Search Results for: business model

By: Ben Geller, VP Marketing, Troux

Our last post introduced the concept of enterprise intelligence (EI), the CIOs answer to business intelligence (BI). EI is a relatively new concept in the world of strategic technology planning and the more we explore it, the more opportunity we see for its applicability beyond technology and into other parts of the C-suite.

This post takes a look at how change affects strategic business planning, and the role EI plays in mitigating risks in a climate driven by constant and rapid change.

Paul Boag said it best: “The problem is that the very nature of change is changing.”

Today chief strategy officers (CSO) and similar functions struggle with gaining the insight needed to make strategic decisions, because those decisions must happen quickly and the information needed to evaluate risk factors is often difficult to obtain or takes too long to aggregate. Strategic planners are often tasked with identifying and evaluating market expansion opportunities, M&As, divestments and the like, but it’s not as easy as pouring time into due diligence anymore. Nowadays, immediate attention and nearly quick decisions are required if a business wants to capitalize on fast moving market trends. The challenge for the CSO is to make decisions at the speed of the market while mitigating business risk. Doing that successfully means planning is no longer an annual exercise – it is now a continuous function and the corporate transparency EI delivers makes it possible.

A world of constant change demands enterprise intelligence

Whether it’s contemplating how to leverage game-changing disruptive technologies like social media, mobile, analytics, and cloud to develop a new business model or charting a new market expansion strategy, EI gives CSOs much needed line-of-sight across the enterprise.  From this vantage point CSOs can understand how everything works together and impacts each other – from Goals and Strategy to Business Capabilities to Applications and Technology. This means that opportunities and risks can be evaluated in the context of the entire enterprise and decision-makers become equipped with the insights they need to make business investment decisions faster and with greater confidence. As a result, EI becomes an integral part of the strategic planning process  

Changing with Change

Until now, CSOs have struggled to gain the enterprise-wide insights needed to set strategies and make key decisions at the market’s rapid pace. EI changes all that because it arms them with the decision-making information they need to have a meaningful dialogue about the business at a moments notice. The insights produced by EI tools allow CSOs to quickly and methodically maneuver the business as the market changes by delivering enterprise transparency that shows the cost, impact and benefits of change across the connected enterprise.

It’s true, change is changing. And, so are business models, technology and the competition. Doesn’t it make sense to adopt a strategic planning approach that delivers insight into the best way to anticipate and address these changes?

We think so.

Learn more about continual planning in Forrester’s white paper, Connecting The Dots: Building An Integrated Strategy And Execution Plan.

Key Takeaways include:

• Market conditions can change so rapidly that strategic direction may change by the time a final decision is made.
• A company’s mission may not vary frequently, but market changes force business models to change with greater frequency.
• Strategic planning has become a continual exercise that, when closely integrated with adaptable delivery strategies, enables companies to anticipate opportunities and, based on the right balance of innovation and operational effort, deploy minimum viable products, which allows them to mitigate risks that accompany large, drawn out project cycles.

   

  
  
  
  
  

   

I made an interesting mistake, today… one that comes up from time to time.  I used a business term in one way, and some members of my audience understood what I meant, while others did not.  In this case, the word was “core”.  The word has two different definitions.  Unfortunately, the definitions are quite different, at least in an Enterprise Architecture context.

The dictionary definition of “core” reflects the problem.  Bing dictionary defines “core” as the “central” or “most important” part of something.  Notice the word “or.”  Either meaning can be intended.

This goes to an old idea of putting the most important part of something in the middle.  In ancient kingdoms, the capital city was often very centrally located, usually near a convenient transportation route (like a river) that offered quick access to all parts of the kingdom (within reason).  So, the word core can mean “most important” or it can mean “in the middle.”  In the past, those two meanings were synonymous.

But in business, the thing “in the center” is not the most important thing.  Porter illustrates this with his (now famous) value chain model:

Porter’s Value Chain.  Image source.

What is the most important part of that model?  It’s the bottom-half, illustrated as the “primary activities” or value chain.  Porter is smart enough to avoid the word “core” because it has the connotation of “in the center” when he wanted to illustrate that value chains are not “in the center.” They traverse “end-to-end”. 

Porter seems to be somewhat alone in avoiding the term “core.”  Many business books and resources use the term “core” when referring to the primary activities.  There are countless illustrations, if you bing for images with the search phrase “business core”, where you are looking either at a set of service offerings or a value chain.  The following diagram is a business architecture reference model for the hospitality industry.  The name of this model: Core Business Domains and Processes. 

Core Business Domains and Processes – Hospitality Technology Next Generation Reference Architecture

On the other hand, there are also illustrations of business where “shared” items are at the center, and non-shared items are “at the edge”.  Illustrations like this one are also quite easy to find:

Source: United Nations Office for the Coordination of Humanitarian Affairs

In business architecture, do we illustrate “core” things to be “shared things at the center of a circle” or do we mean “core” to be “the most important things?”

In Enterprise Architecture, the distinction becomes more problematic.  Shared things are often the LEAST important thing from the perspective of the business, not the MOST important thing.  For example, the HR department is often a shared function, and unless the company is an HR service provider, that business function is not part of the value stream.  On the other hand, from the perspective of information architecture, the shared things are the most important and the non-shared things are the least important.  For example, a single understanding of “customer” is critical, especially when that understanding is shared across marketing, sales, and customer service.  It is shared, common, and very important.   

Now, add a specific use of the word “core” that is used in EA:  the notion of a “core diagram” as described in the book “Enterprise Architecture As Strategy” from Ross and Weill.  In that sense, the diagram itself may vary depending on which one of the operating models is being used, but the model itself is a shared, common understanding of the key items that are shared (whether that is process, information, or both).  In that case, the thing that is important is the thing that is shared.  That is called “core.”

Two years ago, I made a presentation to the Open Group conference about creating core diagrams using a method I created called “Minimum Sufficient Business Integration.”  In that method, I use the word “core” many times to refer to “shared” items that are central to an organizations’ Enterprise Architecture. 

So, what definition should I use for “core” when having a discussion about business and enterprise architecture?  Should the word “core” refer to “the most important” thing, or “the most shared” thing?

I don’t have a good answer.  Perhaps the best answer is to avoid the word “core” altogether. 

Last week I discussed the importance of effective communication for EA.This week I will talk about how important Enterprise Architecture and Business Architecture are to being successful at executing a Business Transformation in your organization.
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