Tag Archives: strategy-to-execute

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Business Architecture, where to start?

Category:Business Architecture,digital transformation Tags : 

Business Architecture – the internal or the external game?

Business Architecture (BA) is typically referred-to as one of the architecture disciplines, the “business-side” of enterprise architecture (EA).

Where enterprise architects primarily focus the entire organisation at a more holistic level (the “whole”), bridging concepts to planning, the business architect primarily focus on the business-side of EA.  Where Enterprise Architecture is the holistic view of strategic planning, optimisation of systems, and optimisation of technologies through the investment processes and structured governance, Business Architecture is a key component, as the purpose of any digital effort relates back to the purpose of the business and the target states to achieve, strategically or tactically.

Clearly, the concerns of stakeholders of business operations will be around tactical demands, strategic changes of the business, where architectural input is needed to structure development around offerings to attract the market.

Now, in this effort, we typically see two different perspectives of how to solve this in practice. One is externally focused, outside-in. The other is internally focused, inside-out. They are both motivated, although though the deliverables will become different.

Outside-In:

In the externally focused BA-work, focus is on the market and the purpose of the business operations. This is where the market is analysed and described, so it becomes clear where to invest more. This we do not see from a capability map. A capability map will articulate where in the business we should put more effort, but it does not map to the market. In the externally focused BA-work, we address the markets, segments, type of customers that adopt the offerings of the business.
The role of the business architect is to act in the outer game to support the purpose of the business with tactical and strategic input to succeed in the market. It is with reference to Porter’s work, SWOT and analyses the business architect provides a business lens to the EA artefacts and secure in dialog with stakeholders the alignment of strategic and tactical initiatives and demands.

Inside-Out:

In the Internally focused BA-work, focus is on the “where” in our value streams, or business capabilities or business processes do we find the tactical initiatives and demands; essentially with the main purpose to tackle the alignment between plans and change, do we see enough and the correct prioritization; then to align on the tactical and strategic initiatives.

In other words, the business architect in the internal game, will be focused mostly on capability maps and value streams, eventually via business process maps, as these models are more conceptual and easier to communicate within the business, but it implies a change in the offerings and market, but is somehow deducted and more implicit than to win the outer game.

As many businesses still struggle to articulate a common language to the business architecture, the main effort in starting the EA-work of the business, often boils down to get a common language of terms and metadata to use, like to identify the stakeholders, offerings, offering models or product groups, business capabilities and business capability maps, not to mention value streams and value stream steps, that will connect nicely to capabilities and internal business processes. Much of this is largely seen as EA-work, but the dialog, the alignment and consistent focus on getting this information right in tight alignment with many stakeholders of different parts of the business, is largely seen as provided by business architects.

Whether BA-work starts outside-in or inside-out is largely a stakeholder and time-consideration, but to some degree also a cultural consideration. Eventually, the EA repository should be alive with fresh relationships that help BA’s drive alignment to the demands and initiative process with business management; but equally, it also ties into the core of change, whether changes happen through people and skills, or through market analysis and planning. Both routes will target better alignment, better alignment between the business operations and the business purpose, tactically as strategically. This input is the major source of input to successful investment planning and digital planning.

To make a strategy executable, we need to decompose it into the inner game and the outer game. These terms are re-used from leadership schools. These two games represent two different perspectives that will supplement or compete the alignment of business architecture. The Outer Games is by definition the external perspective of ‘what is possible’. The Inner Game has a focus on the existing organization and competencies, hence ‘what can we do better’.

Enterprise Architecture is often described as four overall processes, where the digital planning of initiatives is the core engine catalyzed by the strategic, business and systems/technology  alignment. Or put in context, there would not be the business alignment of EA initiatives, if there was not any BA’s on the team.

Digital transformation (as when transforming the business from one set of offerings to another one) is clearly best solved with an Outside-in perspective, whereas digitalization (where the processes are the same, just done smarter) very often is best provided using an inside-out perspectives.

Finally, two games are related like strategy to culture, like Yin to Yang, like innovation to operations. They cannot live without each other, but they also represent opposite purposes. The purpose of the outer game is to follow principles of the Porter school, how to create a future into the market. As opposed to this, the inner game focuses on what can we operate, what can we do better, to fit with our capacity, our skills our collective win.

We help organisations to align long-term planning with short-term planning; check out next-insight if you look for a modern SaaS tool that can do the job. Business Architecture work and Enterprise Architecture work are easily supported in a cloud-native solution,  next-insight . We provide advisory and solutions to business architecture and enterprise architecture. As a advisory and consulting house with senior profiles in digital planning and enterprise architecture, we can offer cutting edge technology to accelerate your work with value creation from business architecture management!

 


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Playing and planning with a Digital Twin

Category:EA,UK Blog Tags : 

We continuously elaborate on the direction that Enterprise Architecture is taking. Recently we found the inspiring presentation from Gartner  and Marc Kerremans, talking about the construct of a ‘digital twin’ as a new and emerging concept:

“A digital twin is a dynamic software model of a thing or system that relies on sensor and/or other data to understand its state, respond to changes, improve operations and add value. It includes a combination of meta-tada, condition or state and event data”
Marc Kerremans, Research Director.

This is interesting, as it puts focus on the ingredients of meta-data to provide a better future set of operations. So a ‘thing’ is no longer a computer…  A ‘thing’ can be an organisation, a performance, a situation, or a value. It simply becomes borderless, see also Gareth Morgan’s 8 metaphors. And there is certainly a potential to apply the known practice from adaptive control theory, where there is a blend of digital models and physical measurements which can be compared, optimised, and used for improved performance.

The basic idea of a digital twin is hence back to classic cybernetics, it is to let “play” and “observe” at the same time. The real system plays it the traditional way with lots of data, but behind the scene, the digital twin is “observing” using a simpler model; and eventually, this will create new controls. Some of the core material by Karl Johan Åström and Björn Wittenmark go back fifty years, describing how dynamic models relying on the external sensor and/or other data can be modeled  with a known distinction to

  1. System identification and adaptation (getting the model parameters),
  2. Filtering (getting the states), and
  3. Control (adjusting the input) based on different predictive horizons and criteria.

Would it be possible to apply Kalman filtering to improve the response of a digital twin? Why not! The idea of a digital twin is to apply systems thinking to the organisation so that the organisational performance is considered a system, which can be modeled with states and parameters, and which is likely a stochastic and non-linear system with many inputs and many outputs. Is it controllable? Is it observable? What type of model would we end up with?

Clearly, it will be a hybrid model where finance or sales is easier to measure and forecast than a lot of other performances – and likely as well, where no digital twin is one-size-fits-all, they will be tailored to specific use-cases. Where the digital twin is mostly focused on the prediction, it will benefit from the updated set of data which is also part of the living architecture.

So, the trajectory is to move the digital twin more into the direction of information management, where information models are established, and where statistical properties of the core behavior are turning measurable, so that with data-lakes and big-data that we can start to model and identify the dynamic models of the enterprise – rather than to see a bunch of tables. Not necessarily an easy task, but as stipulated by Gartner, the purpose is to provide better planning to lower the risk of fact-based decisions. With a digital twin of an organisation, we can measure the input/output of an organisation, and we can forecast how it would develop. The adoption of digital twins will likely lead to models that can be used for simulation and forecasting.

The Internet of things (IoT) provides a bigger and larger system where the business operating model at heart to us should include performance measures and measurements of many variables. And to apply this in a business context, the target is to find an algorithm to forecast and optimize the predictions given different types of input.

There are, however, different grey zones in this concept to get it fully operational.

  1. One is the cultural shift that one needs to consider.
  2. Another one is the statistical models to be applied, how and what,
  3. A third and not the least, the choice of ‘states’ and ‘parameters’ of the model, a model is typically known as the business operating system (BOS).

We advocate to start the journey towards enabling a digital twin by three simple steps:

  1. Identifying the ‘meta-data’ initially to provide a logical layer of how an organisation is connected from suppliers to clients,
  2. In the second phase to apply states and parameters to consume measurements to connect the dots of the BOS.
  3. With a focus on dashboards, outcomes and KPI’s this brings the third phase to compare targeted and measured values. This is what essentially is the fuel for the digital model to optimise your fact-based input to the strategy-to-execution.

The scenario-based planning may be accelerated by these kinds of models. Use a digital twin of an organisation to help your business leaders to minimize the risk of new growth. We advise beginning with the logical layer. This is where fly-by-wire dashboards can be produced for guiding your business journey. This is where the digital twin should be used to maximize business outcomes. The importance is the act of digital planning as well as the precision of the models. If you are interested in technology supporting a digital twin of your business, we can help you! Don’t build it yourself, there are emerging technologies supporting big data and digital twins.