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Lying to the boss

This entry is part 1 of 31 in the series Defining words

If an executive walks into the room and asks us what we are talking about then evasive maneuvers are in order.  Let’s say: “Oh, we are covering a number of topics.”  Or, if that doesn’t work then we’ll lie:  “We are brainstorming ways to do more with less.”

But please let’s agree here and now that we do not admit that we are arguing about the difference between a “lead” and a “sales opportunity”.  See, there is no time for “defining words” in the project plan.

And this is essentially why Information Architecture is most likely not the shortest path to the corner office.

My recommendation is to build Information Architecture to-do’s into other tasks.  If you have a WBS code (or even a task) for Information Architecture then that will raise an issue:  Sponsors don’t want to pay for that.  But don’t build it into “IT Strategy”.  They won’t want to pay for that either (until they are asked if they have one in a board meeting).

I recommend that you build Information Architecture into something named like “Integration”.  Sponsors are willing to pay for integration.  And what complicates integrating different systems (“makes it more expensive and take more months” in executive speak) is that those systems were built by different people–different people with different definitions for words.  But even sponsors and executives get hopping angry if it takes an inordinate amount of time to integrate parts of the same system because “no one was talking to each other”.

Similar issues arise when integrating people.  A discussion between people, I mean.  If they are speaking the same words, but with different definitions in mind, then a lot of time and emotion gets wasted.

That is why, before we talk about anything else, I want to talk about defining words.  That is the purpose of this series.

What is a Business Strategy?

This entry is part 2 of 31 in the series Defining words

If you are an Enterprise Architect then at some point someone will ask you to provide an “IT Strategy”.  I think stockholders or regulators have this on a checklist or something so business executives come asking for it right before it is due.  Sometimes the only clear requirement is “we need it fast”.

The good news is you can turn it right back on them!  IT Strategy, by definition, involves aligning the technology roadmap with the Business Strategy.  Hand it over, buddy!

Then one day IT Strategy pops up on your performance plan.  You don’t get a bonus unless there is a current IT strategy, complete, and signed off by a list of characters that you could never get to agree on anything.  And that brings you to the first issue:  You really do need to get your hands on a Business Strategy and–you guessed it–no such thing exists.  Or perhaps it is a 5,000 page document and you are not on the “need to have” list.  You are not sure what you need, but you need it fast!

So what are we really talking about here?  What is it exactly that we need?  And how do we align to it?

A Business Strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors*.  Think…

  1. Scope – aka strategic domain.  Industries, products, market segments, etc.  The corporate mission statement should give a hint.
  2. Goals and objectives – Targets for volume/revenue growth, profit, ROI, market share, etc. for a specific time period.
  3. Resource deployments – Obtaining resources (i.e. funding) and allocating them across businesses, products, markets, functional departments, activities, etc.
  4. Identification of a sustainable competitive advantage – How will the business compete?
  5. Synergy – Making the various parts of the company complement and reinforce each other.

It gets more complicated.  See, there are different levels of Business Strategy that are different in nature:  Corporate Strategy, Business Unit Strategy, and Product-Market Strategies.  All three are key drivers for either determining what the IT Strategy should be or getting it funded.

Obviously, this is too big of an issue for a blog post.  But at least we have started to peel the onion on what a Business Strategy is!

A more concrete understanding of what we need from the Business Strategy (and why) will be important because we are probably going to need to explain it in the form of fill-in-the-blank questions.  Multiple choice questions are even better.

* I quote  and paraphrase from “Marketing” by John Mullins et al, which I obtained from Edinburgh Business School.

 

 

What is a Corporate Strategy?

This entry is part 3 of 31 in the series Defining words

A Corporate Strategy  is a Business Strategy that covers all of the business units in a corporation.  It involves decisions like which industries to be in, how diversified or specialized to be, whether/how to acquire or divest parts of the supply chain, how to fund it all, etc.  It also involves how to set and report on business unit objectives at the group level, which depends upon how they spread investment across the business units, which depends upon how attractive their industries are projected to be.

Corporate strategists are looking for ways to share resources across business units to create synergy or economies of scale.

A corporate level strategist might decide to reorganize the business units to focus each on a market segment instead of a product.

I am not a corporate strategist and I am guessing that you aren’t either.  So why am I taking your time with it?  I care about corporate strategy because it is part of the business strategy, which is a required input for strategizing about technology.

What is a Product-Market Strategy?

This entry is part 4 of 31 in the series Defining words

A Product-Market Strategy is a Business Strategy that focuses on defining target markets for specific products, branding, and product positioning. This is called the marketing mix, or the 4 P's:

  • Product
  • Price
  • Place
  • Promotion.

I was once a software product manager and I created a Product-Market Strategy.

Now, as an Enterprise Architect I help drive Business Strategy and I consume it, but I do not create it. So the driving/consuming part is what I will focus on in future posts.

 

 

What is a Business Unit Strategy?

This entry is part 5 of 31 in the series Defining words

A Business Unit Strategy is a Business Strategy for a single business unit.

Business units sometimes operate in a particular industry and serve a particular market.  Other times they are product-focused.

Business unit strategists must decide which products to market to which segments and how to expand the business within the constraints of the Corporate Strategy.  New products for existing customers or new customers for existing products?

This is usually the level at which strategists look at various competencies and decide which ones are “differentiating” and which ones should be outsourced, given boxes for their paper files, or otherwise neglected.

Business unit strategists also govern product managers or whoever is creating Product-Market Strategy.

Business Unit Strategy is of key importance to IT Strategy.  For example, when the business decides that a particular competency is “differentiating” it is an indication that they will need technology to be applied in that area.

What is Architecture?

This entry is part 7 of 31 in the series Defining words

I am happy to say that is was NOT ME that complicated “Architecture”.

One thing that makes it complicated and confusing is that we describe the various dimensions of architecture with some ambiguous words.  Architecture is made up of different viewpoints that require different skill sets to tackle properly.

The least confusing dimension focuses on different aspects of systems such as applications (requirements about what you want the system to do), information (requirements about what you want the system to process or store), integration, business, etc.  So we have Application Architects, Information Architects, Integration Architects, Business Architects, etc.

Levels 02fig03_altArchitects within one of the above specialties then focus on different levels of abstraction.  Think of it as levels of knowing what you are talking about.  If you have very little idea of what you are talking about then you use vague words like “gather customer behavior” to create a Conceptual Architecture.  Then, once you have kind of narrowed it down, but not quite, you use more specific words such as “Web Analytics” to create a Logical Architecture.  Then, once you know exactly what you mean you use concrete words such as “Core Metrics” or “Tea Leaf” to say exactly what you mean.

Finally, we have different levels of detail.  Application Architects understand the components that make up an application or system.  Solution Architects understand the building blocks that solve a problem, usually involving a small cluster of applications that are integrated together.  Enterprise Architects understand all of the major systems that solve the biggest problems for an organization (business unit, corporation, etc.).

Now, if I say the Information Architecture of a teller application is part of the Architecture of the teller application, part of the Solution Architecture of the branch solution, and part of the Enterprise Information Architecture (and therefore part of the Enterprise Architecture) then you will know exactly what I mean.  Right?

Of course, software makes up a layer in yet another dimension including software, platforms, and infrastructure (hardware, networks, OS, DBMS, etc.)

Lying orthogonally across the above categories there are specialties such as CRM, marketing, security, channels, etc.

What is Enterprise Information Architecture?

This entry is part 8 of 31 in the series Defining words

9780137035717I remember the first time I heard a Nirvana song on the radio.  The sound caught me off guard and I thought it was too good to be true!

That is how I felt when I read The Art of Enterprise Information Architecture.

The book does a good job of explaining Information Architecture and contrasting it to Enterprise Information Architecture.

Levels 02fig03_altThe only thing I do better than the authors is forgetting about what I said yesterday and not worrying about trying to make it consistent with what I am saying today.  There is some stuff about historical IBM messaging that I would be smarter if I didn’t know.

Nonetheless, if you are interested in either Information Architecture or Enterprise Architecture, this is the place to start.  Stop what you are doing and read this book.

I give a quick definition of EIA in “What is Architecture?”.

 

The following primary areas of EIA are shown in the diagram below from the book:

  • Data Management
  • Metadata Management
  • Information Governance
  • Enterprise Content Management
  • Information Integration
  • Master Data Management
  • Analytics Applications.

Component model 05fig01_alt

I’ve listed them in the sequence I would consider tackling them in an organization.

All systems have operational data inside them.  Beyond accessing the data by an application, Data Management would involve creating data services or some other means to access the data programmatically from outside the application.  For example, from a business process or information integration.

Metadata Management puts in place a standard way to document what data exists, where it is stored, how it flows, and where it is consumed.

Once you have started documenting your information landscape you can start Information Governance.

Enterprise Content Management puts some business process around the provisioning of content to be displayed and separates it from applications, similar to how WordPress (used to create this blog) stores content in a database so that you can display it using different themes.  This would also be a place to store digitized documents so that they can be shared across the organization.

Information Integration is typically implemented as part of Master Data Management or Analytics.  This is where the organization begins to slog through the process of standardizing data and realizes the importance of defining words.

Master Data Management happens as organizations try to synchronize operational data about the most important business entities (customers, products, relationships and locations) across systems.

Analytics involves data warehousing; decision support such as business intelligence (BI); decision management such as business rules management, predictive analytics, decision models, and cognitive computing; and “big data”.

 

 

 

 

 

What is Strategic Design?

This entry is part 9 of 31 in the series Defining words

intersectionI work with a lot of people who have a strong aversion to the word “strategic” so I really enjoy terms like “strategic design”. When I say such things, the first dear friend to roll their eyes gets the most credit for calling me on another ridiculous tangent into obscure techno babble.

Then I tell them to “Google it” and look down my nose at them like they haven’t read an important book in decades.

Google offers up Wikipedia, where you will learn that “Strategic design is the application of future-oriented design principles in order to increase an organization’s innovative and competitive qualities.“

Intersection says “The challenges enterprises face in a hyperconnected, highly dynamic, and technology-pervaded world require them to think holistically about their relationships to people. The design competency can help enterprises to consciously shape the way they are experienced over time, to provide afacevisible and approachable to everyone interacting with them. To tackle problems on this level, the practice of design needs to become more strategic and relevant to problem settings typical to the enterprise.“

My hope is that each person goes off and learns that everything we have been doing has been a futile and myopic attempt to optimize a single variable in a complex system. We have been like a group of oblivious surgeons furiously operating away without even realizing they were all trying to save the same patient.

So how do you broaden your perspective and work across disciplines in a well-orchestrated team to make an enterprise work better for everyone involved? That is the subject of INTERSECTION, How enterprise design bridges the gap between business, technology and people.

There is a useful article about the book by Gerd Waloszek on the SAP Design Guild, complete with summary tables that helped me get my mind around the book.

There are other books on strategic design. What drew me to this particular book was the extensive definitions of words, lists of things to think about and do, and a process for putting it into practice.

I encourage you to read the book and then go around saying “strategic design” and see how people react.

 

 

What are business benefits and value?

This entry is part 10 of 31 in the series Defining words

Ironically, the most common request I get from business people nowadays is to explain the business benefits and/or value of some course of action that we are proposing.

In the past, business leaders wanted to accomplish some goal for good reason and we were asked to propose a way to do it. They knew the benefits already and had a sense for the expected value.

Now, business leaders are asking technology experts for ideas on how best to compete. The line between business capabilities and technology enablers is blurring. I am not just referring to products such as Blogsy, where the technology is the product. In financial services, from the customer’s perspective, the mobile app is becoming indistinguishable from the bank. Instead of solving a well-defined problem we are trying to figure out how to make customers more loyal or something like that and the technology is the primary knob to tweak.

When an IT or transformation team sells business stakeholders on solutions, projects, and initiatives they are selling products and services to meet business needs and wants that are derived from the ultimate consumers’ needs and wants. This is true even for corporate banking, just more indirectly.

The value to the business stakeholders is a function of the expected benefits to the business (derived from benefits to the ultimate consumer) and are calculated based upon the present value of the resulting future cash flows.

For example, lifetime customer value is calculated as the present value of future revenues from a customer and depends on customer loyalty. In banking, a 5% increase in customer loyalty lifts lifetime profits from that customer by 85%. This is because of high customer acquisition costs such as advertising, on-boarding, and financial inducement (a lower price or special promotional deal) required to get customers to switch banks or choose one bank over another for a particular product.

So the business benefit expected is the 5% increase in customer loyalty. The business value is the present value of the changes to future revenues and costs.

How to make customers more loyal is another matter.