EA & Five-Dimensional Business Capability Map

Essentially, business is about the group of people to achieve something bigger or create value larger than each individual simply can not make by herself or himself. Therefore, the business capability is collective wisdom and capability & capacity to allow business interconnecting people, knowledge, IT, tools and process to outperform rivals on some important measurement.

 Modern EA need shift from technology focus to business focus, to help business blueprint capability map, then base on such sets of business capabilities & unique competency, EA need help further craft capability-driven strategy planning and create a vision for the enterprise, and provide the guide to execute it seamlessly.  

There are five dimensional sets of business capabilities EA can blueprint:

1.      Seven Business Functional Capabilities:

a) Client relationship management
b) Sales & marketing management
c)Product/service planning & development management
d) Finance & Administration management
e) HR management
f) Information/Knowledgebase management
g). Engagement management

2.     Seven Strategic Business Capabilities:

EA help business focus on understanding the strategic aspects of capabilities which are sets of strategic business processes:

1) Contract Management (the basic contract with a customer)
2) Project Management (for gigs that are bigger than a few weeks)
3) People Management (to acquire and manage people (perms or contract).
4) Various Life cycles (used when appropriate)
4.1) Solution development (a general solution delivery process)
4.2) Process Management (to improve processes)
4.3) Product Management (for new or improved products or services)
4.4) Software Development (if software delivered)
5) Customer Service and Support (in case there are problems
6) Standard product or service delivery (like training modules)
7) Team Performance Vertical function driven capabilities

 

3.      Five- Step Value Chain:

 

   1)  Identify or create a knowledge product
   2) Assemble the product (hire and train consultants, knowledge management)
   3) Market and Sell the product (awareness, sales, engagement)
   4) Deliver and oversee the engagement (engagement, collections, service)
   5) Follow-up and value recognition (service and account mgmt)

4.     21st Century Business Transformation Capabilities:

1)      Leaning Capability: Amplify to enterprise level: it's about Knowledge Management Capability, Human Mindset Capability and Organizational Intelligence.

2)     Change Capability: At business level, it's Change Management Capability, Culture Reshaping. Envision future of business;

3)     Innovation Capability --Unique Skill Set, Character--Core Competency, Business Value Proposition., Information Flow Capability., etc.

4)     Process Optimization Capabilities: EA can help keep today's business lean --the process, cost structure., etc

5)      Governance Capabilities: GRC-Governance, Risk Management, Compliance

5.      Potential Competitive Differentiator Options

      (a) Having absolutely the best, most knowledgeable, well trained people, and core competencies.
(b) Having the broadest, deepest knowledge base of any in the industry.
(c) Developing the most innovative products and services.
(d) Having an engagement management capability which strengthens and binds the ties between the Firm and the Client.

Option (a) requires an extraordinary HR (recruitment, training, retaining) management capability.
Option (b) requires an extraordinary KM research, recording, retrieval capability
Option (c) is, in part, the leveraging of (a) and (b) by creating an innovative P/S development capability.
Option (d) requires re-thinking the way ‘engagements are managed’ and would need to be much, much more than the usual ‘project management’ approach.
•Input = Business Model
•#1. Map current and Future Business State
•#2. Develop Use Cases
•#3. Identify Required Services
•#4. Identify Service Interactions
•#5. Identify Message Contacts
•#6. Define Solution DNA
•#7. Define Service DNA
•#8. Identify Existing Service Reuse Opportunities
•#9. Evaluate impact on Business
•#10. Develop /Enhance Service Model


EA may need create conceptual, contextual and logic layer of high-level capabilities identified, and resulting in building up well-tailored strategy for business to win with the long term perspective.

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Five Building Blocks of Talent Strategy from “Fifth Discipline”

“The Fifth Discipline” series of book written by Peter Senge was published in 1990th, “The Fifth Discipline” is all about learning. As applied in the “learning organization,” it results in changes in action, not just in forming new ideas, the five key disciplines are:

1.    System Thinking

Having been taught to break problems down and see things laterally and sequentially, we’ve lost a sense of the whole, why do we attempt to solve every problem by breaking it down into unconnected parts and attempt to rebuild each one independently then re-create a new whole? Senge says the roots of this approach lie in the culture—in “linear” Western language and the mindset of the Industrial Age.

Systems thinking is a discipline for seeing wholes:

·         It’s a framework for seeing interrelationships rather than things

·         Seeing patterns of change rather than static ‘snapshots”

·         Develop a sensibility for the “subtle interconnectedness”, that gives living systems their unique character

 2.     Personal Mastery

 “Organizations learn only through individuals who learn,” says Peter Senge. As “approaching one’s life as a creative work:

·         A special sense of purpose that lies behind their visions and goals. Their vision is “a calling,” not just a good idea.

·         An inquisitive and committed nature. An ability to see reality more accurately.

·         A sense of connectedness to life, to others and to larger creative processes, which they can influence but not unilaterally control. These people “live in a continual learning mode. They never arrive.”

Personal mastery must be a discipline.” Senge says. “It is a process of continually focusing and refocusing on what one truly wants, on one’s visions.”

3.    Mental models

We must seek divergent views before developing a convergent conclusion. Senge recommends a divergent approach:

·         Small Is Beautiful: First, work to see issues from multiple points of view. Then identify tradeoffs; make choices, while continually remaining open to discovering errors in one’s reasoning

·         Be “collaborative inquirers,” suggests Senge, not forceful advocates. Seek to “surface, expose, and bring into conversation people assumptions...so that shared mental models can continually improve.

·         Institutional learning is the process whereby people change their shared mental models of the company, their markets, and their competitors.

·         “Just as ‘linear thinking’ dominates most mental models used for critical decisions today, the learning organizations of the future will make key decisions based on shared understandings of interrelationships and patterns

4. Shared vision

 “The strategy plan will not energize us, vision does", Senge says, “Vision is simply an answer to the questions, What do I truly want? What is it that really matters to me? What is it that I would truly like to be part of creating?”

•  “The art of visionary leadership”: Organizations do not create visions. People create visions. Organizations will not have visions until individuals have visions, a shared vision is not just “an idea,” but “a force in people’s hearts that shared visions;

·         Common Purpose: Change people’s relationship with the enterprise—it’s no longer “theirs,” but ours. Create a commonplace image, identity, purpose, and set of operating values.

·         Courage: The new ways of thinking and acting, foster risk-taking and experimentation.

·         Aspiration: drives positive visions and is a “continuing source of learning and growth

5. Team learning

“Shared vision and talent are not enough to ensure success", Senge asserts. “The world is full of teams made up of talented individuals who share a vision for a while, yet fail to learn.”

Senge says that the five disciplines’ convergence creates new waves of experimentation and advancement—and, hopefully, “learning organizations” in which “people continually expand their capacity to create the results they truly desire.”

All teams must continually be learning, growing, sharing, and thinking. According to Senge, team learning has three critical dimensions:

·         The need to think insightfully about complex issues.

·          The need for innovative, coordinated action

·          “None of us is as smart as all of us,” Team learning is about tapping the potential of many minds.

We must learn to think, interact and see the connectedness of all things in new and different ways.

The Fifth Discipline is the cornerstone of the learning organization, also the talent strategy for 21st century’s business, and comprehensive guideline for leadership diversity.

Is Social Business = Enterprise2.0 + Fifth Discipline

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Three-Step to Craft a Good Cloud Strategy

Today's business strategy is about business growth, cost effectiveness and risk management.     IT strategy is a critical component of business strategy at the age of digitization, and Cloud, now becomes significant consideration in IT strategy, therefore, it’s a strategic imperative for business to craft the effective cloud strategy and benefit business growth for the long term.

Through Good Strategy, Bad Strategy, we learned the three essential elements of strategy: A good strategy has an essential logical structure that being called the kernel, The kernel of a strategy contains three elements 1) A diagnosis of the situation 2) The choice of an overall guiding policy 3) The design of coherent action

We may follow the principles to make a good Cloud strategy kernel:

1.    Diagnose IT Challenges, Explore Cloud Opportunities

IT Challenges: Now many organizations spent 70%+of their resources on legacy infrastructure maintenance & operational projects, worrying about upgrades to hardware and software, IT has the reputation as cost center to play the role as firefighter or controller.

Cloud Opportunities:

A: CIO's roles should be more focus on the strategic side of IT rather than putting out operational fire, and this is where the biggest driver for cloud based services in the business environment.

B: What business problems does Cloud solve that can't be solved by more traditional forms of application and service delivery at a fraction of the cost (and perhaps risk)? As a business why would we choose cloud over some other service delivery technology

C: Does Cloud provide the right opportunities to get out of the non-value adding IT business as soon as possible and only a very few on-premises applications will be kept in the legacy format.

2.    Align Three Cloud Value Propositions to Leverage Choices with Guiding Policies

You need to understand your business, its needs and its operating constraints, before you make any decisions about moving things into the cloud. The potential value proposition via Cloud may include: IT integrate and orchestrate application & service via faster delivery and easy provisioning, with the new characteristics such as elasticity and transparency. Security and privacy are still the biggest concerns for Cloud, and private, hybrid cloud may well open the new chapter for IT to leverage the choice of cloud services and plan the journey.

A: Value Proposition

Cloud technology is a natural extension of commoditizing IT and that advances in network infrastructure...making internet access cheaper & faster directly facilitated offloading computing (hardware, software/services) to the cloud. From business perspective, we may ask:

·         How does Cloud profoundly change enterprise IT?

·         Can cloud deliver genuine benefits for our business?

·         What is the value proposition from a business perspective?

·         What are the business drivers that will lead to an investment in a cloud-based solution?

·         How do we sell the value proposition to the executive group when at the end of the day they really don't care how their applications are hosted or delivered?

·         In the long term: Is a cloud solution just going to end up costing our company more money because it has cost implications for legacy integration, disaster recovery, data management, security and network bandwidth?

B: Profit proposition

IT investment links directly to business outcomes. The challenge for CIOs will be to respond to this revenue-oriented demand while addressing the cost-cutting pressure that will remain. Based on those, the value proposition will guide the adoption plan for cloud ; the profit proposition will do detail cost benefit analysis for the specific situations/scenarios of the organization on use of SaaS, PaaS or IaaS. It must align with the overall goal and priorities. First determine why each service is necessary to your business, and ask:

• How much revenue does it generate?
• How often do your customers use it?
• What "bottom line" outcomes is it going to deliver for our business?
• What sort of costs over-and-above the purchase of the cloud capability are we going to incur in order to embrace cloud?
• Will we see a return on the total cost (direct and indirect) of cloud?
• Does it offer a service-level agreement (SLA) that goes beyond standard uptime promises guarantees response time levels (speed)?
• What part of the cloud will bring the best ROI to the organization?

C: People proposition

Cloud allows staff work anytime from anywhere to access necessary information to make faster decision, increase staff satisfaction, achieve better business continuity capability. The purpose of business is to create a customer, also engage employees, the management may need evaluate people proposition of Cloud by asking:

·         Does Cloud strategy allow us to serve our end customers better, faster?

·         Will our employees improve productivity via taking advantage of cloud base solutions?

·         Can Cloud help business achieve better business continuity capability?

·         Will Cloud truly promote DIY-Do It Yourself or BYOD-Bring Your Own Device culture, then essentially increase staff satisfaction?

·         Will Cloud help shape the future of business: borderless, timeless, wireless, agile & instant on?

3. From Strategy to Execution: Move into Cloud with Confidence  

1). ROI Analysis: Cloud based solutions should be included when evaluating new applications and infrastructure needs and of course a proper ROI analysis that takes into account all aspects of the TCO for the solution.

2). Make Choices: You need a strategy or business position around adoption of the cloud that is based on need and operating constraints. Which is the best model? Do you go fully SAAS or do you limit yourself  to IaaS or PaaS. Do you go public cloud, private cloud or a hybrid model?

3) Cost Calculation: You need to make sure you look at the full cost of implementing your cloud strategy, not just look at the cost of the cloud service itself but also all of those secondary costs that the vendors don't talk to you about

4) Bottom Line Benefit: Based on your chosen strategy, you need to confirm that implementation of your cloud strategy will ultimately deliver a bottom line benefit for your organization

5) Re-architecting home-grown apps to be truly cloud-based, and shifting to on-demand SaaS applications to replace on-premises packaged applications, integrating three elements of applications --getting access to resources, the development process and operating applications. IT operations will need to be restructured and automated to support cloud computing

6). Vendor Evaluation: You need to make sure that the service of a particular cloud provider will adequately meet the needs of your organization, that you fully understand the implications of going into the cloud, and you manage any risks around that, reach a comfort level with the Cloud Provider's commitment to availability and security

7). Cloud Architecture: The biggest part of the cloud architecture is in the use of the term to include both type (e.g. IaaS, PaaS, SaaS) and location (public, private, hybrid). It is incredibly important to expand your own answers to take all possible permutations into consideration because, if you don't, you are undoubtedly limiting yourself in terms of how you understand both the benefits and limitations of cloud computing as a component of IT strategy.

8). Three Gifts of Strategy: Adoption of cloud sourcing, with three gifts a) Mobile strategy, b) Cloud strategy & c) Social strategy. These allowed business to have level to innovate & create new revenues . These three strategies effect all other departments, and organization a whole.

9) Re-Imagine IT Finance: IT organization that must be rebuilt for cloud computing is finance. The opaque, inflexible and highly lumpy forms of IT cost allocations will no longer be effective in an environment where alternative providers publish price lists on the Web. CIO & CFO may need work collaboratively to have the new mindset about OpEx vs. CapEx & IT finance.

 10) Enterprise Governance Discipline: Cloud environment converge IT governance and business governance as a holistic management discipline,  to overcome the "shadow IT" obstacle (the business dep. order their own cloud base solution, bypassing IT., etc), enterprise data, process, application, asset need be well managed beyond business’s own firewall and physical boundary, security, governance, risk control and compliance effort need be well integrated into an end to end solution.

Sure, Cloud is a journey, the verb, than a non, cloud strategy as part of business strategy, need be well translated and executed via leveraging business priority and governance, beyond cost, the goal is to focus more on IT capability & capacity via integration & orchestration, and put emphasis on innovation and strategic application investment.

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Five Criteria: Good Strategy vs. Bad Strategy

The book: Good Strategy/Bad Strategy: The Difference and Why It Matters, by Richard P. Rumelt well articulated the most basic idea of strategy which is the application of strength against weakness. Focus on one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action; from leadership perspective, an important duty of any leader is to absorb a large part of that complexity and ambiguity, passing on to the organization a simpler problem—one that is solvable.

What are the kernel of good strategy, why are so many bad strategy? Here are five criteria:

1.      The Three Essential Elements of Strategy:

A good strategy has an essential logical structure that being called the kernel, The kernel of a strategy contains three elements:
1) A diagnosis of the situation
2) The choice of an overall guiding policy
3) The design of coherent action

2. The Core of Strategy:

Discover the critical factors in a situation and design a way of coordinating and focusing actions to deal with those factors. a bad strategy that tries to cover all the bases rather than focus resources and actions. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component

3.   Key Difference between Good Strategy & Bad Strategy:

 A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them,  a bad strategy tends to skip over pesky details such as problems, also ignores the power of choice and focus. Strategy must contain action.

4.      A good strategy is unexpected.

An insightful reframing of a competitive situation can create whole new patterns of advantage and weakness. The most powerful strategies arise from such game-changing insights.  Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.

 

5.      Three-Step Strategy Making:

1) Figuring out the nature of the business challenge
2) Designing a guiding policy that produces an advantage
3) Creating a set of coordinated actions to carry out that policy.

The contemporary business world and global history that clearly show how to recognize the good, reject the bad, and make good strategy a living force in your organization

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Five Take Away: Treasure Hunting in Blue Ocean

“In Blue Oceans, demand is created rather than fought over. There is ample opportunity for both growth and profit.”  W. Chan Kim & Renee Mauborgne

Blue Ocean Strategy written by: W. Chan Kim & Renee Mauborgne is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000), The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.

As an integrated approach to strategy at the system level, BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index., etc. Here are five take away:

1.     Six Path Framework

Path 1 : Looks across alternative industries

Path 2 : Looks across strategic groups within industry

Path 3 : Redefines the industry buyer group

Path 4 : Looks across complementary product and service offerings

Path 5 : Rethinks the functional –emotional orientation of its industry

Path 6 : Participates in shaping external trends over time

2.     Three Building blocks,  Four Actions Framework

A: The three key conceptual building blocks of BOS are:

1)      Value innovation

2)      Tipping point leadership

3)      And fair process

          B: Four Actions Framework + Eliminate/Reduce/Raise/Create Grid

The four actions framework offers a technique that breaks the trade-off between differentiation and low cost and to create a new value curve.  It answers the four key questions of:

1)      What industry takes for granted and needs to be eliminated;

2)      What factors need to be reduced below industry standards;

3)      What factors need to be raised above industry standards;

4)      And what should be created that the industry has never offered

3.  PMS Map, Three Tiers of Noncustomers

A.  Pioneer-migrator-settler (PMS) map

Corporate management team pursuing profitable growth can plot the company’s current and planned portfolios on a pioneer-migrator-settler (PMS) map.  This strategy can help a company determine which businesses experience the highest and lowest growth and cash flow.  These are classified accordingly with the highest growth potential being pioneers, then to migrators, then to the lowest rung, settlers

B.     Three Tiers of Noncustomers

There are three tiers of noncustomers that can be transformed into customers.  They differ in their relative distance from your market.

1)       The first tier of customers minimally buy an industry’s offering out of necessity. 

2)      The second tier of noncustomers refuse to use your industries offerings. 

3)      The third tier are noncustomers who have never thought of your market’s offerings as an option

4.   Three Strategy Propositions, Four Organizational Hurdles:

A: Align the three strategy propositions:

1)        Value proposition,

2)        Profit proposition

3)        People proposition

B: Four Organizational Hurdles to Strategy Execution

1)      Resource Hurdle: Redirect resources from hot spots and cold spots.

2)      Cognitive Hurdle: Meet with the customers. get involved

3)      Political Hurdle: Secure a consigliore on your top management team.  Leverage your Angels  and silence your Devils

4)      Motivational Hurdle: Zoom in on King pins. Place King pins in a fish bowl. Atomize to get the organization to change itself

 

5.     The Six Principles of Blue Ocean Strategy

1)      Reconstruct market boundaries

2)      Focus on the big picture, not the numbers

3)      Reach beyond existing demand

4)      Get the strategic sequence right

5)      Overcome key organizational hurdles

6)      Build execution into strategy

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