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DX Capability Framework
16 October 2017
Mike Rosen
Research Vice President, Strategic Architecture
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
2
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ImagineanEconomyWhere...
25%ofmanufacturerswillgenerateoverhalfoftheirrevenuefromdigitally
basedservices.
3
Source, IDC 2016 Digital Transformation Predictions - Preview
10%ofworkwillbesourcedfromthe“networkedfreeagent”in“skill-based
marketplaces”.
65%oflargeenterpriseswillbeinformationbased
companies
Digital Transformation (DX) DefinedTheapplicationof3rd Platformandrelatedtechnologiestofundamentallyimproveallaspectsofsociety.Forbusinessthismeans:
Newsourcesofinnovationandcreativitytoenhanceexperiencesandimprovefinancialperformance.Simplymodernizingthetechnologyunderpinningexistingsystemsisnottransformation.
TRANSFORM…
Usinginformationtocreateanevidencebasedculture.Companiesshouldplanondoublingtheproductivityoftheirknowledgeworkersbyusinginformationmoreeffectively.
…DECISIONMAKING…
Digitaltransformationisnottobeconfusedwithdigitaltechnologies,however,itdoesuse3rd PlatformtechnologiessuchasCloud,mobility,BigData,andsocialaswellasInnovationAcceleratorsincludingIoT,robotics,and3Dprinting.
…WITHTECHNOLOGY
$1.2T in
2017
$2.0T in
2020
$1.4T in
2018
$1.7T in
2019
$6.3T Direct DX
Investment
4
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LeadershipTransformation
Omni-ExperienceTransformation
InformationTransformation
OperatingModel
Transformation
WorkSourceTransformation
Digital Transformation is Multi-faceted
5
DX Maturity Model
6
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WW DX Benchmark 2017 versus 2016
7
2017 Results Total N = 1,236; Survivors N (Levels 1 & 2) = 582; Thrivers N (Levels 4 & 5 ) = 302
2016 Results Total N = 1,616; Survivors N (Levels 1 & 2) = 563; Thrivers N (Levels 4 & 5 ) = 502
14.8
42.6
24.5
13.6
4.4
0
10
20
30
40
50
60
18.2
49.6
19.5
9.7
3.1
9.4
31.8 33.9
19.1
5.7
0
20
40
60Survivors
Thrivers
16.3
29.8 29.1
20.4
4.5
0
20
40
60
23.8
36.4
23.8
13.6
2.4
12.2
19.6
28.231.1
8.9
0
20
40
60Survivors
Thrivers
TheMovetoDigitalTransformation
Source : IDC
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Will these Technologies Transform Your Industry?
FraudReducedCognitiveanalyticsreducefraud,waste,andabuseby10%,resultingin$300billioninglobalsavings
PublicSafetyTransformed75%ofStateandLocalGovernmentsUseCitizenDatainTransportationManagementandReal-TimeCrimeCenters.
DataBreachesMitigated50%ofthetop100globalretailersencryptallcustomerdatainflightandatrest,declaring“TrustedDataCertification”
SurgeryAutomatedSurgeonsusecomputer-assistedorroboticsurgerytechniquestoassistin50%ofthemostcomplexsurgeries.
Logistics‘LastMile’Revolutionized60%ofmanufacturersareabletochoosebetweensamedaysupplychainand3Dprinted
FieldServiceRevolutionizedFieldserviceteamstaffsdropby40%
In the Next 3-5 Years
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NewKPIsforDigitalOrganizations
33% of CEOs will
have technology
leadership
experience
DIGITAL
LEADERSHIP
DIGITAL
OMNI-EXPERIENCE
35% improvement in
Net Promoter
score when
customers own
their experience
DIGITAL
INFORMATION
>100%growth of revenue
from information-
based products
DIGITAL
OPERATING MODEL
40% of operational
processes will
be self-healing
DIGITAL
WORKFORCE
50% reduction in
management
layers
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LeadershipTransformation
Omni-Experience
Transformation
InformationTransformation
OperatingModelTransformation
WorkSourceTransformation
25%oftotalDXtechnologyspendingIn2020
3%oftotalDXtechnologyspendingin2020
19%oftotalDXtechnologyspendingin2020
49%oftotalDXtechnologyspendingin2020
11
1%oftotalDXtechnologyspendingin2020
Source: IDC, Digital Transformation Spending Guide, 2015
33%oftotalDXtechnologyspendingin2020
38%oftotalDXtechnologyspendingin2020
The Information-Based Enterprise
By2020,WeMoveFromBuildingtheDigitalEnterprisetoBuildingtheInformation-BasedEnterprise
12
Createexpectation-
alteringcustomerexperiences
1
Useinformationasacompetitive
advantage
2
Createnewrevenuestreamswithconnected
services
3
3 Actions We Can Take Now
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13
Theabilitytocontinuallyattractandgrowloyaltywithcustomers,partners,andemployeesbycreatinginteractiveexperiences.
“Digital
Transformer” Customer experience
innovation that alters market
expectations
“Digital Explorer” Customer experience
innovation that says
“look at me”
Omni-Experience Transformation
Expectation-Altering CX Innovation
14
Shoppingjourneystartsinanychannel
Connectedglassshoppingwall
Triangulatecustomer,product,andemployee
Interactivefittingrooms
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Operating Model Transformation
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Theabilitytomakebusinessoperationsmoreresponsiveandeffectivebyleveragingdigitallyconnectedproducts/services,assets,peopleandtradingpartners.
“DigitalTransformer”Connectedsystemsfuelnew
revenuestreams
“DigitalExplorer”Connectedsystemsimproveoperationalperformance
16
DigitalServicePlatformCreatesCompetitiveDifferentiator
IntelligentBuildingTrafficSystemCreatesNewRevenueStreams
Connected Systems Fuel New Revenue Streams
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Develop the Digital Platform of the Future
17
1
Aggressively help modernize
enterprise IT platforms to
accelerate DX initiatives
2Innovate at speed on the digital platform
with new use cases and reimagining of business models to help customers create
the new ecosystem
3Implement hybrid cloud architectures and data
analytics platforms to enable seamless integration
across both worlds, focus on key business outcomes
Infrastructure Transformation
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SystemofRecord
§ CompliantReporting
§ ProcessdrivesInformation
§ CFOdomain
Modernize
DigitalPlatforms
§ DigitalRepository
§ Informationdrivesprocess
§ LoB domain
Build
IndustryClouds
§ Distributedtransactions
§ InformationChannel
§ Ecosystemdomain
Monetize
Hybrid Cloud for
Critical Business
Systems
100X More End
Points From
Mobile and IoT
The Network as
Digital Revenue
Realization
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The New Digital Platform
EXTERNAL
PROCESSES
Connected
Processes
Assets
People
INTERNAL
PROCESSES
INTELLIGENT
CORE
Mobile
IoT
AR/VR
BOT
API
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#IDCDirections
IoT Connected Device Forecast 2015 – 2025*
© IDC Visit us at IDC.com and follow us on Twitter: @IDC17
0
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90
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Billio
ns
* Scenario Based ( 2020 – 2025)
4 8 0 0, connected IoT devices per minuteToday
#IDCDirections
IoT Connected Device Forecast 2015 – 2025*
© IDC Visit us at IDC.com and follow us on Twitter: @IDC18
0
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20
30
40
50
60
70
80
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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Billio
ns
* Scenario Based ( 2020 – 2025)
1 5 2 2 0 0, connected IoT devices per minuteBy 2025
IoT Connected Device Forecast
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#IDCDirections
The Data Sources For IoT: 2015 – 2025
© IDC Visit us at IDC.com and follow us on Twitter: @IDC19
-
20
40
60
80
100
120
140
160
180
200
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Classically Created IoT Relevant IoT Actionable
ZByt
es
* Scenario Based ( 2020 – 2025)
Growth From2020 - 2025
1.3 X
3.8 X
8.6 X
IoT Data Sources
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Source: IDC Feb 2016 analysis of CB Insights
database; IDC industry/function categorization
of results of search for companies with
keywords “Machine Learning” and/or “AI”
IoTCognitive
Computing
Next Generation Apps – Sense, Compute, Act
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The Internet Of Things Business Model1.0
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IoT
Devices
IoT
Gateways
Cloud
& Analytics
Machine Learning
Cognitive Computing
IoT Platform
“The Edge”
“Enterprise”“End Points”
IoT
Devices
IoT
Gateways
Cloud
& Analytics
Machine Learning
Cognitive Computing
IoT Platform“The Edge”
Characteristics of IoT Business Model 1.0
24
0 20 40 60 80
Separate
Somewhat intgrated
Fully Integrated
N=3,814 Source: Global IoT Decision Maker Survey, IDC, August, 2016
“Enterprise”“End Points”
§ Beyond Proof Of Concept
§ Stand Alone Deployments
§ Customer Still In “Learning Mode”
§ Few Services & Systems
Integration Needed
§ Minimal Use Of Analytics/Cognitive
Learning
§ Limited Use Of IoT Platforms
§ Network & Hardware Vendors
Perceived IoT Leaders
§ Little or No Digital Business
Outcome
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The Internet Of Things Business Model 2.0:
25
IoT
Devices
IoT
Gateways
Cloud
& Analytics
Machine Learning
Cognitive Computing
IoT Platform
Back Office Systems
“The Edge”
SaaS
APIs
Developers
Open Source
Open Data Platform
Endpoints Enterprise
Intelligent ERP
“i-ERP”
IoT
Devices
IoT
Gateways
Cloud
& Analytics
Machine Learning
Cognitive Computing
IoT Platform
Back Office Systems
“The Edge”
SaaS
APIs
Developers
Open Source
Open Data Platform
Endpoints Enterprise
Characteristics of IoT Business Model 2.0
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§ Standardized and Integrated
Diverse Work Flows With i-ERP
§ Cloud Platform Applications &
Cloud Brokerage
§ Significant Increase In Services
& Systems Integration Needed
§ Constant Use Of
Analytics/Cognitive Learning
§ Extensive Need For IoT Platforms
§ Software & Analytics Vendors
Perceived IoT Leaders
§ Run ICT As A Software Defined
Infrastructure
§ Compute Speed & Scale Become
Core Requirements
§ “No Code/ Low Code” Developer
Model
§ Generate Significant Digital
Business Outcomes
§ Drive efficiency in context-
sensitive decision making
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27
Useinformationasacompetitive
advantage
2
Createexpectation-
alteringcustomerexperiences
1
Createnewrevenuestreamswithconnected
services
3
3 Actions We Can Take Now
28
Theabilitytoleverageinformationforcompetitiveadvantagebyenablingthebusinesstorespondtoopportunitiesswiftlyandwithsuperiorintelligence
“DigitalTransformer”Informationprovidesacompetitiveadvantage
“DigitalExplorer”Informationinformsdecisionmaking
Information Transformation
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Information as Competitive Advantage
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John Deere - Farming as a Service
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The Global Datasphere
.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
Ze
tta
by
tes
WW Data Created,
Captured, and
Replicated
Data Created
The Global Datasphere is a measure of all new
data that is captured, created, and replicated in
any given year across the globe.
Over 50 categories of content creation/capture
devices, including embedded systems in devices
like automobiles, gasoline pumps, vending
machines, and kiosks.
Includes replication calculations for the data
created/captured across all 50+ categories.
The aggregation of all these calculations is called
our Global Datasphere.
IDC expects the Global Datasphere will grow by a
factor of 10 over the next decade to 163ZB in
2025.
Source: IDC Data Age 2025 Study, sponsored by Seagate
10x
163ZB
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5
10
15
20
25
30
35
40
45
50
Ze
tta
byte
s
Real-Time Data
Real-Time Data IoT Real-time
• Facebook’s Epic Data Blast - Able
to push 2.5x more data through
existing optical fiber, America
Europe Connect
• Electronics and Telco Research
Institute sends and receive 3
signals at the same time by rotating
the waves - allows 3x more data be
sent across the same frequency
• Intel’s Next-gen Hyperfast Optane
SSDs – Non-volatile memory based
on 3D cross-point technology -
boosts storage performance by 14x
Infrastructure suppliers continue
to innovate with
hardware and software!
The World is NOT Slowing Down
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• Real-time data is growing 1.5x faster than
the growth of all content created
• 25% of the data is real-time in 2025
• 95% of real-time data is driven by IoT
• The industry must respond by reducing
latency and increasing data transfer
Source: IDC Data Age 2025 Study, sponsored by Seagate
2017 Announcements
Intelligent Systems Require Metadata
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10
20
30
40
2016 2020 2025
Ze
tta
by
tes
Analytics and the Global
Datasphere
Useful if Tagged Tagged Analyzed Touched by CA
• By 2025
• Almost ¼ of the Global Datasphere (35ZB) benefits from analytics,
but must be tagged.
• About 70% of that is actually tagged, but only 20% of what is
tagged is analyzed. And, only 6% is leveraged in cognitive systems
• IDC expects that over $40B will be spent on cognitive systems by the
2020.
• Too little data is tagged today. Why?
• Too few standards
• Infrastructure limitations
• Limited know-how within the
industry
• Over time, however, as sensors
proliferate across our devices and
infrastructure, tagging will happen.
• Analyzing the data that we tag,
however, is the next shortfall.
• Lack of data scientists and vision.
• Analytics typically happen in
batches, in the datacenter – a post
process activity
• Tagging will be encouraged through
this process as results and findings
exemplify the benefit of analytics
• Cognitive systems take analytics to a
new level, is automated, and is expected
to deliver results instantaneously.
Source: IDC Data Age 2025 Study, sponsored by Seagate
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Digital Interactions in the Global Datasphere
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• Daily digital interactions will grow by
more than a factor of 20 over the
next 10 years as we move to more
online interactions and more
interactions with digital homes,
appliances, vehicles, and wearable
and implantable devices.
• Increasingly, these interactions will
happen automatically, creating a life
dependent on the data captured,
analyzed, and reflected back into
our stream of life. It becomes
normal…and, in fact, expected
• Much of this data is ‘personal’ data,
and is collected and analyzed – to
define you and to improve your life!
Your digital self is more “YOU” than your physical self!
1 every 18
seconds
Daily Interactions per connected person WW
2015
218/day
2020
601/day
2010
85/day
2025
4,785/day
Source: IDC Data Age 2025 Study, sponsored by Seagate
AAAs of Information and Intelligence
§ Awareness, Augmentation, Automation
§ A comprehensive awareness
§ Human decision maker augmentation
§ Machine decision making automation
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Essential Guidance for the CIO
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1 Build INFRASTRUCTURE to Scale
2 Create INTEGRATION Competencies around Micro Services
3 Provide Resources to Support INSIGHT
4 Establish Consistent INTERFACES and AGILE METHODOLOGIES
5 Make SOURCING a Key Competency
6 Govern SECURITY Policies for a Digital Economy
Workshop
§ What challenges are enterprise and IT leaders faced with?
§ Come up with a some questions that need to be answered in order
to effectively plan digital initiatives.
§ What information do they need to make intelligent decisions?
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ChallengesFacingEnterpriseLeadership?
§ What does the new digital strategy look like?
• Business model, operating model?
§ How to evaluate / prioritize options?
§ How to remain agile / flexible in the face of accelerated change?
§ How to be effective / efficient and produce value?
• Asset synergy versus inconsistency, redundancy
§ What technology investments are needed to enable the new
strategy?
• Rationalization, new technologies, platforms
§ How to communicate the new direction?
§ How to transform the organization?
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DXRequirements§ Encompassing customer engagement
§ Social engagement
§ Real time, always connected, every device, every where
§ AI / Cognitive / ML
§ Connected products and services
§ Autonomous, self aware, self healing processes
§ Speed, Scale, Scope
§ Cloud, IoT, AR/VR, 3D, Robotics, …
§ Platform economy / network
§ Data, Data, Data
§ Privacy and Security
§ Legacy
§ …
§ Digital Business Platform
39
Sense
Compute
Act
Data
Perception Control
Physical
Mechanization
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Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
40
Capability Approach Benefits
§ Facilitate communications and transparency
§ Create focus
§ Simplify complexity
§ Enable IT to continuously adapt with speed and agility
§ Capabilities for digital business models
• Digital Business Platform based on Generic Business Capabilities
• Implemented on a Technology platform based on Technology
Capabilities
§ Provide a difficult to imitate competitive advantage
• Rooted in culture and competencies
• Complete operation with embedded know how
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What is a capability?
§ Business Capability – “a particular ability or capacity that a business may possess or
exchange to achieve a specific purpose or outcome” *
• For example, Ecosystem Management
§ Capability defines “what” the business does, not ‘how”
• “Capability do not change much over time, especially at the highest levels, with new capabilities added periodically at
lower levels
• What does change is the effectiveness or the impact of capabilities
§ Capability is an abstract concept. Capabilities have concrete instances implemented by:
• People, Process, Technology – This is an old, outdated model
• People (Talent), Process, Information, Technology (Platform), Governance –
IDC’s DX Capability Model
• Having many instances of the same capability represent silos - inconsistency, redundancy, Technical Debt
* “A Business-Oriented Foundation for Service Orientation”, Ulrich Homann, 2006, www.msn.com
Ecosystem
Management
Capabilities Enable Agile Flexible Digital Products
43
Capabilities
Modular
Reusable
Plug & Play
Industrial
Scalable
Partitioned,
No Overlap
§ Amodular,reusable,plug&playportfolio
§ ofarchitectedcomponents§ toindustrialize§ andscale§ ournextgenerationof
enterprisetechnology
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Brief Capability Tutorial
§ Capabilities are
hierarchical
• Abstraction and
granularity
§ Capabilities are
formally defined
by architecture
44
ProductLifecycleMgmt
Product Info Management
Product Portfolio Management
Product Servicing
Digital Products (L1)
ProductDevelopment(L2)
Ideation (L3)
Design
Integration
ProductDelivery
Product Packaging
Product Distribution
Quality Management
RevenueManagement
Product Pricing
Demand Forecasting
Revenue Tracking
45
How to Implement Digital Capabilities
Governance
ProcessesActivities
Procedures
Datasets
Resources
Technology
ITSystems
Databases
Applications
Accelerators
PlatformsITSystems
Databases
Applications
TechnologyAccelerators
Activities
Procedures
Services
Resources
Processes
Talent
Skills
Knowledge
WorkStyles
TalentSourcing
TalentTalent
Skills
Knowledge
WorkStyles
TalentSourcing
RACIMatrix
KPIs
OrganizationalDesign
Compliance
Governance
ResponsibilityMatrix
KPIs
OrganizationalDesign
Compliance
Governance
Data
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DX Capabilities Sourcing Decision Compass
PlatformsProcesses
TalentGovernance
ITSystems
Databases
Applications
TechnologyAccelerators
Activities
Procedures
Datasets
Resources
Skills
Knowledge
WorkStyles
TalentSourcing
RACIMatrix
KPIs
OrganizationalDesign
Compliance
Activities
Procedures
Services
Resources
Talent
Technology
ITSystems
Databases
Applications
Accelerators
Processes
Talent
Skills
Knowledge
WorkStyles
TalentSourcing
Governance
ResponsibilityMatrix
KPIs
OrganizationalDesign
Compliance
Data
Governance
For each capability: strategic, core, or commodity?
• What talent do we need for this
capability?
• Do we have it? Can we acquire it?
• Should we source it?
• What are the governance
requirements?
• Inhouse vs. Outsource?
• How do we meet them?
• How does this fit with our architecture?
• What technologies do we need?
• How do we best acquire them?
• What functions must this capability
provide?
• Build / Buy / Rent / Hybrid?
• Project plan / Vendor selection
• What data will this capability use /
provide?
• How will we integrate it with other data
and capabilities?
• What DX opportunities does it provide?
The Strategic Priorities of a Digital Strategy Evolve Rapidly
ExperientialEngagement
Blendingdigitalandphysicalinconsumerengagement
DataMonetization
Leveragingdatatocreatenewdigitalrevenuestreams
DigitalBusinessatScale
Deliveringhyper-personalizedcosteffectivedigitalservices
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RecommendationOriented
InnovationAcumen
UXDesign
CustomerAnalytics
Consumer-facingtechnologies
AI/Cognitive
APIDesign
Realtime,AlwaysConnectedSystems
DigitalAssistants
ChiefCXOfficer
CustomerDataSteward
NetPromoterScore
OutsideInOrganization
CustomerJourneyMapping
ConsumerDX
ContinuousFeedbackLoop
CXOrchestration
IdentityManagement
48
Develop a Experiential Engagement Capability
Data
ProcessTechnology
TalentGovernance
CustomerJourneyMapping
ConsumerDX
ContinuousFeedbackLoop
CXOrchestration
IdentityManagement
Consumer-facingtechnologies
AI/Cognitive
APIDesign
Realtime,AlwaysConnectedSystems
DigitalAssistants
ChiefCXOfficer
CustomerDataSteward
NetPromoterScore
OutsideInOrganization
RecommendationOriented
InnovationAcumen
UX Design
CustomerAnalytics
Operational
and
Infrastructure
Capabilities
Digital
Business
Capabilities
DigitalProductsEcosystemManagement
ExperientialEngagement
SocialEngagement
PrivacyManagement
Real-timeAlwaysConnected
Cognitive+Analytics
InformationManagement Architecture
UbiquitousTouchPointUtilization
GovernanceInformationMonetization
EventManagement
SystemIntegration APIManagement
CloudandInfrastructure
MgmtDevOps
SelfAwarenessandHealing Security
ServiceManagement
BackOfficeOperations
Vendor/SourcingMgmt
PlatformDeliveryandOperation
DigitalBusinessAtScale
49
Capabilities Create Flexible Platforms
Te
ch
no
log
y
Pla
tform
Dig
ital B
usin
ess
Pla
tform
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Digital
Business
Capabilities
Operational
and
Infrastructure
Capabilities
Capability Classifications
50
Capabilities that provide seamless
customer and ecosystem engagement and
digital solutions through the collection, use
and analysis of information and cognitive
computing to enhance decisions, increase
revenues, and improve productivity
Reusable, sharable capabilities that enable
integration and orchestration of products,
services, events, and information to
connect stakeholders with value streams
and ensure scalable, elastic, secure,
reliable, consistent, and efficient operations
§ Capabilities are
classified by their role
in DX
§ Each classification
contains multiple
capability levels
(1,2,and 3)
CapabilityPrinciples1. Capabilities are an industry defined concept and structure supported by published best practices
2. Capabilities are nouns, not verbs
3. Capabilities define what a business does, not how it does it
• Capabilities are not processes
4. Capabilities are non-redundant and non-overlapping
5. Capabilities require a clear, concise, one-sentence, 25 words or less definition
• Ability to (verb, verb, verb…(child capabilities)) on / with (business object, concept, entity information…(with
clarifications)) in order to goal, goal…
• Example: Capital Management - Ability to control, develop, review, analyze and report on a financial strategy for
maintaining sufficient, equitable levels of assets and liabilities, in order to meet expense obligations and maintain sufficient
cash flow
6. Capabilities are classified into strata
• Operational vs Business, Strategic / Core / Commodity
7. Capabilities decompose into more capabilities
8. Capabilities can be measured for planning, operations, and optimization
9. Capabilities map to other views of the business
• Value stream, information, strategy, initiative, organization, …
51Source: BIZBOK Business Architecture Body of Knowledge
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CapabilityDefinitions§ Experiential Engagement: Ability to collect, control, predict, process, organize, present and analyze all information, documents, preferences,
experiences and history related to an individual or organization that has, plans to have, or has had an agreement in place with the company in order to
provide an experiential engagement.
§ Ecosystem Management: Ability to manage all computing resources, rules, roles, collaborations, and communications while enabling a marketplace for
sharing, transactions, auto-provisioning, self-services, scalability, sustainability, and continual reliability.
§ Digital Product: Ability to provide an encapsulated value (product or service) for the benefit of an organization to its partners – customers, partners,
brokers, employees, contractors- by creating revenue, helping another product revenue, increasing productivity, or reducing cost.
§ Cognitive Computing: Ability to apply continuous sensing and collective learning, including AR/VR, recommendation, etc. to improve experience,
efficiency, and effectiveness through intelligent self-correcting, self-optimizing, full automation.
§ Ubiquitous Touch Points: Ability to allow consumers to use any device of their choice -Web, mobile, wearable, not yet invented- for dealing with the
ecosystem with the benefit of lazy, consistent, synchronized, and adapted user experience.
§ Real Time, Always Connected: Ability to integrate real-time, always connected, open source, data driven, social approach into all aspects of digital
enablement through leadership, culture, talent, technology, platform, process, and governance.
§ Privacy Management: Ability to manage processes, handle information, and integrate assessments into engagements, interactions, analysis, and
operations in order prevent damaging publicity, secret surveillance, or unauthorized disclosure of personal data or information.
§ Social Engagement: Ability to optimize enterprise social business through listening, measuring, and engaging with customers and partners.
§ Information Monetization: Ability to develop value in an information value chain and generate revenue by selling, exchanging, or sharing information.
§ Information Management: Ability to acquire, model, processes, meta-tag, distribute, and dispose of information within custodianship, compliance, and
security contexts.
§ Architecture: Ability to use architectural principles and practices to balance operational efficiency against differentiation, effectiveness, and innovation in
order to manage complexity, provide competiveness, and transform the enterprise.
§ Governance: Ability to control, manage, monitor enterprise assets and resources through PMO, horizontal roles, architecture, knowledge management,
etc. to ensure accountability and integration of data, processes, and people across verticals (while avoiding silos) to maximize efficiency, effectiveness,
and achievement of strategic and business outcomes.
52
BusinessCapabilities
CapabilityDefinitions§ At Scale Digital Business: Ability to ensure the efficiency, scalability, reliability, quality, and predictability of a company’s digital business needs in a
context of exponential speed and volume growth.
§ Platform Operation: Ability to provide, enhance, manage, and monitor technology capabilities as an integrated platform of services, provided through
an ecosystem and marketplace of sharing, trading, and buying.
§ Security: Ability of applying a set of controls in an IT environment to offset the risks associated with loss of confidentiality, integrity, and availability of
data and/or productivity and propriety of systems.
§ Self-Awareness and Healing: Ability to dynamically allocate supply with IT service demand and to proactively preemptively, or reactively optimize and
automatically mitigate failures.
§ Event Management: Ability to detect, process, and manage events to drive processes, organizations, collaboration, supply chains, information sharing,
etc. through filtered and intelligent notification to interested participants.
§ System Integration: Ability to link and orchestrate information systems together with connectivity and interoperability in a managed and secure platform
environment in order to deliver consistency, speed, business value, and efficiency to the enterprise
§ API Management: Ability to manage the creation, lifecycle, publishing, access, and usage of APIs in order to expose information and services to internal
applications, partners, and ecosystem.
§ Service Management: Ability to effectively broker, integrate, and orchestrate the IT "business oriented" services empowered by 3rd Platform
capabilities that are essential for digital transformation (DX)
§ DevOps: Ability of an organizations to improve development, testing, and operations of information systems through an early collaboration, automation,
continuous updating, and iterative agile approach.
§ Cloud and Infrastructure Management: Ability to provide, operate, enhance, and manage all IT infrastructure, whether hosted internall, on the cloud,
or hybrid, in order to provide digital business at scale.
§ Vendor / Sourcing Management: Ability to evaluate, source, and manage vendors, technology and resources necessary for the operation and digital
transformation of the enterprise.
§ Back Office Operations: Abilities to operate enterprise systems in a consistent, standardized, predictable, and compliant way in order ensure traditional
operations and make data and functions available to new digital products and services.
53
OperationalCapabilities
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27
IDC Level 2 Capabilities - Draft
54
24 - L1
130 - L2
42 – L3
WhatReactionDidIGet?
§ “Wow Mike, this is Brilliant !”
§ “Gee, that’s interesting”
§ “I don’t get it”
§ ”That’s complicated”
§ “Architecture is such a waste of time”
55
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28
LeadershipTransformation
Omni-ExperienceTransformation
InformationTransformation
OperatingModel
Transformation
WorkSourceTransformation
IDC DX Model
56
Leadership
Model
Innovation
Mgmt
Business
Model
Planning
Governance
Economic
Leverage
Experiential
Engagement
Ecosystem
Mgmt
Platform
Delivery
Dimension
Marketing
Data
Discovery
Data
Monetization
Data Mgmt
Knowledge
Mgmt
Cognitive
Computing
Digital
Products
Connected
Products
Process
Mgmt
Decision
Making
Organization
Structure
Digital
Mindset
Talent Mgmt
Talent
Sourcing
Work
Optimization
Capabilities Map to DX Masteries
IDC DX Capability Model
57
Leadership Omni-Experience Information OperatingModel WorkSource
Leadership
Model
Innovation
Mgmt
Business
Model
Planning
Governance
Economic
Leverage
Experiential
Engagement
Ecosystem
Mgmt
Platform
Delivery
Dimension
Marketing
Data
Discovery
Data
Monetization
Data Mgmt
Knowledge
Mgmt
Cognitive
Computing
Digital
Products
Connected
Products
Process
Mgmt
Decision
Making
Organization
Structure
Digital
Mindset
Talent Mgmt
Talent
Sourcing
Work
Optimization
EventManagementSystemIntegration APIManagement
CloudandInfrastructureMgmt DevOps
SelfAwarenessandHealing Security
ServiceManagement
BackOfficeOperations Vendor/SourcingMgmt
PlatformOperationDigitalBusinessAtScale
OperationalandInfrastructure
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Evolving Information Capabilities
58
DX Information MaturityScape –
as published
DataDiscovery
AcquisitionandPreparation
Exploration
Visualization
Datafication
ValueDevelopment
Algorithms
ProgramManagement
Analytics
Quality
ChangeManagement
ProgramDevelopment
ValueRealization
Productization
Monetization
Orchestration
ServiceInnovation
ChangeManagement
ProgramDevelopment
KnowledgeandCollaboration
KnowledgeIntegration
WorkVirtualization
Governance
Risk
ChangeManagement
ProgramDevelopment
InformationArchitecture
IntegrationandSynchronization
DataMgmt andInfoModel
IAServices
Security
Movedto:TXCapabilitiesModel
Movedto:DXOperatingModel
Movedto:DXLeadershipModel
Movedto:DXOmniExp Model
Movedto:DXLeadershipModel
DataDiscovery
Exploration
AcquisitionandPreparation
Visualization
Datafication
DX Information Capabilities
– as proposed
DataMonetization
Monetization
Algorithms
Productization
Quality
DataManagement
Metadata
Aggregation/Transformation
Compliance/Archiving
MasterData
KnowledgeManagement
KnowledgeIntegration
WorkVirtualization
IPManagement
CognitiveComputing/AI
MachineLearning
FederatedAnalytics
Predict/Recommend
New New New
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
59
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What is Business Architecture?
60
§ “A blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands.”
§ A way for business to express its
intentions consistently and
unambiguously while staying focused on
stakeholder value
§ NOT a replacement for
• Planning
• Business Analysis
• Good management and judgment
• Governance
• IT Architecture
What is the Business Architecture?
61
§ Could we have built a Business Architecture for this
company in 1928?
§ How would it compare to the BA today?
§ How would the Enterprise Architecture compare?
Fiat Lingotto Plant -1928
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31
Elements of Business Architecture
62
Capability
InformationValueStream
Organization
Foundations
Vision,Strategy,TacticsPolicies,Rules
Regulations
Extensions
Stakeholders
Products,Services
Metrics,Measures
Initiatives,Projects
Business Architecture Foundations
63
Strategic
Strategic
Planning
Partner
RelationsMarketing
Predictive
Analysis
Risk
Managemen
t
Innovation
Core
Inventory
Management
Customer
Managemen
t
Product
Managemen
t
LogisticsExchange
NetworkIT
SupportHR Finance Legal
Register for
Exchange
Advertise
Items
Provide
order info
Process
OrderNotify
Independent
ABC Insurance
Property & Casualty
Life & Disability
Health
EnterpriseDiagram Key
Business Unit
IT
Finance
Marketing
Legal Dept.
Purchasing
HR
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Decomposes into
Source:TSG,Inc.
Capability
Defines ‘what’ the business does (not how). Capability
maps provides a categorized and hierarchical
organization of those capabilities.
Value
Stream
Provides a stakeholder perspective of value accretion
across their end-to-end interaction with the business.
Typical external stakeholders are customers, partners,
and suppliers.
Information
Identifies the critical information (fundamental business
entities) that is needed to support the capabilities and
operate the business. Particularly important is the
information that is shared across the enterprise to
provide a consistent omni-experience.
Organization
Identifies the organizational structure of the enterprise
and the responsibilities and resources of each
organizational unit. Stresses the interactions and
collaboration across business units rather than the
hierarchical reporting structure of an organization chart.
10/18/17
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§ Investment analysis and funding
§ Merger and acquisition planning and deployment
§ Application rationalization
§ Strengthening the supply chain
§ Business unit consolidation
§ Shift to customer centricity
§ New digital product or service rollout
§ Business transformation
64
BusinessArchitectureScenarios
Essence of Business Architecture: Shared Vocabulary
§ Business professionals leverage a standard approach to creating a common language
about their business
§ For example, business teams use techniques such as capability mapping to build
business-wide concurrence on terms such as:
• Customer, Product, Agent, Loan, Risk Rating, Account, etc.
• Customer Management, Product Management, Loan Management, etc.
§ People think they know what these words mean – when they really mean different things
(this can be dangerous)
§ A common vocabulary eliminates delays and confusion that planning and requirements
teams experience on a regular basis
65Source: BIZBOK™
10/18/17
33
Stakeholder Perspective
§ 3rd platform technologies are forcing business redesigned around user
experience
§ Fundamental Questions:
• Given all the possible actions…
• What are the key interface touch points?
• What will provide the best omni-experience?
• What information is needed, or can be acquired?
• What will provide the best value for the user, AND the enterprise?
§ Business architecture helps:
• Understand the customer interaction scenarios
• Understand the value proposition
• Explore and identify
66
Impact Analysis: Synergy and Conflict
67
Advertise
Items
Provide
order info
Process
OrderNotify
Advertise
Items
Provide
order info
Process
OrderNotify
Advertise
Items
Provide
order info
Process
OrderNotify
Customer Management
Customer Acquisition
Attraction
Data Collection
Validation
Customer Information
Creation
Removal
Maintenance
Customer Service
Problem Resolution
History Tracking
Outreach
Customer Profiling
Aggregation
Analysis
Demographics
Value Stream A Value Stream B Value Stream C
Capability to Value Stream Mapping tells us that the same capability is used in multiple places
Synergy: This enhancement could add value elsewhere.
✓ ✗ Conflict: The proposed change would break this existing value stream.è
Strategy requires an enhancement to support a new customer experience
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Strategic Perspective
68
§ Strategic execution is a weak link
§ Strategic fidelity is worse
• By the time the ‘strategy’ it passed down 2 or 3
levels, as much as 50% of the intent and context
is lost
§ Business architecture helps:
• Quickly evaluate options for strategic direction
• Clearly, unambiguously articulate strategic intent
• Define initiatives to implement the strategy
“In preparing for battle, I have always found that plans are useless, but planning is indispensable.” Dwight D. Eisenhower
Only 37% of executives
say their companies are
“very good or excellent”
at strategic execution
Only 23% blame current
economic conditions as a
major factor in their lack
of execution
Source: 2010 HBR Survey of 1000 executives
Viewing the Business through Capabilities
§ Provide holistic view of large, complex businesses in a way that is easy to understand for
business professionals
§ Allow business professionals to establish concise, shared business vocabulary across
business units and business partners
§ Highlight business redundancies, inconsistencies and weaknesses
§ Offer a language and framework for strategic planning, change management and impact
analysis
§ Enable laser-like business prioritization and investment focus
§ Serve as basis for transformation analysis, planning and deployment
§ Provide the glue to bind strategy, stakeholder value, organizational views, information,
initiatives and technologies into an integrated planning framework
70
Source: Business Architecture Guild Body of Knowledge Handbook
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Sample Capability Map
71
Business Planning Marketing Partner Management
Capital Management Policy Management International Relations Management
Financial Management Employee Management Procurement
Information Technology Management Training Operations
Management
Account Management Product Management Channel Management
Customer ManagementAgent Representative
Management
Capability Map – Level 1
Stra
tegi
c: D
irect
ion
Setti
ngCo
re:
Cust
omer
Fac
ing
Supp
ortin
g
Th
ree
-tie
r S
tra
tifi
ca
tio
n C
on
ce
pt
Source: Business Architecture Guild Body of Knowledge Handbook
CapabilityStrata§ Strategic or Direction Setting (Top)
• Provide differentiation or set direction
• Reflect executive priorities
§ Value Add, Core (Middle)
• The heart of what an enterprise does to ensure viability and thrive in the
market
• Can be thought of as a customer facing view of the business
§ Supporting (Bottom)
• Abilities that an organization must have to function as a business
• Examples: Human Resources, Financial Management, and Legal
Management
• Common targets for outsourcing
72
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36
Trademark Capability Map – Levels 1-2
3/10/2014 6
Source: USPTO73
Capabilities in Business Ecosystem
74
§ Capabilities do not stand alone§ For example, capabilities enable value streams and
information concept definition
Capability
Partner
Partner
PartnerCustomer
Management
Claims Management
Payments Management
Account Management
Product Management
ABC Insurance
IT
Finance
Marketing
Legal Dept.
Purchasing
HR
Procurement Management
Legal Management
Financial Management
Employee Management
Investment Management
Reserves Management
Marketing Management
Information Technology
Management
Strategic Planning
Transformation Office
Collaborative Team
Collaborative Team
Collaborative Team
Collaborative Team
EnterpriseBusiness Unit
Supporting Capabilities
Customer Facing CapabilitiesStrategic Capabilities
Diagram KeyBusiness PartnerCollaborative Team
HealthDecomposes
into
Collaborates through
Enables capability
Has capability
Has capability
Has capability
Has capability
Has capability
Has capability
Decomposes into
Has capability
Has capability Has
capability
Collaborates through
Decomposes into
Has capability
Enables capability
Enables capability
Customer- CustomerName- Customer Number- Customer Address- CustomerPhone- Customer Email- CustomerStatus- etc…
CustomerManagement
Account Pipeline
ManagementCustomer
Information Management
Account Payments
ManagementAccount
Information Management
Docket, Case File, Routing Management
Account Structuring
Account Information
ManagementAcceptance Notification
Account Structuring
Acquire LoanValidate
Application Approve Loan Issue LoanIssue Second Approval
Onboard Applicant
Process Fee Payment
Account Information
Management
Docket, Case File, Routing Management
Docket, Case File, Routing Management
Acceptance Notification
Account Structuring
Docket, Case File, Routing Management
Acceptance Notification
Account Information
Update
Docket, Case File, Routing Management
Acceptance Notification
Account ManagementAccount Pipeline Management
Offer EnablementAccount Offer Management
Account Submission Management
Account File Management
Intake Management
Rejection Management
Submission Acknowledgement
Submission Acceptance
Receipt Generation
File Creation
Account MatchingAccount Customer Assignment
Account Representative Assignment
Account RoutingWorkload Balancing
Account / Worker Assignment
Offer Assistance
Initiative Improves or Creates New Capabilities
Organization/Capability Mapping
Value Stream/Capability Mapping
Capability/Information Concept
Mapping
Capability/ Strategy & Business Model Mapping
Capability/Initiative Mapping
Product
Management
Capability/Cost & Performance Analysis
$ Analysis
Impact Analysis
Heat Mapping
Capability/Application Architecture
Mapping
Source: Business Architecture Guild Body of Knowledge Handbook
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37
Value Mapping: Brief History
§ Value mapping began with the Porter “value chain”
• Effective for evaluating activities and profit margins, but not for broad, multidimensional visibility
into stakeholder value
§ “Value networks” evolved over the past decade
• Provide value perspective across multiple businesses and are useful for visualizing concepts
such as supply chain dependencies
§ Value mapping further evolved with the “value stream”*
• Value streams offer a framework for envisioning aggregate views of how to deliver end-to-end
stakeholder value at an enterprise level
§ Value streams integrate well into business architecture – and this presentation, therefore,
focuses on value streams
*Note that business architecture value streams differ from lean value streams, which do not need to
be stakeholder triggered or deliver an end-to-end perspective75
Value Stream Defined
§ Value stream is “an end-to-end view of how value is achieved for a given
stakeholder”
• Stakeholders may be external, such as:
• Or stakeholders may be internal, such as:
§ Value streams strive to achieve the objective stated in the name of the value
stream for the triggering stakeholder
§ Value steam vs. capability:
• Capability views the business “at rest”, value stream views the business “in motion”
Acquire Product
Onboard Human Resource
Source: TSG, Inc. 76
10/18/17
38
Viewing the Business thru Value Streams
§ Offers a common baseline for envisioning how to deliver high visibility stakeholder value
§ Provide clear focal points for prioritizing how to achieve stakeholder value
§ Enable delivery of near-term, mid-term, and long-term value to stakeholders
§ Provide new and unique ways to envision stakeholder engagement
§ Enable prioritization and managed deployment of business capabilities
} Provide enterprise level perspective, yet offer drill down views that inform and enable analysis and
design disciplines
77
Viewing Business via Value Streams
78
n Value streams depict simple views that relate easily to the business
n Value streams must be stakeholder triggered to become active
n Value streams may be active for a few seconds or for several years
n Stages may be entered or exited in an active value stream, based on the state of certain
business objects and related business rules
n Most businesses have 1-2 dozen value streams at most
Acquire Product
Maintain Account
Accept Application
Register & Deliver Product
Manage Payment
Notify CustomerInquiry
Submit Request Apply UpdateDisseminate
RequestNotify
StakeholderPublish Change
Develop Product
Conceive Product Design Product Build Product Release Product
Validate Request
Apply for Product
Exte
rnal
St
akeh
olde
rs
Inte
rnal
St
akeh
olde
rs
Value streams: Comprised of stages, stage transitions and triggering
stakeholders
Source: TSG, INC.
Source: Business Architecture Guild Body of Knowledge Handbook
10/18/17
39
Anatomy of a Value Stream
§ Value streams and stages require basic attributes to make them useful including
definition and stakeholder
Prospect
Customer
Quote
Customer
Close
Customer
Register
CustomerValue Stream
Value Stream Name &
Definition Value Stream Stage Name & Definition
Value Stream Stage Name, Definition,
Entrance Criteria, Exit Criteria and
Participating Stakeholders
Value Stream
Triggering
Stakeholder(s)
Source: Business Architecture Guild Body of Knowledge Handbook 79
Sample Trademark Value Streams
3/10/2014 7
Source: USPTO80
10/18/17
40
Value Stream / Capability Mapping Example
• Capability related priorities are often driven by value stream priorities
• Mapping value stream stages to capabilities is a basic technique that is essential to
effective deployment and utilization of business architecture
Sa
mp
le M
ap
pe
d C
ap
ab
ilit
ies
• Capabilities enable value streams
• Example below shows one way to represent this mapping
Account Pipeline
ManagementCustomer
Information Management
Account Payments
ManagementAccount
Information Management
Docket, Case File, Routing Management
Account Structuring
Account Information
ManagementAcceptance Notification
Account Structuring
Acquire LoanValidate
Application Approve Loan Issue LoanIssue Second Approval
Onboard Applicant
Process Fee Payment
Account Information
Management
Docket, Case File, Routing Management
Docket, Case File, Routing Management
Acceptance Notification
Account Structuring
Docket, Case File, Routing Management
Acceptance Notification
Account Information
Update
Docket, Case File, Routing Management
Acceptance Notification
Source: TSG, INC.
Source: Business Architecture Guild Body of Knowledge Handbook
81
Capabilities under value stream stage provide frame of reference for TMNG releases
• Capabilities that appear across multiple stages and value streams provide framework for creating and reusing software solutions
• Cross-mapping framework also provides an organizing framework for business requirements
Value Stream / Capability Cross-mapping: A Frame of Reference for TMNG Program Roadmaps
3/10/2014 14
Source: USPTO82
10/18/17
41
Value Stream Characteristics
§ Value centricity
§ Stakeholder focus
§ End-to-End view
§ Executive representation
§ Aggregation of views and processes
§ Decomposition of views
§ Capability mapping
83
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
84
10/18/17
42
Workshop
§ How do we know what initiatives to plan?
§ What information do we need?
§ What are the decision criteria?
§ Come up with a set of questions that need to be answered in order
to effectively plan digital initiatives that execute strategies.
§ Given the Capability Measures Matric, add necessary metrics to the
chart. Provide sample values?
§ What does that tell you?
85
Capability Measure Matrix
86
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43
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
87
Retail Challenges
88
§ Connected lifestyle
• Always on, relationship based;
personal control
§ Now – Why Not Now?
• Instant gratification, intelligent store
and personalized fulfillment
§ Value(s) based economy
• Hyper-personalized, hyper-personal,
personal accountability
§ Participatory
• Social influence and the art of rating
everything; social responsibility
Disjointed
experiences
Inventory
and
Fulfilment
Mistakes
Product
assortment
failures
Operational
challenges
Theme: Meet Current
Consumer Expectations
10/18/17
44
Siloed Implementation Causes Complexity and Cost
Loyalty
Outreach
Targeted
Campaigns
Mobile
Assistant
Behavioral Analytics
Identity Mgmt
Customer History
RecommendationCont. Feedback
Rules Mgmt
Outreach Comm
Identity Mgmt
Customer History
Identity Mgmt
Customer History
Recommendation
Cont. Feedback
Rules Mgmt
Outreach Comm
Loyalty Mgmt Campaign Mgmt Advanced Interface
Social Listening Location Awareness
customer scenarios
One-off business and digital functions
…and integrations
89
Avoiding Siloes with Capabilities
Loyalty
Outreach
Targeted
Campaigns
Mobile
Assistant
Location Awareness
Social ListeningIdentity Mgmt
Customer History
Continuous Feedback
Rules Mgmt
Recommendation
Outreach Comm
Loyalty Mgmt Campaign Mgmt Advanced Interface
Behavioral Analytics
customer scenarios
Specific Business Capabilities
Common Digital Capabilities
90
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45
What Drives Optimal Customer Experience?
91
OmnichannelProfitability
Hyper-microPersonalization
Omnichannelfulfilment/supplychain
NextGenerationMerchandiseplanning
OmnichannelOrchestration
5% increaseinrevenue20% improvementsinstockturns
2x-4xincreaseinpromROI65%liftinstorevisits
Source: IDC 2017; Companies’ annual reports; public cases
32% improvedconversion43%revenueincrease65% increaseinrepeatpurchases
AIforomni-channelforecastingreduction of20%insurplusstock,40% increaseinforecastaccuracy
Become Your Customers’ Best Resource
93
Personalize with contextualized content
Enable the omni-channel store – Search, buy and pay anywhere
Improve navigation – Simplify with an understanding of search preferences and
contextualized customer / product category search needs
Create curated assortments to maintain interest, and curate "best in show"
content to close more sales
Enable seamless one-click checkout everywhere
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46
Retail Customer Experience Architecture
Dynamic Customer Journey Services
Analytics Services
Customer Product Inventory 3rd party
Acquisition Ingestion Integration
Information
Level
Back Office Partners IoT
Mobile Web Store Other ChannelsInterface
PRESENT ENGAGE SELL SERVICEATTRACT
Process
Level
AI
Real-Time,
Contextual
Hyper-Micro
Segmentation
Unified Info Lake
94
Retail Investment Areas
95
Omni-channel
commerce
Curated
merchandise life-
cycle management
Omni-experience
customer
engagement
Digital supply chain
optimization
Efficient and
innovation-ready
operations
Seamless and
frictionless commerce
Intelligent fulfillment
Augmented and virtual
experience
Intelligent product
design
Curated product
assortment and
positioning
Product life-cycle
development and
sourcing management
Next-gen customer care
Autonomic
conversational
engagement
Personalization &
contextualized
interaction optimization
Autonomic supply
network optimization
Digitally optimized
fulfillment operations
Transparent and secure
supply chain ecosystem
management
Mobile enterprise
Connected workforce
Safe and secure omni-
channel operations
Source: IDC's Worldwide Digital Transformation Use Case Taxonomy, 2017: Retail, February 2017, IDC #US42270417
10/18/17
47
IDC DX Business Use Case Hierarchy
100
§ 4 Level Model
– Digital Mission
– Strategic Priorities
– Programs
– Use Cases
Example: Retail DX Mission
Automated Supply (the future of
fulfillment)—don’t ever make me ask for it!
Augmented Living (the future of considered
purchases)—don’t ever let me live without it!
De-risking is the fundamental value Delighting is the fundamental value
Digital Transformation (DX) Mission: Create experiences that blend the digital and physical to make purchases in the stream of life
101101
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Key Retail DX Strategies
Source: IDC Retail Insights102
NowWhat?
§ So, our retail organization has a strategy for DX.
§ How do we implement that strategy?
§ What technology platform do we need?
§ What business and technology capabilities do we need?
§ How do we plan, prioritize, organize?
§ Where can we start?
§ What have other’s done?
§ How about the DX Capability Framework?
103
10/18/17
49
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
104
TopDownStrategicPlanningApproach
§ Enterprise has a mission and business model
§ Strategy defines new business and operating model
§ Capabilities enable / impact model
§ Tactics implement strategies
§ Initiatives implement tactics
§ Initiatives (projects) enable / impact capabilities
§ Strategy to execution via capability mapping
§ Capabilities have dependencies and measures
§ Planning and prioritization
105
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50
Mission, Strategy, Tactics, Goals
106
SuccessFormula
§ The formula for a successful Architecture is simple:
• When you make it easier/more valuable for people to do their job by using architecture, they will;
• If you make it harder for them, they will fight you.
©2015 IDC 107
Architecture Checklist:
§ What are the goals?
§ What decisions do you need to influence to achieve them?
§ Who makes those decisions?
§ What processes do they use to make them?
§ Where are the opportunities within those processes
to influence the decisions?
§ What structure of artifact would be useful
• At that point in the process
• For that individual
• From their perspective, tools, and skill set?
• …And consistent with architectural principles and best practices!
§ How do we make one? How do we engage them to help?
§ How will we measure if it is working?
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Capability ‘Tiers’
108
Retail Capabilities – Business Valu
113
10/18/17
52
Retail Capabilities – Level of Effort
114
Capabilities Required for Strategy
115
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53
Capability Business Value
116
Capability Functionality Gap
117
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54
Value versus Effort
118
Capability Measure Matrix
119
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55
Mission – Strategy - Initiative
120
Initiative Evaluation
121
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56
Planning Gantt Chart
122
ValueDeliveryStrategicPlanningApproach
§ Enterprise has a value proposition
§ Value proposition is delivered via value streams to stakeholders
§ Capabilities implement value stages
§ Capabilities have measures (effectiveness, completeness)
• Measurement matrix
§ Heat maps highlight capability gaps
§ Initiatives implement and enhance capabilities
§ Planning via value to capability mapping
§ Programs prioritize capabilities for impact and importance
123
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57
Business Model
124
Value Map
125
10/18/17
58
126
Value Stream / Capability w/ Heat Map
127
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59
OmniChannel Value Stream Map
128
GapAnalysisPlanningApproach
§ Enterprise has a mission and business model
§ Strategy defines new business and operating model
§ Strategies have as-is / to-be Gaps
§ Capabilities fill gaps
§ Initiatives (projects) enable / impact capabilities
§ Strategy to execution via gap analysis
§ Capabilities have dependencies and measures
§ Planning and prioritization
129
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Gap Analysis Report
130
Gap Impact Diagram
131
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61
132
USPetroleumCompany– Capabilitiesfor:StrategicPlanningBusinessandITcouldnotcommunicateatOccidentalPetroleum
Capabilitiesprovidedthecommonlanguageandframeworktodiscusstechnology’scontributiontostrategyexecution
MappedtoValueStreamsandcategorizedbyvalue/criticalityenabledprioritizationandplanning
PrincipalFinancialGroup– Capabilitiesfor:GapAnalysis
ManyuncoordinatedeffortsinAccountingGroupsacrossPrincipal
Capabilitiesprovidedthecommonlanguage,understandingoffuturerequirements,andmechanismtoaccesscurrentandfutureneeds
Gapanalysisprovidedobjectiveanalysis,strategicalignment,riskassessment,andprioritization
133
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Huawei– Capabilitiesfor:CustomerExperienceUseCases
HowtoaddressdigitalOpenROADSrequirements?
Usecases,Telcoindustryandlegacyenvironmentdrivecapabilityneeds
Capabilitymapdrivesconsistent,interoperable,solutionarchitectureandroadmap
134
Boeing– Capabilitiesfor:DigitalOperatingModels
Whatisthebestwaytocapturenewdigitaloperatingmodels?
Capabilitiesprovidethestructuredbreakdownoffunctionsinsupportofkeyactivitiesaspartoftheirvaluepropositionandoperatingmodelcanvas
Capabilitymodelssupports‘strategytoexecution’functiontodefineinitiatives
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Capabilities Provide Different Levels of Detail
2.6.3 - Trade Management .
Execution . Venue Routing
§ CIO, CDO, Execs
§ Generic set of
capabilities
required for DX
§ CIO, CDO, VP,
Business Owners
§ Specific capabilities
required for DX in their
industry / goals
§ Expectations for mega-
platform venders
§ Product / Project
owners, VSM
§ Specific functions
to build / buy / rent
§ Expectations for
product vendors
Agenda
§ Digital Transformation Masteries
§ DX Capabilities Framework
§ Business Architecture Review
§ Workshop
§ Retail Example
§ Using the DX Capabilities Framework
§ Conclusion
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DX
Strategy
Capabilities
Strategy
Capability
(L1)Capability
(L1)
Capability
(L1)
IT Supply
Business Value
implement
Prioritization and Initiatives
Capability
(L2)Capability
(L2)Capability
(L2)
Taxonomy
Classification
Vocabulary
Project Implementation
Capabilit
y (L3)Capabilit
y (L3)Capabilit
y (L3)Capabilit
y (L3)Capabilit
y (L3)
Consistency
Synergy Efficiency
Talent
Technology Processes
TalentGovernance
Data
Governance
Talent
Technology
Processes
TalentGovernance
Data
Governance Talent
Technology
Processes
TalentGovernance
Data
Governance
Resources
portfolio organize
require
Customer 1
Business Outcome
Customer 2
Business Outcome
Business Cases
enable
Pla
nn
ing
De
live
ry
Cost
Use
Case
Use
CaseUse
Case
Use
Case
Use
Case
Use
Case
Use
CaseUse
Case
Use
Case
Use
Case
IT Demand
Service Consumption
compose
Digital
Platform
3rd
Platform
Capability Relationships
Services
IT
Svc
IT
Svc
IT
Svc
IT
Svc
Business
Service
Business
Service
Customer
Facing
Service
Ecosystem
Service
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When digital capabilities are adopted across functions or
along an entire value chain, they synergistically reinforce
each other and generate benefits that extend beyond
the area of their immediate application.
• Michael Nilles, CIO, Schindler Group, and CEO, Schindler Digital Business AG
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Final Thoughts
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Transformational Vision
141
§ Establish the �Big Picture�which sets the goals, constraints
and context
§ In 1939, Franklin Roosevelt
called the head of the highway
program in his office and drew a
few lines on a map that indicated
where a set of national
�superhighways”
should go.
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Incremental Implementation
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§ Develop a road map
§ Start small, learn and refine
§ Incorporate changes
and expand
§ Constantly deliver value
§ In 1954, Dwight Eisenhower
signed into law the largest
construction program of all
time, the U.S. Interstate
Highway Program
§ We�re still building it…
MikeRosenMikeRosen
ResearchVicePresidentIDCExecutiveProgram
Thanks
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