Looking for Disruptive Business Models in Higher Education

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CAUDIT 2015 - ENTERPRISE ARCHITECTS | PAGE 1 www.enterprisearchitects.com BUSINESS BY DESIGN NOVEMBER 2015 CRAIG MARTIN Chief Architect, Enterprise Architects & FromHereOn

Transcript of Looking for Disruptive Business Models in Higher Education

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 1 www.enterprisearchitects.com

BUSINESS BY DESIGN

N O V E M B E R 2 0 1 5 CRAIG MARTIN Chief Architect, Enterprise Architects & FromHereOn

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 2

WHAT'S BUSINESS ABOUT?

Utility

(Foundation)

Innovate

Build Advantages

Assemble

Prolong Advantages

Mix

Reduce Disadvantages

DIF

FE

RE

NT

IA

TIO

N

D I F F E R E N T I AT I O N

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 3

WHAT'S BUSINESS ABOUT? S O L V I N G P R O B L E M S

‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone

Unknowable:

The relationship between cause

and effect is impossible to determine

as they constantly shift. In chaos, it is

necessary to act first and then sense

through the result of action how to

further respond. Understanding the

problem comes later. This is the

domain of rapid response.

Example: Natural disasters

Unknown Problems:

The problem is in constant flux as a

change to the situation causes ripple

effects and unpredictability

in other aspects. Information is often

incomplete. Rather than implementing

a solution, devising a concept, testing,

iterating and then responding is

needed. Problems often become

complex when human behavior is a

significant factor. This is the domain of

emergence.

Example: Schooling experiences,

organizational change management,

traffic management

Known unknowns:

A complicated problem can have multiple

right solutions. Complicated problems are

understood, analyzed and then responded

to. It often requires expertise to solve and is

largely process driven. Solving a

complicated problem often requires the

right expertise along with the right tools. In

this realm you may know you have a

problem but may not be able to solve it

alone. This is the domain of expertise.

Example: Fixing a car, constructing an

airplane.

Known knowns

A simple problem is one of cause and

effect. The solution is rarely disputed. The

problem can be categorized, understood

and a response devised based on the

information. This is the domain of best

practice.

Example: 1+1 = 2, solving a jigsaw puzzle.

The Knowledge /

Innovation funnel

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 4

WHAT'S BUSINESS ABOUT? F I N D I N G T H E R I G H T H E U R I S T I C

The Challenge is reducing the time it takes to move from the unresolved business challenges space to the repeatable formulas space.

Unresolved

Business

Challenges

Rules of

thumb

Robust,

repeatable and

replicable

formulas &

processes Ultimately all innovative

algorithms will become utility.

* From Roger Martin (2009) The Design of Business

MYSTERY

HEURISTIC

ALGORITHM

T h e K n o w l e d g e F u n n e l

This is the lean startup space

This is the exploitation and

industrialization space

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 5

WHAT'S BUSINESS ABOUT? M O V I N G F R O M E X P L O R A T I O N T O E X P L O I T A T I O N

The challenge is identifying the right skills in the organisation that are able to traverse the domains of innovative intuitive thinking, and reliable analytical thinking.

Unresolved

Business

Challenges

Robust, Repeatable

And Replicable

Processes

NPV

EVA

Operation

Management

Quality

Management

Corporate

Governance

Enterprise

Patterns

Portfolio

Analysis

IT Governance

Value

Engineering

PRINCE2

Six Sigma

& Loan

Business

Intelligence

Strategic

Traceability

Financial

Modelling

Innovation

Management Business

Analysis

Data

visualisation

Talent

Management

System

Thinking

Mission

Business Model

Design

Stakeholder

Value

TOGAF

Cost

Engineering

Solution

Architecture

Knowledge

Ecosystem

Six Thinking

Hats

Collective

Intelligence

Gamification

Crowdsourcing

Change

Management

Perception

Management Wicked

Problems

Environmental

Scanning

Brand

Management

Integrative

Thinking Goals

Capability

Five Forces

Root Cause

Analysis

Product

Management

HEURISTICS

RULES OF

THUMB

ANALYTICAL

THINKING

INTUITIVE

THINKING

* From Roger Martin (2009) The Design of Business

GOAL: Exploitation;

Reliability

Produce consistent,

predictable outcomes

GOAL:

Exploration; Validity

Produce outcomes that meet

an objective

A reliable system will

produce the same test

results every time

W H O I S B E S T Q U A L I F I E D T O

O P E R A T E H E R E ?

A valid system will produce a

result that is shown, through

the passage of time, to be

correct

Design

Thinking Business

Architecture

Thinking

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 6

WHAT'S BUSINESS ABOUT? S P E E D T H R O U G H T H E F U N N E L

Source: Adapted from “Business Process

Change” by Paul Harmon

THE KNOWLEDGE

FUNNEL

Non-core but complex -

Outsource

Innovation, chaos &

unresolved mysteries

HIGH

HIG

H

LOW

LO

W

Must be done but adds little value to

product or services

Very important to success, high value added

to products and services

STRATEGIC IMPORTANCE & VALUE

CO

MP

LEX

ITY

AN

D D

YN

AM

ICS

Complex negotiation,

design, or decision process

Many business rules;

expertise involved

Some business rules

Procedure or simple

algorithm

Non -Core

Capabilities

Core Differentiating

Capabilities

Everyday, highly

repeatable and

automated

Make repeatable and

reliable to gain efficiency

Core Competitive

Capabilities

GOAL: Reliably produce

consistent, predictable

outcomes

GOAL: Validity- Produce

outcomes

that meet desired

objectives

People Dominance

Process Dominance

Technology Dominance

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 7

DEMOCRATISATION OF KNOWLEDGE

The commodity space is growing, making the differentiation space more competitive

Non-core but complex -

Outsource

Innovation, chaos &

unresolved mysteries

HIGH

HIG

H

LOW

LO

W

Must be done but adds little value

to product or services

Very important to success, high value

added to products and services

STRATEGIC IMPORTANCE & VALUE

CO

MP

LEX

ITY

AN

D D

YN

AM

ICS

Complex negotiation,

design, or decision

process

Many business rules;

expertise involved

Some business rules

Procedure or simple

algorithm

Non -Core

Competencies

Core Differentiating

Competencies

Everyday, highly repeatable

and automated

Make repeatable and

reliable to gain efficiency

Core Competitive

Competencies

Non-core but complex - Outsource

Innovation, chaos &

unresolved

mysteries

HIGH

HIG

H

LOW

LO

W

Must be done but adds little value

to product or services

Very important to success, high value

added to products and services

STRATEGIC IMPORTANCE & VALUE

CO

MP

LEX

ITY

AN

D D

YN

AM

ICS

Many business rules;

expertise involved

Some business rules

Procedure or simple

algorithm

Non -Core Competencies

Core Differentiating

Competencies

Everyday, highly repeatable and

automated

Make repeatable

and reliable to gain

efficiency

Core Competitive

Competencies

OPPORTUNITY

OR THREAT?

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 8

OUR ROUTE TO SOLVING PROBLEMS

ABSTRACT

CONCRETE

Insight:

“I want a beautiful

environment”

Opportunity:

Paint the wall,

Move, Buy new

furniture, Hand a

picture

Problem

Statement:

“I need a hole”

Solution Statement:

“I need a drill”

PROBLEM SOLUTION

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 9

THE EMERGENCE OF ENTERPRISE DESIGN

ABSTRACT

CONCRETE

PROBLEM SOLUTION

Understanding the

problem from a

human centred

perspective

Prototyping and

testing for

disruptive options

Understanding

problem based on

drivers, pressures,

environment and

working out

motivation

Developing operating

models and solutions

DE

SI

GN

TH

IN

KI

NG

AR

CH

IT

EC

TU

RE

TH

IN

KI

NG

EN

TE

RP

RI

SE

D

ES

IG

N

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 10

ABSTRACT

CONCRETE

PROBLEM SOLUTION

Understanding the

problem from a

human centred

perspective

Prototyping and

testing for

disruptive options

Developing operating

models and solutions

NAVIGATING THE QUADRANTS A P P R O A C H E S TO C H A N G E

SOLUTION FOCUSSED TRANSFORMATION

FOCUSSED

DISRUPTION

FOCUSSED DELIVERY FOCUSSED

Understanding

problem based on

drivers, pressures,

environment and

working out

motivation

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 11

DESIGN MINDSET

U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S

R E S E A R C H C O N C E P T D E S I G N P R O T O T Y P E

D I S C O V E R D E F I N E D E V E L O P D E L I V E R

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 12

ABSTRACT

CONCRETE

PROBLEM SOLUTION

NAVIGATING THE QUADRANTS A P P R O A C H E S TO C H A N G E

D I S C O V E R D E F I N E D E V E L O P D E L I V E R

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 13

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 14

TOOLS FOR BUSINESS DESIGN:

A SELECTION

DISCOVER

Literature Review

Time Machine

Shadowing

Touchstone Tours

Service Safari

A Day in the Life

Diary Studies

The Five Whys

Journey Maps

DEFINE

Mapping Complex

Situations

Stakeholder Map

Customer Persona

Empathy Mapping

Mind Mapping

Scenarios

Affinity Mapping

How Might We

DEVELOP

Bodystorming

Collaborative

Ideation

Co-creation

Storyboards

Image Boards

Prototyping

Heuristic Evaluation

Critique Circle

DELIVER

Rapid Iterative

Testing

A/B Testing

Usability Testing

Ergonomic Analysis

Value Opportunity

Analysis

Feedback Review

The Key is process and emergence

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 15

THE PROCESS OF DESIGN

U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S

R E S E A R C H C O N C E P T D E S I G N P R O T O T Y P E

D I S C O V E R D E F I N E D E V E L O P D E L I V E R

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 16

THREE LENSES OF HUMAN CENTERED DESIGN

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 17

FOUR ORDERS OF DESIGN

› Enterprise Design

› Business Design,

› Organisation Design

› Service Design,

› UX Design, Instructional Design,

› Process Design

Richard Buchanan, (1992) Wicked Problems in Design Thinking

› Product Design, Engineering,

Architecture

› Technology Design

› Information Design

› Graphic Design, Visual Design

• Information Design produces designs for communicating intended meaning

through symbols and information

• Technology Design produces designs for platforms and systems to deliver

information and services

• Service Design produces designs for what needs to be achieved in terms of

person centered outcomes and experiences

• Enterprise Design produces designs for orchestrating Service Designs and

their implementation via Technology and Information designs

Disruption normally occurs here

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 18

ABSTRACT

CONCRETE

PROBLEM SOLUTION

Problem Definition

Influencers

Values

Value and Valuable

Value Proposition

Value System Engineering

Prototypes

Business Scenario

Business Model Canvas

Problem definition

Business Motivation

Model

Value Chain

Capabilities

Cross-Functional Capabilities

Capability Overlays

Roadmap & Planning

MOVING THROUGH THE QUADRANTS

D I S C O V E R D E F I N E D E V E L O P D E L I V E R

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 19

What is disruption?

› Innovation that creates a new

market

› Innovation that creates a new

value network

› Eventually disrupts an existing

market and value network

› Displaces an earlier offering or

technology

EXAMPLES OF DISRUPTIVE BUSINESS MODELS:

» Apple and their reduced switching costs and increased

barriers to entry

» Nespresso and their recurring revenues model

» Dell and their “earn before you spend” model

» Facebook and their “getting others to do the work”

model

» Xerox and the pay per use model

» Google and the micro-advertising model

» Amazon and their long tail model

» Jeep

» Railroads

» Printing press

» Gunpowder

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 20

WHEN DOES DISRUPTION OCCUR?

› First stage of disruption, an innovator

makes a product much more affordable

and simpler to use (for the user) than

what currently exists.

› The second stage of disruption is when

additional technological change is

added which makes it simpler and less

expensive to build and maintain the

products.

› The new change eventually displaces

the existing market and value network,

resulting in a radical improvement in

performance

Disruptive technologies take a while to change the market

Christensen, Clayton M. (2010-09-06).

Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns

PER

FO

RM

AN

CE

TIME

Market for old

technology

Market for new

technology

New replaces

old technology

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 21

BLUE OCEAN

Create uncontested markets

Make competition irrelevant

Create & Capture new

demand

Break value / cost

trade-off

Align with differentiation

AND low cost

RED OCEAN

Compete in existing

markets

Beat the competition

Explore existing demand

Make the value/cost

trade-off

Align with differentiation

OR low cost

Why does disruption occur?

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 22

DIGITAL DISRUPTION MAP

*Deloitte – Digital Disruption. Short fuse, big bang?

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 23

› Turned off to school

› Focused on passing the next test

› Not excited by the classroom

› No application to life after school

› Discouraged from following their own interests

› Knowledge = gradual accumulation of right

answers acquired through effort and obedience to

the instructor

› Role of the instructor is to TEACH them

› Right answers for everything exist

M OT I VAT I O N ? R E L E VA N C E ?

A U T H E N T I C I T Y ?

WHY IS DISRUPTION

REQUIRED IN

EDUCATION?

From an article by Roger Shank, Engines for Education

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 24

› Prescribed Curriculum

› Whiteboards

› Desks in rows

› Books and worksheets

› Paper & pencil

› Focus on the front (teacher)

› Read, take notes

› Study as an individual

› Take tests to measure learning

T R A D I T I O N A L C L A S S R O O M

WHY IS DISRUPTION

REQUIRED IN

EDUCATION?

From an article by Roger Shank, Engines for Education

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 25

PHOTO IN NEWS

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 26

WHY IS DISRUPTION REQUIRED IN

EDUCATION?

› These companies bring inputs of materials

into one end of their premises, transform

them by adding value, and deliver higher-

value products to their customers at the

other end.

› Most schools and universities currently

operate like a VAP business (Value chain

anyone?)

› Students are herded into a classroom at

the beginning of the school year, value is

added to them, and they’re promoted to

the next grade at year’s end.

› It’s a form of mass production on an

assembly line

Traditional education’s present value network is largely a VAP business

1. PREPARE &

PRODUCE TEXTBOOKS

& OTHER

INSTRUCTIONAL

MATERIALS

6. TEACHER

TRAINING

5. TESTING AND

ASSESSMENT

2. ADOPTION DECISIONS FOR CONTENT AND

CURRICULA

3. DELIVER CONTENT TO

STUDENTS

4. INDIVIDUAL ASSISTANCE

*Øystein Fjeldstad and Charles Stabell

Value Added Processes (VAP) businesses model

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 27

DISRUPTION ALTERS ENTIRE VALUE NETWORKS

Example: Disruption will alter the entire value chain and place the student at the centre

FACULTY &

STAFF

CONTENT

CLASSES

SOCIAL

INTERACTIO

N

LECTURERS

STUDENTS

STUDENTS &

SOCIAL

INTERACTION

CONTENT

CLASSES

FACULTY

STAFF

FACILITATORS

Teach at SCHOOL and do Homework at HOME Teach at HOME and do Homework at SCHOOL

Many teachers, many schools

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 28

EDUCATION DISRUPTION

SOLUTION SHOPS › Employ experienced, intuitively trained

experts whose job is to diagnose problems

and recommend solutions.

› Experts vs expertise

FACILITATED NETWORKS › Customers exchange with each other.

› Participation in the network typically isn’t the primary

profit engine for participants.

› Rather, the network is a supporting infrastructure that

helps the buyers and sellers make money elsewhere.

› The company that makes money in a facilitated

network is the one that facilitates the network.

This has opened up the space for other value networks in education

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 29

EDUCATION

DISRUPTION

› It is rare for a disruption to appear in just one part of a

value network without the rest of the system

changing, too.

› When a disruption arises, a new value network almost

always emerges to replace the existing one if the

disruption is to be successful.

› The reason the whole value network must be replaced

for a disruption to occur is that, in each stage, the

actors’ business models, economic incentives, and

rhythms of innovation and technological paradigms are

consistent and mutually reinforcing.

› Companies with disruptive economics simply are not

plug-compatible with the old value network.

› What this means is that the entire system for creating

education materials, making the decisions about which

materials to adopt, and delivering the content to

students must, and will, change.

› It is this second stage of disruption in public education

that will cause the world to “flip” and make student-

centric online technology a reality.

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 30

VALUE SYSTEM DESIGN

THE MANAGING RISK

VALUE SYSTEM

Insurance Hospitals

Gyms

Funerals

Legal

Panel

Beaters Traffic

Management

Broadcasting

& Radio

Gaming

THE

INSURANCE

VALUE SYSTEM

Insurance Hospitals

Panel

Beaters Medical

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 31

DISRUPTIVE MODELS ARE EMERGING IN THE

CUSTOMER DRIVEN SPACE

SELLER DRIVEN ENTERPRISE CUSTOMER CENTRIC ENTERPRISE CUSTOMER DRIVEN ENTERPRISE

“Maximize product

profitability”

Push Selectively Target Pull (collaboration)

DATA ANALYSIS

SERVICE Interactive & Proactive

UNDERSTANDING Segmented Individualized

CUSTOMER OFFERS Intra-enterprise bundles Inter-enterprise bundles

ORGANISATION Integrated Function Customer Outcome

CHANNELS

Segment Driven Integrated and Seamless

“Maximize market

share”

“Maximize customer

lifetime value”

MARKETING

Passive & Reactive Interactive & Reactive

Insight as Art Factual insight Predictive insight

Broad

Product Driven

Singular

Functional Silo

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 35

NE W VALUE ENGINES MUST BE CREATED TO CATER

FOR NE W VALUE NET WORKS AND BUSINESS MODELS

The Selling Concept - Product Driven

The Value Concept - Customer Driven

The Marketing Concept - Customer Centric

Production Products Selling and Promotion

Profit Through sales

volume

STARTING

POINT FOCUS MEANS ENDS

Target Market Segment

Segment Needs

Integrated Marketing

Profit through Increased

Market Share

STARTING

POINT FOCUS MEANS ENDS

Target individual Customer Intention

Outcome Marketing

Profit through customer lifetime

satisfaction

STARTING

POINT FOCUS MEANS ENDS

The customer driven shift

The digital strategy focus

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 36

‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD

PER

OR

MA

NC

E

TIME

ENTERPRISE

BRAND PLATFORM

BUSINESS MODEL

BUSINESS CAPABILITIES

PRODUCT

PRODUCT AND BUSINESS MODELS GO STALE

Organisations…and architects need to be able to provide the means to enable this change

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 37

DIFFERENT BUSINESS

MODELS NEED TO BE MIXED

Innovate

Build Advantages

Assemble

Prolong Advantages

Mix

Reduce Disadvantages

Aggregator Category Leader Consolidator Customizer Disintermediator

Experience Provider

Fast Follower Innovator Platform provider

Premium Player

Regulation Navigator

Reputation Player

Risk Absorber Solutions Provider

Value Player

Structure vs Behaviour - Utility Business Model Stereotypes provide a set of standard business model execution styles to work with

Standard assembly patterns of functional

and cross functional capabilities can be

leveraged as foundation business models to

kick-start your efforts

* Based upon “The Essential Advantage” Leinwand & Mainardi

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 38

*Adapted from Geoffrey Moore’s: Dealing with Darwin

Each industry moves along a

life cycle, with different

opportunities for

competitive advantage at

each stage

CHANGING BUSINESS MODELS Innovative business models are

developed towards the end of the

maturity phase

Introduction Growth Maturity Decline

TOTAL

INDUSTRY

REVENUE

TIME

DISRUPTOR

ENTERS

MARKET SHARE, REVENUE

& COST BECOME KEY

PRODUCT

INNOVATION

REDUCES

PROCESS INNOVATION

BEGINS

PRODUCT LEADERSHIP CUSTOMER INTIMACY

OPERATIONAL EXCELLENCE

V A L U E D I S C I P L I N E

O R I E N T A T I O N

T H R O U G H T H E

I N D U S T R Y

L I F E C Y C L E

Business Model

Transition

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THE COMPLEXITY OF BUSINESS

MODEL DESIGN HAS INCREASED

Leading and Best Practice Research, 2011/2012

Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 40

NON-CORE CAPABILITY (MEET)

The goal is to meet market standards,

exploitation and reliability

Produce consistent, predictable outcomes

Focus on effectiveness and efficiency

CORE COMPETING CAPABILITY (COMPETE)

The goal is competitive parity

Focus on innovation and efficiency

CORE DIFFERENTIATING CAPABILITY (BEAT)

The goal is competitive advantage,

exploration & validity

Focus on innovation and efficiency

Produce outcomes that meet an objective

FROM THE BUSINESS MODEL TO

THE CAPABILITY RESOURCES

A reliable system will produce the same test

results every time

A valid system will produce a result that is shown, through the

passage of time, to be correct

C O S T

V A L U E

5%

15%

80%

Leading and best practice research, 2011/2012

THE ENVIRONMENT

BUSINESS MODEL

Revenue Model

Value Model

Product & Service Model

Performance Model

Cost Model

Operating model

Differentiating

Capability

Non-Core

Capability

Competing

Capability

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 41

UNDERSTANDING THE ENGINE TO

PRODUCE THE BUSINESS FIT The operating model delivers the infrastructure required to deliver the products and services to the customer segments

Aligning what is valuable to the customer and what is value to the business is referred to as

the business fit. This means that the engine delivers both aspects and is the ideal mix an organization needs to engineer for.

THE ENVIRONMENT

BUSINESS MODEL

Markets

Industries

Customers

Market Segment

Channels

Customer Relationships

Value Proposition

Offering:

Services/Products

Processes/ Value Chains

Capabilities

Business Service

Functions

Data

Applications

Technology

MARKET

MODEL

OPERATING

MODEL

PRODUCTS &

SERVICES

MODEL

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 42

LINKING MARKET MODELS TO PRODUCT

AND SERVICE MODELS T H E V A L U E & V A L U A B L E I N T E G R A T I O N

Products and Services

Valuable to the Customer

PRODUCT N

PRODUCT I

PRODUCT T PRODUCT Y

PRODUCT K

SERVICE D SERVICE N

SERVICE H SERVICE P

PRODUCT B SERVICE N

SERVICE T

PRODUCT S

SERVICE A

PRODUCT X

PRODUCT H

SERVICE O

PRODUCT N

PRODUCT E SERVICE C

SERVICE Q

SERVICE N

SERVICE T

SERVICE B

Customer Outcome

CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC

Establishing my account is

quick and simple…

Integration is quick and

easy, with the right help

available

Efficient, with choices that

make it convenient

I know when the shipment

will arrive

I can find out whether my

shipments were delivered;

I get a meaningful

resolution to my problem

“I want to set-up my

account”

“I want to get ready to send

my products” “I want to send a shipment”

“I need to know when my

shipment will arrive”

“I want confirmation that

my shipments have arrived”

“Something has gone

wrong with my delivery…”

% of accounts set-up in

<X hours

% of accounts that

utilise more than X

% of orders with no

manual intervention

% of articles with at

least 4 scans

Service Delivery

Performance Metric

# of complaints per

million products

RESEARCH EVALUATE PURCHASE USE INTEGRATE SERVE

Value to the Business

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 43

CUSTOMER BEHAVIOUR: UNDERSTAND THE

EMOTIONAL ROLLER COASTER OF YOUR CUSTOMERS

Incremental, significant or transformation

changes required to improve the experience

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 44

BUSINESS BEHAVIOUR MEETS

CUSTOMER BEHAVIOUR What Value Maps are now required to address

the sub-optimal customer experience

What are the value maps

required to deliver this

outcome

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 45

FOUR LEVELS OF MIXING

AT THE CAPABILITY LEVEL Its at this point that business begins to see the

true value of using capabilities

THE ENVIRONMENT

BUSINESS MODEL

Markets

Industries

Customers

Market Segment

Channels

Customer Relationships

Value Proposition

Offering:

Services/Products

Processes/ Value Chains

Competencies

Business Service

Functions

Data

Applications

Technology

Standard functional capabilities can

be aligned to a value chain

Cross functional capabilities assemble and mix functional capabilities to

achieve outcomes in the value map or driver tree

Cross functional capabilities each drive out

different outcomes. Underlying functional

capabilities will have varying perspectives of

capability maturity and capability uplift

You can also use cross functional models as scenarios to

test the capability anchor model validity

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 46

BUSINESS MODEL EVALUATION Business model options are evaluated against value drivers or business model mechanics to determine shortlists

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 47

ARCHITECTURE DELIVERY MODELS E VA L U AT I O N O F S T R AT E G I C B U S I N E S S O P T I O N S

The capability mixes are evaluated against each scenario to determine the optimal path going forward

REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS.

Business Models

Value Streams

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 48

UNDERSTANDING VALUE,

PERFORMANCE AND MOTIVATION

Mission

Strategies

Tactics

Vision

Goals

Objectives

OUTCOME

C A P A B I L I T Y

People

Process

Technology

Information

Business

Model

Value Chain

Capabilities

Performance

Model

Value

Model

END MEANS

HOW

What comes first?

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 49

ONE SIZE DOES NOT FIT ALL

Christensen, Clayton M. (2010-09-06).

Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns

Different problems required different

organization structure responses

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 50

SEQUENCING THE PROCESS

ABSTRACT

CONCRETE

PROBLEM SOLUTION

Understanding the

problem from a

human centred

perspective

Prototyping and

testing for

disruptive options

Understanding the problem through

drivers, pressures, environment and

working out motivation Developing operating

models and solutions

TRANSFORMATION

FOCUSSED

Problem Motivation Business Model

DISRUPTION

FOCUSSED

Problem Motivation Business Model

Where to start?

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 51

“ARCHITECTURE THINKING”

M O T I V A T I O N M O D E L B U S I N E S S M O D E L

S E R V I C E M O D E L

C A P A B I L I T Y M O D E L

P e o p l e

R O A D M A P

G O V E R N A N C E

* Closed feedback

loop to Motivation

Model

Vision

Strategy

Blueprinting

Roadmapping

Governance

I n f o r m a t i o n

T e c h n o l o g y

P r o c e s s

Design Thinking: Empathise, Define, Ideate, Prototype, Test

M A R K E T M O D E L

MEANS ASSESSMENT

INFLUENCERS

ASSESSMENT

MEANS ENDS

MACRO

ENVIRONMENT

INDUSTRY

SCAN

SWOT PERFORMANCE

• Financial

• Customer

• Internal (current)

• Internal (long-term)

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 52

S O C I A L I S E W I T H B U S I N E S S , L I N K E I M E F F E C T I V E N E S S T O B U S I N E S S

G O A L S A N D R I S K , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R

LINKING INFORMATION CAPABILITY ROADMAP TO

BUSINESS CAPABILITY, RISK AND MOTIVATION

Understand business motivation

with respect to information

management

Identify the critical business

capabilities to support the strategies

Define roadmap – prioritised to

support timely delivery of EIM

capability linked to business need

1 2 3 Understand changing needs for a

digital business

Identify the information risk

appetite and risks

Assess how application strategies

are impacted by low EIM

capability maturity

Identify the EIM capabilities

materially impacting business

capability and information risk –

pertinent to the business

motivation

4

6 7 8 9 Measure and monitor performance

5 Assess how business capability

effectiveness is materially impacted

by low EIM capability maturity

MO TIVATIO N

MO DE L

BUSINE SS

C APABIL IT IE S

IM RO ADMAP

G O VE RNANC E

* Closed feedback

loop to

Motivation

Model

I n f o rmat ion

P roce s s

MEANS ASSESSMENT

INFLUENCERS

ASSESSMENT

MEANS ENDS

MACRO

ENVIRONMENT

INDUSTRY

SCAN

SWOT PERFORMANCE

• Financial

• Customer

• Internal (current)

• Internal (long-term)

1

2

3

4 6

8

7

I n f o rmat ion

R i sk

Di g i ta l

Re qu i re me nts

9

APPL IC AT IONS

5

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 53

S O C I A L I S E , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R

CLOUD STRATEGY & ROADMAPPING JOURNEY

Understand the motivation for Cloud Understand the risk appetite of the

business and the risk profile of the

offering Obtain consensus, support and

commitment

1 2 3 Understand business requirements for

Cloud

Identify and classify assets going into

the Cloud

Assess the Cloud service offerings Define the roadmap

4

5 6 7 8 Measure and monitor performance

7

MO TIVATIO N MO DE L

C LO UD SE RVIC E

O F F ER ING S

C APABIL ITY MO DE L

RO ADMAP

G O VE RNANC E

* Closed feedback

loop to

Motivation Model

I n f o rmat ion

Te chn o logy

P roce s s

MEANS ASSESSMENT

INFLUENCERS

ASSESSMENT

MEANS ENDS

MACRO

ENVIRONMENT

INDUSTRY

SCAN

SWOT PERFORMANCE

• Financial

• Customer

• Internal (current)

• Internal (long-term)

1 2

3

4 5

6

I n f o rmat ion

& R i sk

C LO UD

RE Q UIRE MENTS

8 APPL IC AT IONS

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 54

HUMAN CENTRED SERVICE AND

CAPABILITY DEVELOPMENT

R O L E S &

O P . M O D E L

C A P A B I L I T Y

M O D E L R O A D M A P

G O V E R N A N C E

* Closed feedback

loop to Motivation

Model

MEANS ASSESSMENT

M O T I V A T I O N

M O D E L

INFLUENCERS

ASSESSMENT

MEANS ENDS

S E R V I C E M O D E L /

C A T A L O G U E

WHAT

WHY

C O M M U N I C A T I O N

E N G A G E M E N T

M O D E L

D E M A N D

A N A L Y S I S S O U R C I N G

BUSINESS CONTEXT

HOW

WHO

WHERE

WHEN

C A P A B I L I T Y

A S S E S S M E N T

B U S I N E S S M O D E L

C U S T O M E R P E R S O N A S

V A L U E P R O P

E M P A T H Y M A P S

C U R R E N T F U T U R E

S E R V I C E D E S I G N P R O C E S S

E N A B L E S

B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 55

THE BUSINESS OF ARCHITECTURE

RO ADMAP

RO L ES &

O P . MO DEL

GO V ERNANCE

* Closed feedback loop to

Motivation Model

MEANS ASSESSMENT

S ERV ICE MO DEL

/ CATAL O GUE CO MMUNICAT ION

ENGAGEMENT

MO DEL

DEMAND

ANAL YS IS S O URCING

CAP ABI L I TY

AS S ESS MENT

MO TIV AT ION

MO DEL

INFLUENCERS

ASSESSMENT

MEANS ENDS

BUS INES S MODEL

CAP ABI L I TY

MO DEL

BUSINESS CONTEXT

Where

When

Who

How

Why

What

Enab l e s

MANDATE

SE RVIC E C O -DE S IG N

C URRE NT F UTURE

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 56

ABOUT EA

zero PEOPLE TRAINED

THIS YEAR

V E N D O R A L I G N M E N T

MORE THAN 4500 PEOPLE

TRAINED IN ARCHITECTURE

PRACTICES (AND RISING)

13 YEARS IN BUSINESS 8

GLOBAL OFFICES 4500

MORE THAN 10,000 DAYS OF

STRATEGY & ARCHITECTURE

SERVICES DELIVERED LAST YEAR

10,000

one COMMON METHOD

1000+

five CONTINENTS WITH

TRAINING OPTIONS

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 57

OUR SERVICES

Servicing the Strategy

and Architecture needs

of Global Organisations

STRATEGY CONSULTING

› Business Architecture

› Strategic Services & Operating Model

Design:

» Business Services & Capabilities

» IT Services & Capabilities

› Segment Strategies and Roadmaps:

» Customer Experience & Digital

» Enterprise Information Management

» Big Data Analytics

» Applications

» Cloud & Infrastructure

» Security, Risk & Resilience

» Innovation Management

PRACTICE DEVELOPMENT

› Architecture Service Model Design

› Architecture Operating Model Design

› Service and Capability Readiness

Assessment

› Professional Training and Certification

(Business Architecture, Information

Management, TOGAF®, CDMP®,

ArchiMate® and Design Thinking)

› Project Architecture Resources

› Architecture Talent Strategy and

Professional Development

› Architecture Back Office Services

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 58

QUESTIONS?

C A U D I T 2 0 1 5 - E N T E R P R I S E A R C H I T E C T S | PAGE 59 enterprisearchitects.com