Strategic Business Architecture Helix(TM) Framework

T H E F R A M E W O R K F O R S U C C E S S F U L D E V E L O P M E N T A N D I M P L E M E N T A T I O N O F O P T I M A L E N T E R P R I S E T A R G E T O P E R A T I N G M O D E L S

Copyright © 2016 Kirill Derevenski | www.strategicbusinessarchitecture.com

STRATEGIC BUSINESS ARCHITECTURE is

the product and a process of contextualising, designing and implementing optimal enterprise Target Operating Models


As the product, Strategic Business Architecture unites form and function of the enterprise organisation. It depicts Target Operating Model blueprints, key processes and associated governance structures – optimally developed to address business environment and objectives. Because all companies are unique,

OPTIMAL TARGET OPERATING MODELS ARE AS DIFFERENT AS BUILDINGS (and ideally as elegant as the best of them)

AN OPTIMAL TARGET OPERATING MODEL SHOULD SATISFY THREE PRINCIPLES: BE EFFECTIVE – SENSIBLE AND FIT TO DELIVER ON COMPANY’S STRATEGIC OBJECTIVES BE EFFICIENT – WITH CLEARLY DEFINED PROCESSES AND RESPONSIBILITIES TO SERVE ITS PURPOSE BE RESPONSIVE – FLEXIBLE TO RAPIDLY ADJUST TO CHANGES IN INTERNAL AND EXTERNAL CONTEXTS


STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK USES FORMALISED METHODOLOGIES TO RELATE ENTERPRISE EXTERNAL AND INTERNAL CONTEXTS TO ITS BUSINESS OBJECTIVES AND BUILD AN OPTIMAL TARGET OPERATING MODEL. IT THEN FACILITATES SUCCESSFUL ORGANISATIONAL TRANSFORMATION THROUGH TRANSITION PLANNING AND ORCHESTRATION OF CHANGE MANAGEMENT ACTIONS

INDUSTRY

CONSUMER

POLITICAL ECONOMIC

ORG.

ENTERPRISE BUSINESS MODEL

TARGET OPERATING MODEL

IMPLEMENTATION PLANNING

CHANGE MANAGEMENT

Copyright © 2016 Kirill Derevenski | www.strategicbusinessarchitecture.com | Triangle image design by Freepik.com

STEP 1. CONCEPTUALISATION means

accurately grounding any future Target Operating Model within the organisation’s external and internal contexts, making it

optimal for that company


ORGANISATIONAL CONTEXT

CONSUMER CONTEXT

INDUSTRY CONTEXT

STRATEGIC BUSINESS ARCHITECTURE TAKES INTO ACCOUNT KEY EXTERNAL CONTEXTS – IN ADDITION TO THE ENTERPRISE BUSINESS MODEL AND ITS ORGANISATIONAL BACKGROUND – TO BUILD AN OPTIMAL TARGET OPERATING MODEL WHICH CAPTURES PRAGMATIC CHOICES AND SOLUTIONS TO STRATEGIC NEEDS FOR THAT COMPANY

POLITICAL AND/OR

ECONOMIC CONTEXT

TARGET OPERATING

MODEL

SCALABILITY AND RESILIENCE

FLEXIBILITY AND AGILITY

RESPONSIVENESS AND RELEVANCE

CAPABILITY AND ABILITY

ENTERPRISE BUSINESS MODEL


TARGET OPERATING

MODEL Architectural alignment

BUSINESS MODEL

Present/future growth and productivity strategies

MISSION Fundamental purpose of the company and how it aims to achieve its vision

VISION Direction of travel and long-term view of the

company

VALUES Guiding principles and

fundamental beliefs that govern company’s actions

STARTING WITH THE VALIDATION OF THE ENTERPRISE BUSINESS MODEL AND ITS GROWTH AND PRODUCTIVITY STRATEGIES, STRATEGIC BUSINESS ARCHITECTURE DEVELOPS A VISION OF THE CAPABILITIES AND BUSINESS VALUE TO BE DELIVERED AS A RESULT OF THE OPTIMAL TARGET OPERATING MODEL’S INTRODUCTION


REFLECTION OF WIDER POLITICAL AND/OR ECONOMIC CONTEXT ENSURES UP- AND DOWN-SCALABILITY OF THE TARGET OPERATING MODEL AND ITS RESILIENCE TO CRISES AND CYCLES. IMPACTFUL RELATIONSHIPS THAT EXIST BETWEEN DIFFERENT INDUSTRIES WITHIN THE BROADER ECOSYSTEM ARE ALSO CAPTURED

SHORT TERM MEDIUM TERM LONG TERM

§  FACILITATION OF NEW CAPABILITY INTEGRATION

§  CLARITY FOR CARVE-OUT §  MODULARITY AND SELF-

CONTAINMENT FOR UP-/DOWN-SCALING

§  BENEFIT FROM INTER-INDUSTRY DYNAMICS

Target Operating Model (caeteris paribus)

Target Operating Model (context-aware)

Target Operating Model (context-aware)

SCENARIO A

Context-aware Target Operating Model is developed and deployed. Organic changes in the ecosystem that are naturally occurring are taken into account

As milestone event(s) take(s) place, context-aware Target Operating Model is dynamically adjusted

Through external context awareness, Strategic Business Architecture expands horizons so that the resulting Target Operating Model copes successfully with ecosystem’s uncertainties and change

ILLUSTRATIVE USE OF SCENARIO PLANNING IN THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK


REGARDLESS OF A B2B OR A B2C FOCUS, MASTERY OF FINAL CONSUMER CONTEXT ENSURES RESPONSIVENESS AND SERVICE ORIENTATION OF THE TARGET OPERATING MODEL THROUGH APPROPRIATE ORGANISATIONAL DESIGN, CLEAR INTERCONNECTED PROCESSES, AND TECHNOLOGY AND DATA SPECIFICATIONS

CONSUMERS TARGET

OPERATING MODEL

CONSUMER TRENDS AND BEHAVIOURS… §  Brand/quality/image perceptions §  Alternative choices §  Lifestyle preferences §  Societal beliefs §  Information needs §  Communication requirements §  Attitudes to digitalisation

…THAT DRIVE STRATEGY... §  Vision and Mission §  Strategic objectives §  Strategic choices

…AND BUSINESS MODEL... §  Value proposition §  Revenue streams §  Cost bases

…ARE REFLECTED IN THE TOM §  Capabilities/functions §  Processes §  Governance §  Infrastructure §  Data §  Safety/Security


COMPETITION MOVES Established players Wild cards New entrants from other industries

OUTER SPACE

WHITE SPACE

NEAR-CORE SPACE

CORE SPACE

TARGET OPERATING MODEL

INDUSTRY CONTEXT CONTRIBUTES TO DESIGN OF AN OPTIMAL OPERATING MODEL THAT SUPPORTS MONITORING AND DEVELOPMENT OF OPPORTUNITIES THROUGH ITS FLEXIBILITY AND AGILITY OF RESPONSE, AND INTERCONNECTIVITY TO CHANNEL KNOWLEDGE, EXPERIENCE AND RESOURCES TO WHERE NEEDED

REGULATORY OVERSIGHT Labour legislation

Financial regulations Health/Safety/Environmental

requirements

INDUSTRY DYNAMICS Consumers (directly and indirectly)

Clients/Distribution channels Suppliers/Vendors Partners/Investors

Other industries

TECHNOLOGICAL ADVANCES Digitalisation Knowledge diffusion Information accessibility Media proliferation

FLEXIBILITY

AGILITY

INTERCONNECTIVITY

BUSINESS DEVELOPMENT SCANS


ORGANISATIONAL CONTEXT IS A SOURCE OF PRAGMATISM FOR THE TARGET OPERATING MODEL. IT SUPPLIES UNDERSTANDING OF ORGANISATION’S BASELINE CAPABILITIES, ITS COLLECTIVE MEMORIES AND CULTURE, AND ITS INNATE ABILITY TO ADAPT TO CHANGE NECESSITATED BY THE OPERATING MODEL’S REDESIGN

ARCHITECTURAL SIGNIFICANCE

WIL

LIN

GN

ESS

TO P

URS

UE

KEEP

and manage distractions to stay focused on

important deliverables

ANCHOR

and re-emphasise benefits to build up ownership of

the target model

REMOVE or postpone for later

review

CHALLENGE stakeholder concerns or

organisational capabilities to

understand key reasons for resistance

TARGET OPERATING MODEL n Realistic in scope n Functional in implications and

implementation

ILLUSTRATIVE USE OF A KAIZEN-INSPIRED APPROACH IN THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK

H L

L

H

COMPANY BASELINE CAPABILITIES MEMORIES CULTURE EXPERIENCE

‘CLEAN SLATE’ ORGANISATION


STEP 2. PLAN & DESIGN covers

the development of detailed architectural designs and operational blueprints of the target operating model and its

intermediary states


ULTIMATELY, STRATEGIC BUSINESS ARCHITECTURE TRANSLATES ENTERPRISE BUSINESS MODEL AND ITS EXTERNAL AND INTERNAL CONTEXTS INTO TARGET OPERATING MODEL, A SET OF ACTIONABLE BLUEPRINTS THAT CREATE COMMON VIEWS AND UNDERSTANDING OF THE ‘WHY’, ‘WHAT’ AND ‘HOW’ ACROSS THE ENTIRE COMPANY

CLIENT RETENTION

STRATEGIC BUSINESS OBJECTIVES (e.g. shareholder/stakeholder value)

ILLUSTRATIVE USE OF CUSTOMISED STRATEGY MAPPING AND TOGAF ADM IN THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK

PRODUCTIVITY STRATEGIES GROWTH STRATEGIES

COST OPTIMISATION CROSS/UP SELL NEW DEVELOPMENT

CLIENT SATISFACTION SERVICE/OFFER PORTFOLIO SERVICE/OFFER AVAILABILITY

KEY INTEGRATED CROSS-ENTERPRISE PROCESSES (e.g. Sales, Contract management, Mobilisation, Investment, HR…) AND DELEGATIONS

SERVICE ORIENTATION SERVICE/OFFER INNOVATION

BU

SIN

ESS

MO

DE

L TA

RG

ET

OP

ER

ATI

NG

MO

DE

L

TARGET ORGANISATION ARCHITECTURE •  Execution capabilities and partnerships •  Business support functions •  Organisation structure and governance •  Roles and responsibilities •  Shared objectives and KPIs

TARGET INFORMATION SYSTEM ARCHITECTURE •  Data architecture •  Application architecture

TARGET TECHNOLOGY ARCHITECTURE •  Components and platforms •  Performance and maintainability •  Environments and locations •  Hardware and networks


DEPENDING ON DESIGN NEEDS, THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK BUILDS ON SERVICE ORIENTED ARCHITECTURE PRINCIPLES TO ENSURE SMOOTH DELIVERY OF INTERACTION AND SERVICE ELEMENTS OF THE TARGET OPERATING MODEL

OPERATING UNIT 1

OPERATING UNIT 2

OPERATING UNIT 3

SHARED SUPPORT FUNCTIONS (HR, FINANCE ETC)

SLA A

SLA B

SLA C


STEP 3. TRANSFORM orchestrates

managed transition to the Target Operating Model through meticulous yet flexible planning, stakeholder monitoring and

proactive change management actions


TARGET OPERATING

MODEL

THROUGH STRUCTURED APPROACH TO THE TARGET OPERATING MODEL’S ROLLOUT, AGREED GOVERNANCE, STAKEHOLDER MANAGEMENT PLANNING AND PROGRESS MONITORING, THE STRATEGIC BUSINESS ARCHITECTURE ANSWERS CRITICAL CHANGE QUESTIONS, PROVIDES TRANSPARENCY AND STREAMLINES BUSINESS TRANSFORMATION ACROSS THE ORGANISATION

SPEED OF ADAPTATION §  How long should it take to

transition to the target model? §  Can we go faster or need to slow

down in some areas?

COMPLIANCE OF ADAPTATION §  How to ensure that we are getting the agreed

target model by the end of transition?

COST OF ADAPTATION §  How to make the change affordable? §  What are the plans not to lose existing

clients or new business opportunities during transition?

§  Are our teams on-board?

SHORT TERM MEDIUM TERM LONG TERM

CHAN

GE

AND

STA

KEH

OLD

ER M

ANAG

EMEN

T


ADVANTAGES OF APPLYING THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK

•  This comprehensive framework clearly defines stages of translating corporate strategies into optimised operating models through flexible architectural solutions, which allows an accurate estimate of the degree of effort required.

•  This is an inclusive framework covering business, organisational, and technological aspects of the modern enterprise. Analysis of architectural alternatives makes sure that there are no stones left unturned in search of optimisation for the target operating model.

•  This is a change management-aware framework that deals not only with structures and systems, but also with the people aspects of the transformation equation.

•  This is a delivery-focused framework that has governance, issue escalation, and resolution mechanisms built in to ensure the successful transformation journey.

THE STRATEGIC BUSINESS ARCHITECTURE HELIX™ FRAMEWORK HAS BEEN DEFINED, REFINED AND TESTED ON A NUMBER OF PROJECTS RANGING FROM BUSINESS UNIT OPTIMISATION TO A COMPLETE REDESIGN OF A TARGET OPERATING MODEL FOR AN ENTIRE GLOBAL COMPANY. ITS BENEFITS OF REALISATION OF STRATEGIC DECISIONS WITH MAXIMUM EFFICIENCY ARE APPLICABLE TO FOR- AND NOT-FOR-PROFITS ALIKE


KIRILL DEREVENSKI

e: [email protected] l: www.linkedin.com/in/derevenski

w: strategicbusinessarchitecture.com


Strategic Business Architecture Helix(TM) Framework

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