Business Value Networks And Information Technology V5

Business Value NetworksEnterprise Architecture

Leveraging TOGAF Architecture Development Methodology

Challenge

• Problem Description• Examination & Analysis• Solution

TOGAF

• The Open Group Architecture Framework (TOGAF) is a framework - a detailed method and a set of supporting tools - for developing an enterprise architecture. It may be used freely by any organization wishing to develop an enterprise architecture for use within that organization

• TOGAF was developed by members of The Open Group, working within the Architecture Forum (www.opengroup.org/architecture).

Focus on Value

Focus on ShareholderValue

Shareholder Value

• The use of well-managed value networks, in summary, allows enterprises to tremendously leverage all the resources at their and their collaborative partners’ disposal: capital, human resource and information technology resources. Further, it does so at a lower effective cost of transactions, with the potential for higher quality, and the ability to get a far greater economic return on the resources used than was previously possible.

Don’t Boil The Ocean – Prioritize on High Shareholder Value Areas & Iterate

Business Area or Division Priority 1

Business Area or Division Priority 2

Business Area or Division Priority 3

Understand Network Vision

Understand Business Network Vision

Vision Overview

• Strategically need to transform the business from a traditional enterprise to a value network which extends the ability of the enterprise to conduct transactions beyond the company to include suppliers, business partners, customers and other parties of interest.

Evolution toward Business Networks

E-BusinessesGoogle,Amazon,

Ebay,Etc..

Traditional Fortune 500Exxon MobilMcKesson

GEEtc..

BusinessNetwork

Bu

sin

ess

Pro

cess

In

teg

rati

on

Information Processing Centric

IncreasedBusinessModularity& Agility

Develop Business Value Network Architecture

Understand the BVNBusiness Architecture

Diagnosis Before Treatment

• It is essential to understand the nature of the business value networks problem before identifying any technology solutions.

• Successful solutions are predicated on correct examination and analysis of the problem.

• Successful solutions are also predicated on realistic assessments of constraints and opportunities.

Understanding The Value Network Business Architecture

• The strategic business map of how value is to be delivered between the enterprise and its partners to intermediary and end-customers through a business network (public/private wireless) and how the enterprise measures the effectiveness of this delivery system and its end results.

• The network roles and relationships, defining the central role of the business value network manager, the cascading relationships with market managers, customer managers, customers, the service provider manager and the network and content service providers.

• Parties and roles, outlining who is responsible for what and the protocols of how transactions will be conducted.

• Roles and product relationships, outlining principally the roles and duties of the network service provider and the content service provider.

• Product and service management, the business value network platform, outlining how the various components of the network will interact and deliver the product content and the financial value (billing/payment).

• Execution process overview, outlining how the whole business value network will operate end-to-end.

• Measuring performance, outlining how from the point of order through cash collection the system will operate in terms of cycle-days, revenue generated and cost incurred (yielding an operating margin contribution for the entire process).

The Business Value Network Model

Customer

ProvidesNeeds

Customer ManagerBrokers Solution

Solution

Solution consists of a packageof products & services

Uses tradingto fulfill the

needs

Service providers fulfill customer solution

Service Provider

Service Provider

Service Provider

ElectronicMarketplace

Market Manager Organizes& Manages The Market

SolutionDelivery

Coordination

Key Roles In The Business Value Network

Customer Manager

SolutionBroker

SolutionBroker

ServiceProvider

SolutionBroker

SolutionBroker

ServiceProvider

MarketManager

BVN Manager Manages Multiple Market Managers

The Business Value Network

MarketManagerManagesThe Market

CustomerManagement

SolutionConfiguration

Trading

SolutionDelivery

SolutionAssembly

SolutionSettlement

CUSTOMER CUSTOMER SolutionSettlement

Business Value Network BVN Solution Management

BVN SettlementBVN Quality andService Management

Product / ServiceCommodity Trading

Product / ServiceCommodity Trading

Product / ServiceCommodity Trading

Marketing Network Customer Management

BVN Execution Pr ocess Overview

Model:Dynamic Networks

Business Dynamics ModelBVN Execution Process Overview

For Process Process Flows

Last Updated: 6/24/99 15:15

CustomerReferral ProviderProcessing

Customer CreditManagement

CustomerMarketingManagement

Customer SolutionConfiguration

MajorCustomerEventOccurs

PeriodicCustomerGroupMarketing

ExistingCustomer HasNew Needs

CustomerOngoingNeed Trigger

PostingRedefine Posting

Searching

Negotiation

Posting

Searching

Negotiation

Posting

Searching

Negotiation

SolutionAssembly

"Total Solution" (bypass Trading)

Solution NotSatisfied -Redefine Needs

SolutionDelivery

Defaulted Delivery-Retrade Product/Role

Retrade ondefaultedproductcomplete

Define Solution within a Solution

I ssue andDisputeManagement

Quality DataAcquisition

SolutionSatisfactionReported

SettlementStatementProcessing

SolutionSettled

Super Marketing NetworkCustomer Management

MajorCustomerEventOccurs

PeriodicCustomerGroupMarketing

ExistingCustomerHas InfoChange

Cust EntersBVN viaCustReferralProv

Customer CreditManagement

CustomerEnters BVNvia SuperMktg Ntwk

CustomerMarketingManagement

CustomerGeneralI nformationManagement

CustomerMarketingCompleted

Cust EntersBVN viaCustReferralProv

CustomerGeneralI nformationManagement

CustomerMarketingCompleted

Customer/ ServiceProvider I ssueResolved

Dynamic Networ ks

Best Practices: more “knowledge-workers” requires better collaboration

Recently, from The McKinsey Quarterly: “For many employees today, [25 to 50 percent of

any workforce], collaborative, complex problem solving is the essence of their work.”

Collaboration “capabilities do not resemble IT systems or reengineered processes that can be copied easily – their power lies in the collective company-specific knowledge that emerges over time.”

According to a recent article entitled: “Meetings Around the World…”, by Frost & Sullivan, collaboration is a key driver of overall company performance. Its impact is: Twice as significant as a company’s aggressiveness

in pursuing new market opportunities (strategic orientation)

Five times as significant as the external market environment (market turbulence)

Nature of Business Networks = Change – Implies IT Flexibility

• Rapidly Evolving Marketplace resulting in:– A steady flux of new and departing business partners– A changing set of roles both internal and external– A steady change in products & services– Human Processes changing dynamically– Technology supported processes changing

dynamically– Increasingly complex information worker environment

Plug-in, Leverage & Add

Principles:• Plug-In to existing &

emerging “information & process pipes”

• Leverage existing Assets

• Identify new components to add

What is an Architecture

• Conceptually an IT Architecture– The fundamental organization of a system

• It’s components• Their relationships to each other and the

environment– The principles of governing it’s design and

evolution• Practically it is represented in architecture

descriptions from the viewpoint of the stakeholders

“As Is” - Realistic Appraisal of the Current IT Situation

• Complex Current IT Situation– No IT situation is ever ideal– Often no significant investment since “the dot com

era”, resulting in an aging IT infrastructure– Architecture lynch pinned on aging ERP– Little internal, let alone external integration– Limited internal IT capabilities– Recognition that large IT problems are hard to

implement successfully– Could spend 100 years fixing current situation

Constrain the “To Be”• Not possible to “rewire” the entire enterprise IT

infrastructure or industry– PRINCIPLE: Must find way to “plug in” to emerging IT and

Process Pipes• Rewire industry is not realistic (remember the B2B Dot Bombs?)• Must link in where possible to existing industry process &

information “pipes” and “standards” and determine how to use these to enable your business network

• Must leverage and add value to these pipes– PRINCIPLE: Leverage and extend existing assets while

supporting new direction• Rewire company is too costly and too risky• Must search for existing assets that can be extended• Must continue to support current business• Must identify realistic and practical IT investment options for

business to refactor current assets

Connecting to Industry Architectures is Becoming Critical –

Not Just Your Industry

TOGAF Enterprise Continuum

Understanding andconnecting into MultipleIndustry Architectures

Define Architecture

• Lynch Pin solution blueprint on core existing applications and plug ins to existing or emerging industry “pipes”

• Identify missing components and how they need to be integrated– Business Network Directory– Business Network Process Management– Business Network Collaboration and information sharing– New external SOA services– Flexible Integration framework– New SOA services required on top of existing core applications

Architecture

Business Network Services Communications

BusinessNetwork

CollaborationServices

BusinessNetworkProcess

CoordinationServices

BusinessNetworkCommonServices

Customer& PartnerServices

ERP Services

Business Network Solution

Lynch Pin solution blueprint on core existing applications, adding new components and plugging into existing or emerging industry “pipes”

Solution Example

Business Network Services Communications

BusinessNetwork

CollaborationServices

BusinessNetworkProcess

CoordinationServices

BusinessNetworkCommonServices

Customer& PartnerServices

ERP Services

SAP R/3

Industry standard Services Exposed to Business Network

Sharepoint2007

SAP CCBPM

Off The Shelf/Custom

Heterogeneous

Migration Planning

Principles:Plug-In to existing & emerging “information & process pipes”Leverage existing Assets

Plot Path to Strategic Business Value

Path to Strategic Business Value

PeopleSelf Service

PeopleEmpowerment

TeamCollaboration

& Services

Process Efficiency Process Flexibility Business Model Innovation

CollaborationFoundation

CollaborationNetwork

CollaborationNetwork

Advanced

Business ValueNetwork

Tactical Approach

Strategic Approach

Inte

grat

e

Com

pose

Mod

elEvolve IT

Infrastructure

EvolveBusinessPractices

Value

Effi

cien

t F

unct

ions

Ser

vice

Orie

nted

Dyn

amic

Net

wor

k

EvolveOrganization

StrategicExecution

Solve Real Problems

• Extend current “core” applications with additional business value network components focused on solving specific business network problems– Building technology solutions without concrete

requirements usually not a good idea– Architect based on solving tangible problems

while maintaining key architectural flexibility required in order to continue extending the solution

Draft Strategy Timeline.

BusinessNetwork

Model-DrivenNetwork

Yr1 Yr2 Yr3 Yr4

Collaboration Foundation

Collaboration Network

Yr4 -

Migration Planning

Governance & Architecture change mgt is a key collaboration process in the network