introduced by Adam Smith in the 18th century and reinforced throughout the 20th century by contemporaries such as Bruce Henderson. In 1968 Henderson wrote “”Costs characteristically decline by 20-30% in real terms each time accumulated experience doubles.” The basic idea is that bigger is better. (more…)
Collaborative learning is essential for transforming work activities that involve a high degree of uncertainty and creativity into a lean value stream. These characteristics are common in enterprise integration initiatives due to unclear and inconsistent data definitions across multiple silos, rapidly changing requirements and lack of perfect knowledge around end-to-end processes. Traditional approaches generally end up propagating the integration hairball which is inefficient and wasteful – and certainly not Lean. You could say that these value streams are simply immature processes that lack standards and metrics, which is true, but the practitioners that are involved in the process don’t see it that way. They see themselves as highly skilled professionals solving complex unique problems and delivering customized solutions that fit like a glove. But yet, the outside observer who looks at the end-to-end process at the macro level sees patterns that are repeated over and over again and what appears to be a great deal of “reinventing the wheel.” (more…)