Search Results for: business model

Last week I explained why embracing organizational change is important.  This week I will talk about Enterprise Architecture frameworks and whether or not they matter.
What is an Enterprise Architecture framework?
An Enterprise Architecture framewor…

The 24 satellites that make up the global positioning system (GPS) space segment are orbiting the earth about 12,000 miles above us. Traveling at speeds of roughly 7,000 miles an hour, they are in constant movement, making two complete orbits every 24 hours. Military, civilians and commercial industries worldwide depend on the GPS system for location and time information every day. A GPS is an effective tool used by many to help save time and money and reduce daily stresses. When used correctly, a GPS can help its end users find the most direct route to their destination while delivering decision-making information that helps avoid time consuming obstacles such as road construction and traffic. Now imagine a GPS navigation system specifically designed for CIOs. One that could provide CIOs with the information they need to successfully steer IT and business together. Sound too good to be true? Navigation systems for CIOs already exist in the form Enterprise Portfolio Management (EPM).

Like a GPS satellite, a CIO must maintain a very precise orbit around their environment to maintain crucial insight into their entire organization to navigate current challenges and architect a future-proof infrastructure. However, GPS satellites are built to last ten years, while a CIO’s average tenure is only four years. How can a CIO successfully steer an organization and extend their tenure? An EPM solution can provide CIOs with a 360 degree view of the IT landscape in the context of the business, providing them with the information they need to synchronize IT with business goals in real-time. 

Everyone knows that the first step in operating a GPS device is plugging in the destination. Many organizations undertake enterprise architecture (EA) initiatives with the vague destination of “aligning the business with IT” in mind. Without defining specific business questions to answer or outcomes to achieve, a program can get bogged down in activity that does not drive EA initiatives in a direction that supports corporate goals. To determine the best route, a CIO needs a clear picture of the landscape as it exists.

An EPM solution provides a powerful and interactive analysis engine that supports a library of preconfigured visualizations to help decision makers quickly analyze and identify risk areas, as well as opportunities for cost savings and investment re-alignment. Without a set of rich analytics that represent the current state of organizations, processes, information, technologies and their relationships, the EA program will not have the roadmap it needs to reach the destination.

GPS accuracy depends on a number of variables, most notably signal to noise ratio, satellite position, weather and obstructions such as buildings and mountains. Businesses are often challenged to capture the structure and dynamics of the enterprise due to obstructions such as siloed information existing in disparate repositories such as Excel, Visio or even PowerPoint. An EPM solution provides the CIO with a comprehensive, advanced report creation environment, which delivers a collection of standard reports that answer critical business questions. These reports provide a comprehensive view of the IT landscape in the context of the business. Further, built-in data stewardship capabilities support the ability to federate the management and maintenance of information assets on both an organizational and individual level. A CIO can browse, search, edit and report against data stored in a centralized repository.

With a clear picture of an enterprise’s entire IT portfolio, a CIO can then leverage a comprehensive EPM solution to provide a visual modeling environment which enables decision-makers to create models and quickly understand the connections and dependencies between different types of enterprise portfolio elements. With rich visual models that represent the current state of organizations, processes, information, technologies and their relationships, a CIO can perform scenario-based alternative analysis to understand how each decision can impact the organization, allowing the company to link actions to business goals.

A GPS helps users reach their destinations by providing them with up-to-date, relevant information. When it comes to defining and implementing a strategy to connect the enterprise, an EPM solution can do the same for a CIO.  Businesses have always had tremendous decision-making challenges due to the lack of complete, accurate and timely information. With a solid Enterprise Portfolio Management strategy, enterprises can gain clear line-of-sight and instantly see how current and future technology strategy decisions impact an organization before they are implemented. Businesses can make more informed decisions that synchronize IT with business goals leading to reduced costs, decreased risk and increased agility. Capturing and managing information in the context of these portfolios is a critical component in providing visibility and synchronization between business and IT investments.

In part 12 of “Memoirs of an Enterprise Architect” I discussed the IT Chargeback Model.  This week I will talk about Database Rationalization.
Does your organization have a good process around managing all of the databases running your business?
I…

In conversations with customers and prospects we sometimes find they are struggling with the right starting point to bring a business architecture focus to their EPM program. Should they start with a business capability approach or a business process approach? This sounds like the “chicken or egg” dilemma — which comes first? Much like the chicken and the egg it isn’t an either/or situation, you will have to have both, and much more, for a successful program. That said, the “which comes first” question is probably the wrong question; we should be asking what outcome are you looking for? If the outcome is tactical such as improving a specific process then you might want to start with understanding that process and where it fits in the value chain. Alternatively if the enterprise is looking to the greater value you will likely need to take a different and more considered approach.

Strategy to Execution.
There are a multitude of benefits to a business architecture program, but certainly one of the most important is to improve “strategy to execution”. In fact, a Harvard Business Review survey of 1000 companies reported that only 37% thought they were “very good” or “excellent” at execution. If this is the objective then you will first have to start with understanding the strategy. One of the best approaches to understanding strategy is to understand how strategy affects the business. Since business capabilities are a common and very useful abstraction of what the business does they are an excellent starting place to begin the work of linking strategy across the set of enterprise portfolios. Using business capabilities as a common foundation for assessing enterprise performance it will be possible to create an investment roadmap that improves alignment and execution.

But What about Business Processes?
Business capabilities create the context for strategic planning, but that is not the end of the story by any means. Whereas business capabilities define what the business does, it is business processes that define how the business executes. Business processes and their assembly into value chains provide important baseline performance information for assessment of business capabilities. This baseline information can be compared to industry benchmarks and future state targets to highlight investment needs and possibly even the need for creation of new capabilities. Furthermore, there has been a proliferation of Business Process Management Suites (BPMS) across the enterprise. These suites enable the modeling, simulation, execution and monitoring of processes. When integrated with an enterprise portfolio management system they can provide ongoing measurements— but given the departmental nature of their usage they likely will not give a complete picture of the process landscape across the enterprise. In most cases performance information will require both automatic and manual assessments (see our Case Study: Capabilities-Based Planning at Fidelity Investments). In fact, in many instances manual subjective performance assessments are “good enough” to start driving real business value.

A Complete Picture.
An assessment of the business capabilities’ performance sheds light on the high priority investment areas but to get a complete picture you will need to understand how the other enterprise portfolios support those capabilities. A complete picture would include how the application, information, and technology portfolios impact the investment plan. Only then can you be sure that not only are doing the right things, but also doing them right (see our blog ‘Doing the Right Thing vs. Doing Things Right’).

Learn more:
Surveys indicate that both BPM and EA are top of mind with today’s CIO’s This comes as no surprise as CIO looks to the EA team to lead strategy development and they look to modern BPM suites to deliver those transformations. Unfortunately in the real world there are gaps in the “strategy to execution“ of a transformation. Our upcoming expert brief will discuss how to leverage the integration of BPM into your EPM program to deliver improved business transformation and identify gaps and redundancies in your Enterprise Portfolios.