Search Results for: business model

Will Your Organisation Need a CIO by 2020?

by
The title of my new blog post is provocative. Why would I ask such a question, especially after covering number of CIO surveys, trends, leading CIO thought leaders and underlining the strategic importance of IT in this very blog? I am asking this question because the IT Landscape as you and I know it, is changing and very fast.  Even by IT industry standards the pace of recent developments is remarkable. The business technology is undergoing rapid evolution. And the central argument which I am presenting here is that the conventional role of CIO or CIO function as it stands today will either be ineffective, redundant or out-dated and hence not required by end of this decade. Let me explain…

There are a number of reasons and drivers for the rapid evolution of business technology. However according to me there are five major forces which are influencing this evolution. They are Business Services, Application Services, Business Analytics, Consumerisation of IT and Cloud Computing. I will try to explain them briefly  

image

Rise of Business Services – Awareness of the fact that, “Organisations purchase technology to fulfil business needs” is growing like never before. Given economic challenges very few organisations can now justify technology investment for pure technology advantages. Your CEO, COO, CXO and CFO will be demanding “Return on Investment” (ROI) and “Value for Money” (VFM) from each technology $ invested and they will be demanding that most likely in year one. Days of five or even three year technology pay-back are certainly behind us. And this is where purchasing business services independent of large technology investment is becoming so attractive. There are a number of examples of this trend ranging from payment processing to HR processing. Google is taking business services to new dimensions.
 

A test question for you – If you are CEO of a mid-size organisation would you invest $5 Million in back office processing software, hardware, network, back-up, security etc.? Or would you sign up for business outcome based contract with niche business services supplier? I know your answer and mine is the same!
 
Maturing Cloud Computing Industry – Enough is written about benefits of Cloud Computing (including this blog) so I won’t repeat it. However it is safe to conclude that Cloud is more than hype. It is real and there is an entire industry being built around Cloud propositions by all major IT vendors as well as rising number of niche players. Cloud computing if adopted in right manner frees your organisation from capital intensive infrastructure and operations investments. The business justification will not be far different than arguments which I have listed above. Cloud computing however gives organisations added flexibility of building solutions to suit their requirements yet allows them to offload its capital and resource intensive aspects to infrastructure specialists. It can be easily argued that business services are a variant of cloud computing. 
Another test question for you – You are a CFO of retail chain and you have a legacy retail management application. Your peak business transactions are expected only in the months of March, September and December but for all other months you operate at half the transactions of peak. Would you like to scale up and down the capacity and hence the cost of your retail application operations? I know your answer and mine is the same!
 
Business Analytics Coming of Age – A large number of small niche companies and even large companies like IBM and Oracle are investing millions of $ in developing and enhancing business analytics products and services and they are doing this for a very good reason. People like you and me (and multiply that number by millions of Indians and Chinese) are adapting to self-service shopping lifestyle. When was the last time you went into your bank branch? Or when was the last time you bought a book in a book shop? When was the last time you called your airline or visited its city booking office to purchase your airline tickets? I know your answer….we are more and more relying on smart, intuitive ecommerce sites, price comparison sites, shopping portals, kiosks, ATMs, etc. to buy everyday and occasional things of need and desire. The merchants are looking for smarter ways to know you, your preferences, your wish lists and keep your loyalty. This is true for brick and mortar businesses too by the way. And smart merchants are turning to business analytics to make more sense of their business transactions, shopping patterns, supplier dependencies, seasonality and thousands of other trends which affect their business. 

Another test question for you – if you are a mid-size or small company COO running a brick and mortar plus an ecommerce portal for your business would you rely on your in-house MI experts to keep up with 1000s of changing patterns, equations, behaviours and trends? Or would you secure an external niche business analytics company to analyse tons of your business transactions, do the number crunching and present predictions for next quarter along with benchmarks? I know your answer and mine is not too different! 
 
Popularity of Application Services – This may be very specific development but worth making a note of. You may recollect my earlier blog on ASOS and how smartly they are leveraging open access to their applications of catalogues. Apple App Store is another example of this model. These smart technology and business models are making middleware software, hardware and tools almost redundant by giving core access to application tier of your business systems. You suppliers and partners deliver direct to your application and data tier, why bother with message brokering? See my proposed revised retail reference architecture and you will know what I mean. 

Let me not ask you a question but pass you my verdict on this one – No I don’t need an internal IT department to develop interface to launch my catalogue on Apple App Store. I will go to a niche small firm who will do it for me at fraction of cost to much better response times than internal development and test department. 
 
Spread of Technology Consumerisation – Again enough is said about Apple ipad, Amazon Kindle, and Android smart-phones. The fact is if you are reading this you have either all of minimum one of them. And I know that you will prefer to carry your own ipad to work and do your office email, documents as well look for best place for Thurs after-work drinks on Google map on one of those boring conference calls. And if you organisation is not funding your smart-phone then you do not mind getting on an attractive tariff to join swelling ranks of smart mobile workers of next generation. I am not even mentioning Google Docs, Microsoft Office 365 and other similar offerings which liberate corporate IT. 

You know where I am going next – If your data privacy and security concerns were addressed would you mind if your employees brought their own IT equipment to work? I would not if I am a CFO of a business which made loss of double digit last year and who do not understand why I pay three times for a desk top compared to retail cost of ipad!
 
To summarise my argument – given these very influential forces which are shaping the world of business technology and the fact that they are here and will be growing in their influence….and their strong commercial as well as functional advantages; how long before your conventional CIO function turns into out-dated, ineffective and irrelevant cost centre? If the trajectory of this evolution continues like this, will your organisation need a CIO by 2020? I know your answer and mine is very similar!

Assets and Resources

by

More on translating Business Model Canvas to Archimate etc. (Yes, it’s another of those long, interminable technical posts – my apologies, though they are necessary…)
This one picks up on a couple of sort-of-mistakes that I’ve made in the previous post, ‘Questions on business-model to enterprise-architecture‘, and which need a bit more clarity in explanation. In […]

Rethinking the layers in enterprise-architecture

by

Still plodding away on ideas for a systematic process to translate a business-model in Business Model Canvas down into real-world architecture and implementation. (This links up with quite a few previous posts, such as ‘More on business-models‘, ‘Enterprise-architecture – let’s keep it simple‘ and ‘Is Archimate too IT-centric for enterprise-architecture?‘)
[Note: this is a work-in-progress post, […]

How Innovative Retail Architecture is Boosting Profits at ASOS

by

Outstanding and outperforming businesses often challenge conventional industry architectures. Such organisations innovate and develop new business models on their way to above-average profits. The online fashion giant ASOS (as seen on screen) has exact…

How Innovative Retail Architecture is Boosting Profits at ASOS

by
Outstanding and outperforming businesses often challenge conventional industry architectures. Such organisations innovate and develop new business models on their way to above-average profits. The online fashion giant ASOS (as seen on screen) has exactly done this. In one of firsts of the industry, ASOS intends to make free global shipping a “permanent” part of its business model after international sales growth fuelled a 63 per cent jump in sales in the first quarter to £107m. International sales grew 160 per cent to £59.6m in the three months to June 30, and now make up 57 per cent of overall sales. Singapore, Russia and Australia are among the fastest-growing markets. This is impressive compared to UK high street bellwether Marks & Spencer which narrowly beat City expectations recently by declaring a 13% increase in profits in its last financial year. But ASOS business performance looks blockbuster when it is compared to other retail results. For instance the gravity of the high street downturn is spelled out in new research which shows UK retail chains have been closing stores this year at a rate of about 20 a day. The latest figures from accountancy firm PricewaterhouseCoopers show 375 retailers went bust in the second quarter of 2011, a 9% increase on the same period last year. 

So what makes ASOS special? ASOS targets internet-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities such as Kate Moss, Sienna Miller and Alexa Chung, but at a fraction of the price. While many retailers have struggled against tough macro headwinds, ASOS has prospered, benefiting from a young core customer base and the migration of spending from the high street to the Internet. The firm has a Facebook store and mobile applications. “This is about the shopping experience coming to you. That could be via apps, on your mobile, on Facebook,” said the CEO. “This is the next shift in terms of how we perceive shopping online. Rather than websites that you go to I think it becomes much more part of your personalised web experience.” Compare and contrast this with the fact that, despite huge outlays in the past, the new Marks & Spencer boss is to spend an extra £600m on its UK chain. 

But the unsung hero behind ASOS flight according to me is the innovation which ASOS IT department is bringing to the business. ASOS has crashed the conventional retail reference architecture and brought innovation leveraging the technology advances such as Cloud Computing, Social Media and Consumer Devices. For instance ASOS is assessing how Microsoft’s Azure cloud service could be used to expose mobile data application programming interfaces, which would enable it to extend its reach through mash-ups. Daniel West, IT director, ASOS, has established an IT strategy to build for the cloud first, rather than on-premise. “We look at the cloud first and build if nothing is available.” Daniel West said: “My technology design is to support our international growth. So we need to look at delivery through the cloud.”

image
Innovative Retail Reference Architecture (Revised V2)

See my revised Retail Reference Architecture above which reflects ASOS innovation. (Ref: The original Retail Reference Architecture). The ASOS APIs which power the mash-ups empowers young ASOS customers to bypass traditional Retail Touch Points and Work-flows and access the ASOS catalogue directly. It has merged social networking and shopping by launching the first European fully integrated Facebook Store. ASOS customers are able to buy, save, share and comment on items without needing to leave the social networking site to obtain full e-commerce functionality.

ASOS successfully demonstrate that Industry Reference Architectures are a sound and solid foundation but they are not sacred and should be chopped, changed and innovated to bring dynamic benefits to the business. I am not claiming that innovative Retail Architecture is the only reason behind ASOS success. Smart branding, clear customer segmentation, effective supply-chain and visionary leadership have clearly contributed to ASOS success. However, the contributions from ASOS IT team can not be underestimated in the analysis of ASOS success.

Ten Topics a Venture Capitalist Cares About

by
Venture-capital-failure-rates

According to Guy Kawasaki The ten topics that a venture capitalist cares about are:1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action

[Image courtesy of FreeDigitalPhotos.net]

Posted via email from Jeffrey Blake – The Brand Hammer | Comment »

Ten Topics a Venture Capitalist Cares About

by

According to Guy Kawasaki The ten topics that a venture capitalist cares about are:1. Problem2. Your solution3. Business model4. Underlying magic/technology5. Marketing and sales6. Competition7. Team8. Projections and milestones9. Status and…

Categories Uncategorized

Who is the customer?

by

Who is the customer, in a business model?
That’s perhaps not as simple as it sounds. I’ve been working on a long how-to post on using Business Model Canvas in a non-profit context, and realised that even in a commercial context it can get very messy once we move outside of the relatively simple ‘world’ that […]

An integrated view of change

by

It often happens that when you reach for the business strategic view to explain why certain things should happen at other levels, communication get overtly complicated. Most of us are used to encountering strategy maps, scorecards, motivation models and since 2009 business model canvases. The problem I’ve encountered is that these perspectives of the business […]

How Strategic Planning relates to Enterprise Architecture?

by

TOGAF often refers to Strategic Planning without specifying the details of what it consists of. This document explains why there is a perfect fit between the two.

Strategic Planning means different things to different people. The one constant is its reference to Business Planning which usually occurs annually in most companies. One of the activities of this exercise is the consideration of the portfolio of projects for the following financial year, also referred to as Project Portfolio Management (PPM). This activity may also be triggered when a company modifies its strategy or the priority of its current developments.

Drivers for Strategic Planning may be

· New products or services

· A need for greater Business flexibility and agility

· Merger & Acquisition

· Company’s reorganization

· Consolidation of manufacturing plants, lines of business, partners, information systems

· Cost reduction

· Risk mitigation

· Business Process Management initiatives

· Business Process Outsourcing

· Facilities outsourcing or in sourcing

· Off shoring

Strategic Planning as a process may include activities such as:

1. The definition of the mission and objectives of the enterprise

Most companies have a mission statement depicting the business vision, the purpose and value of the company and the visionary goals to address future opportunities. With that business vision, the board of the company defines the strategic (e.g. reputation, market share) and financial objectives (e.g. earnings growth, sales targets).

2. Environmental analysis

The environmental analysis may include the following activities:

· Internal analysis of the enterprise

· Analysis of the enterprise’s industry

· A PEST Analysis (Political, Economic, Social, and Technological factors). It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning, identify the strengths and weaknesses, the opportunities and threats (SWOT).

3. Strategy definition

Based on the previous activities, the enterprise matches strengths to opportunities and addressing its weaknesses and external threats and elaborate a strategic plan. This plan may then be refined at different levels in the enterprise. Below is a diagram explaining the various levels of plans.

image

To build that strategy, an Enterprise Strategy Model may be used to represent the Enterprise situation accurately and realistically for both past and future views. This can be based on Business Motivation Modeling (BMM) which allows developing, communicating and managing a Strategic Plan. Another possibility is the use of Business Model Canvas which allows the company to develop and sketch out new or existing business models. (Refer to the work from Alexander Osterwalder http://alexosterwalder.com/).

The model’s analyses should consider important strategic variables such as customers demand expectations, pricing and elasticity, competitor behavior, emissions regulations, future input, and labor costs.

These variables are then mapped to the main important business processes (capacity, business capabilities, constraints), and economic performance to determine the best decision for each scenario. The strategic model can be based on business processes such as customer, operation or background processes. Scenarios can then are segmented and analyzed by customer, product portfolio, network redesign, long term recruiting and capacity, mergers and acquisitions to describe Segment Business Plans.

4. Strategy Implementation

The selected strategy is implemented by means of programs, projects, budgets, processes and procedures. The way in which the strategy is implemented can have a significant impact on whether it will be successful, and this is where Enterprise Architecture may have a significant role to play. Often, the people formulating the strategy are different from those implementing it. The way the strategy is communicated is a key element of the success and should be clearly explained to the different layers of management including the Enterprise Architecture team.

To support that strategy, different levels or architecture can be considered such as strategic, segment or capability architectures.

image

Figure 20-1: Summary Classification Model for Architecture Landscapes

This diagram below illustrates different examples of new business capabilities linked to a Strategic Architecture.

image

It also illustrates how Strategic Architecture supports the enterprise’s vision and the strategic plan communicated to an Enterprise Architecture team.

Going to the next level allows better detail the various deliverables and the associated new business capabilities. The segment architecture maps perfectly to the Segment Business Plan.

image

5. Evaluation and monitoring

The implementation of the strategy must be monitored and adjustments made as required.

Evaluation and monitoring consists of the following steps:

1. Definition of KPIs, measurement and metrics

2. Definition of target values for these KPIs

3. Perform measurements

4. Compare measured results to the pre-defined standard

5. Make necessary changes

Strategic Planning and Enterprise Architecture should ensure that information systems do not operate in a vacuum. At its core, TOGAF 9 uses/supports a strong set of guidelines that were promoted in the previous version, and have surrounded them with guidance on how to adopt and apply TOGAF to the enterprise for Strategic Planning initiatives. The ADM diagram below clearly indicates the integration between the two processes.

The company’s mission and vision must be communicated to the Enterprise Architecture team which then maps Business Capabilities to the different Business Plans levels.

image

Many Enterprise Architecture projects are focused at low levels but should be aligned with Strategic Corporate Planning. Enterprise Architecture is a critical discipline, one Strategic Planning mechanism to structure an enterprise. TOGAF 9 is without doubt an effective framework for working with stakeholders through Strategic Planning and architecture work, especially for organizations who are actively transforming themselves.

How Strategic Planning relates to Enterprise Architecture?

by

TOGAF often refers to Strategic Planning without specifying the details of what it consists of. This document explains why there is a perfect fit between the two.

Strategic Planning means different things to different people. The one constant is its reference to Business Planning which usually occurs annually in most companies. One of the activities of this exercise is the consideration of the portfolio of projects for the following financial year, also referred to as Project Portfolio Management (PPM). This activity may also be triggered when a company modifies its strategy or the priority of its current developments.

Drivers for Strategic Planning may be

· New products or services

· A need for greater Business flexibility and agility

· Merger & Acquisition

· Company’s reorganization

· Consolidation of manufacturing plants, lines of business, partners, information systems

· Cost reduction

· Risk mitigation

· Business Process Management initiatives

· Business Process Outsourcing

· Facilities outsourcing or in sourcing

· Off shoring

Strategic Planning as a process may include activities such as:

1. The definition of the mission and objectives of the enterprise

Most companies have a mission statement depicting the business vision, the purpose and value of the company and the visionary goals to address future opportunities. With that business vision, the board of the company defines the strategic (e.g. reputation, market share) and financial objectives (e.g. earnings growth, sales targets).

2. Environmental analysis

The environmental analysis may include the following activities:

· Internal analysis of the enterprise

· Analysis of the enterprise’s industry

· A PEST Analysis (Political, Economic, Social, and Technological factors). It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning, identify the strengths and weaknesses, the opportunities and threats (SWOT).

3. Strategy definition

Based on the previous activities, the enterprise matches strengths to opportunities and addressing its weaknesses and external threats and elaborate a strategic plan. This plan may then be refined at different levels in the enterprise. Below is a diagram explaining the various levels of plans.

image

To build that strategy, an Enterprise Strategy Model may be used to represent the Enterprise situation accurately and realistically for both past and future views. This can be based on Business Motivation Modeling (BMM) which allows developing, communicating and managing a Strategic Plan. Another possibility is the use of Business Model Canvas which allows the company to develop and sketch out new or existing business models. (Refer to the work from Alexander Osterwalder http://alexosterwalder.com/).

The model’s analyses should consider important strategic variables such as customers demand expectations, pricing and elasticity, competitor behavior, emissions regulations, future input, and labor costs.

These variables are then mapped to the main important business processes (capacity, business capabilities, constraints), and economic performance to determine the best decision for each scenario. The strategic model can be based on business processes such as customer, operation or background processes. Scenarios can then are segmented and analyzed by customer, product portfolio, network redesign, long term recruiting and capacity, mergers and acquisitions to describe Segment Business Plans.

4. Strategy Implementation

The selected strategy is implemented by means of programs, projects, budgets, processes and procedures. The way in which the strategy is implemented can have a significant impact on whether it will be successful, and this is where Enterprise Architecture may have a significant role to play. Often, the people formulating the strategy are different from those implementing it. The way the strategy is communicated is a key element of the success and should be clearly explained to the different layers of management including the Enterprise Architecture team.

To support that strategy, different levels or architecture can be considered such as strategic, segment or capability architectures.

image

Figure 20-1: Summary Classification Model for Architecture Landscapes

This diagram below illustrates different examples of new business capabilities linked to a Strategic Architecture.

image

It also illustrates how Strategic Architecture supports the enterprise’s vision and the strategic plan communicated to an Enterprise Architecture team.

Going to the next level allows better detail the various deliverables and the associated new business capabilities. The segment architecture maps perfectly to the Segment Business Plan.

image

5. Evaluation and monitoring

The implementation of the strategy must be monitored and adjustments made as required.

Evaluation and monitoring consists of the following steps:

1. Definition of KPIs, measurement and metrics

2. Definition of target values for these KPIs

3. Perform measurements

4. Compare measured results to the pre-defined standard

5. Make necessary changes

Strategic Planning and Enterprise Architecture should ensure that information systems do not operate in a vacuum. At its core, TOGAF 9 uses/supports a strong set of guidelines that were promoted in the previous version, and have surrounded them with guidance on how to adopt and apply TOGAF to the enterprise for Strategic Planning initiatives. The ADM diagram below clearly indicates the integration between the two processes.

The company’s mission and vision must be communicated to the Enterprise Architecture team which then maps Business Capabilities to the different Business Plans levels.

image

Many Enterprise Architecture projects are focused at low levels but should be aligned with Strategic Corporate Planning. Enterprise Architecture is a critical discipline, one Strategic Planning mechanism to structure an enterprise. TOGAF 9 is without doubt an effective framework for working with stakeholders through Strategic Planning and architecture work, especially for organizations who are actively transforming themselves.