Product Generator (2 of 3)

So how do we find great product and service ideas? By thinking in the box, at the boundaries, out of the box and beyond!

Explore the idea of the “adjacent possible”, looking for opportunities enabled by emerging technologies, services, social and other changes, that are now just possible and satisfy an existing need in a new way. Examples were the miniaturisation of disk drives facilitating the idea of mobile digital music players and of pervasive internet and mobile technology facilitating music streaming. Also Software as a Service (SaaS) offerings exploiting the availability of networks, cloud platforms and subscription models. Machine Learning is opening up opportunities in medical analysis. Speech assistants are enabling new kinds of interfaces to electronic products.

Seek “blue ocean” opportunities. Instead of competing fiercely in saturated, highly competitive spaces (the “red ocean”), we look for opportunities which satisfy a need in a new and novel way, where there is currently no or very little competition. An example would be early products delivering voice telephony over digital channels (voice over IP or VOIP). Tesla has famously exploited this kind of approach in bringing fully electric cars to consumers.

Exploit digital. Make products “softer”, replacing expensive hardware with software or data: replacing atoms with bits. Make copies electronically rather than through manufacturing. Hold inventory as patterns of bits which can be duplicated and distributed with almost zero cost. Automate processes, so they can scale without extra staff or effort.

Consider the portfolio view of products and services and where they are in their lifecycle and adoption. Ensure balance across the stages.

Try to launch and get feedback as quickly as possible. Build prototypes and get rapid feedback. Explore Design Thinking to really understand the customer requirements. Build a Minimum Viable Product (MVP) and get customer feedback. Pivot where necessary.

Look for platform plays or intermediary roles. Own the customer and transaction and make a margin, without needing to own the assets or physically deliver the service. Most of the exponential businesses that have exploded in the last decade exploited these ideas. Consider Facebook which facilitates messaging, but produces no content; Youtube which is a major entertainment provider, but owns and creates no content. Amazon is a platform and an aggregator, selling millions of products from thousands of suppliers.

Consider innovative business models that satisfy the same need in a different and better way. A customer may really want personal mobility, not necessarily a car, or ambient music delivered on demand, rather than a sound system. Here it is often useful to “abstract up” asking the questions: What does this achieve for the customer? Why does the customer buy this product/service?

#Strategy #Product #EnterpriseArchitecture #BusinessArchitecture #Innovation

Product Generator (1 of 3)

What does a great product look like in 2022? Actually, it’s not a product, but a service or a platform or a model! Or maybe even a feeling...

Whaaat? Yep.

The truth is that people don’t buy products. They buy some transformation that they want. I want my feet to stop hurting, I buy shoes. I want my children to have a better life, I buy an education annuity. I want to satisfy my craving, I buy chocolate. I want to impress my partner, I buy a great outfit.

Transformations are as easily satisfied by a service, platform, model, algorithm or design as by an actual product. My desire might be to enjoy a particular genre of music. This could be satisfied by (a) buying a CD (b) buying a track on iTunes (c) streaming audio from Spotify. If I need holiday accommodation, I can use a hotel, Booking.com or AirBnB. Interestingly, iTunes, Spotify, Booking.com and AirBnB are all platforms. They do not own the assets or services on sale, but they facilitate the client’s access to them while also acting as channels for the sellers. In the case of iTunes and Spotify, notice too that the product has also become digital - morphing from physical media to digital streams. These models allow taking advantage of the “long tail” phenomenon whereby the cost of inventory and distribution becomes near zero and the platform can offer essentially infinite variety and choice.

Client experience and emotion also play a large role. When you buy a property (a major financial, long term commitment), you will probably make a very logical checklist of requirements before going to view any properties. But you will buy one which doesn’t meet the requirements, because it “felt right” or “smelt right” or “had great light”. We will then go back to the list and adjust and reprioritise until it fits our choice… Brands like Apple and Nike know this all too well. They invest huge effort in building the lifestyle image, client experience and emotional highs their clients will experience from using their products and services.

New value today is potentially delivered “out of thin air” - think of a virtual product such as Bitcoin, which is essentially an algorithm for calculating a number. Yet it has become a major asset class with serious investment houses putting 5% of their assets into it and similar offerings in 2022. Other examples are an algorithm that improves fuel consumption in transportation, or a model for how to organise components on a semiconductor die.

Modern consumers are also used to instant gratification, based on experience of mobile technology, apps and streaming. We need to ensure that our product/service is very easy to find, evaluate, try out, purchase and use. This should be as friction- and noiseless as possible.

In the second part of this post, we will explore how to come up with and evaluate product/service ideas.

#Product #Innovation #Strategy #BusinessArchitecture #Service

Unifying Motivation

It’s pretty standard to consider Mission, Goals and Objectives when doing a business architecture. Some use functional decomposition to increase the rigour of ensuring that these are aligned. Maybe we draft a Vision - a shared and inspiring description of a desirable future state. But what of the other reasons we do things? From traditional SWOT analysis come the Strengths we want to capitalise on, the Weaknesses we want to eliminate, the Opportunities we want to exploit and the Threats that we should minimise.

Once we start to bring in outside factors, such as threats and opportunities, we may as well get more comprehensive and look at STEEPLED analysis: Social, Technology, Economic, Environmental, Political, Legislative, Ethical and Demographic factors that may influence plans and actions. Social change may involve nuclear versus extended families; urbanisation, unemployment, etc. Environment factors may mean dwindling resources, avoiding pollution, or creating circular business models. Political factors may dictate which products are viable in a given market. Legislation may require compliance, restrict services we can offer, or dictate hiring policies. Ethics may dictate that we change business practices. Demographic changes, such as an ageing and better educated population, may affect product design.

We can add the concept of Drivers (which overlaps with the preceding), looking for factors that require us to change. Examples include: Competition, Cost or other ratios, Technologies important in our industry, Values and Ethos of the business, etc.

If we analyse capabilities (possibly within value chains / networks / streams), and have a clear vision / mission / goals, then we can also do a Gap Analysis of what is missing to get there. Addressing capability gaps generates clear goals and potentially, initiatives to address them.

Another dimension is our Product and Services portfolio. Which ones are profitable? Which ones are where in their lifecycle? Which ones are sustainable? Which fit best with the contextual analysis we have done? What becomes possible with new technologies, design thinking or innovative business models?

Finally, we can also do a Business Health check (a multi-dimensional review taking in many strategic dimensions including: strategy, management, architecture, human resources, assets and liabilities, profitability, cash flow, return on investment, geographic coverage, shareholding, partnerships, channels, information use, risk management, agility, etc. ) or at least a Balanced Scorecard.

All of the above can be integrated into a coherent Motivation Model. This should be constructed to be compliant with our Business and Architecture Principles which guide what we will and will not do and how we will go about achieving it.

Why do we need to change? What does a desirable future look like? What needs to change? How can we go about it?

#Strategy #Motivation #BusinessArchitecture #EnterpriseArchitecture

Positioning Business Architecture

Popular Enterprise Architecture methods position Enterprise Architecture, including Business Architecture, within I.T. and reporting to the CIO or CTO. This reflects the history of how EA methods have arisen: initially addressing Technology, then Applications and Data. As I.T. became more strategic and vital to business and businesses realised they needed alignment with I.T., management of costs and risks, the Business Architecture domain was added or expanded.

For most current EA methods, this is very much I.T. looking at the business to understand the organisation structure, processes and (maybe) value chains and capabilities which I.T. should enable and support. This may be OK for Enterprise I.T. Architecture, but is not true Business Architecture. The latter should be architecting the business and its future within the context where it operates. Given this perspective, Business Architecture should be outside of I.T., possibly in a Strategy or Business Change area. It should report to the Chief Strategy/Change/Executive/Operations Officer. Some advanced organisations now have a Chief Architect at ExCo level, responsible for all aspects of change and future planning.

The danger if Business Architecture reports to I.T. is that the agenda and priorities will be driven from this perspective. We watched this happen in a client organisation. They had a fairly new but competent Business Architecture function which was working well and initiating and guiding strategic change. The I.T. function was not performing as well and they hired a new high powered CIO to take that over. He lobbied hard and was successful in bringing the Business Architecture function under his control. Within two years it had lost all effectiveness as an agent of strategic business change.

By contrast we assisted another client to establish an EA function, and a Business Architecture competency from scratch. The Business Architecture function reported directly to the Office of the CEO, who was also its sponsor. A PMO was set up to drive the change projects, and the triumvirate of Business Architecture, PMO and IT (Including Enterprise I.T. Architecture) proved highly effective in driving a major strategic transformation programme including many non-I.T. aspects over a period of three years (and ongoing).

The diagram indicates how pivotal a good Business Architecture function can be. It informs the other architectures below it to ensure alignment. It drives business initiatives, which deliver competencies to operate the business.

The picture, of a lookout post in Israel, is a bit more tongue in cheek. It illustrates the current position of many Business Architecture functions - high up, but precarious!

#BusinessArchitecture #Strategy #EnterpriseArchitecture #StrategicAlignment

Satisfied Stakeholders

A stakeholder is someone (person, entity) that has an interest in the outcome of something. An investor in a business is a stakeholder, as are its CEO and its suppliers and its staff members. A sponsor in a project is a stakeholder, as are the people who will use the resulting system and maintain it. Stakeholders have different perspectives, motivations and expectations. Often, we will rely upon stakeholders for things that we want: investment, information, participation, approval, support, resources… So, it is really important to identify stakeholders, keep them engaged and to meet their expectations (within reason and without compromising our own goals).

Another reason to really keep an eye on stakeholders is this: If we are a business, we prosper to the extent that we continue to deliver value to our stakeholders; delivering that value requires capabilities, which in turn rely upon people, processes, systems, data, technology etc. So this guides where we put our focus and what we need to optimise in our business and enterprise architecture.

From a project perspective, our stakeholders are providing inputs (money, information, resources etc.) with the expectation of some desirable change or result (e.g. a new process, product, system etc. ). To produce the outputs that they require, we will need to carry out various tasks, apply skills, resources and effort to produce various artefacts. If we pay attention to what stakeholders need, we can translate that to product models (configurations of deliverables if you like), the tasks required to produce them, and the people, skills, resources and tools needed to perform the tasks. So, stakeholders can lead us directly into good project plans.

A technique we have evolved to rapidly analyse stakeholder interaction is the Stakeholder Net Value Exchange. This puts an enterprise or project in a central “black box”, surrounded by Stakeholder Types (e.g. Customer) & some important independent Stakeholders (e.g. Industry Regulator). We connect the stakeholders to the entity via edges in the direction of Value flow. You can think of these relationships as Stakeholder provides Value to Entity (inbound) or Stakeholder expects Value from Entity (outbound). For a compact diagram, the value can be recorded as text on the arrow. For a richer diagram (where we can start to see commonality etc. and define values more deeply) we put a Value symbol on the flow.

It is really illuminating to see an Enterprise or a Project from this perspective. It is also possible to model more than one collaborating entity this way, e.g. ourselves and a strategic business partner.
More detailed analysis easily ensues: We need to include all the Stakeholder types as concepts in our Domain Model; We can contemplate what Business Events occur with each Stakeholder, what Business Communication results and which Processes support them.

#Stakeholder #projectmanagement #enterprisearchitecture #businessarchitecture

Agile Process or Artefact?

There is much hype around Agile these days. We know that things are moving faster than ever and that “slow business is no business”.

There are agile methods, agile techniques, agile projects, agile best practices, agile coaches and agile certifications. But how many agile businesses are there?

I support the original tenets of the Agile Manifesto and the teachings of the founders. They highlight user involvement, refinement through iteration, communication, flexible working and trust relationships between business and technologists. All good things.

I do have a problem with agile dogma and religion in the absence of other essentials for Agile practices to work. These essentials include: high skill, small teams, continuity of resources, trust and attention to quality and testing. Agile should also not be used as an excuse to bin architecture, requirements definition and documentation.

I often see Agile abused to “crank the handle harder” in development projects in an attempt by business to get to functional goals earlier. The emphasis here is wrong. We don’t need a more pressured process, we need a better result: higher quality (better matching requirements) and more adaptable to future requirements.

Using a building analogy, many Agile projects are “laying bricks faster”. This may be without fully understanding requirements, proper design for safety, scalability and still creating a “fixed” artefact, namely a brick and mortar building. If requirements change, as business evolution dictates they will, another project is required to break down elements and build others.

I suggest we should be building more flexible artefacts. Take a conference centre, which must host a sports match one day, a book fair the next, on the weekend a rock concert and the following week a motor show. We know it has to be flexible and that we won't have time to rebuild. Flexibility is thus a stable requirement. Knowing that, we can design and build for it, even using a conventional construction approach. We can build a shell with large open, reconfigurable spaces, movable walls, power outlets in the floors, lighting on tracks, etc. This will allow the user community to alter the building themselves in a matter of hours.

We need Architecture to identify high level stakeholder requirements and change dimensions and try out conceptual options rapidly, partition elements that can be tackled by separate teams with defined interfaces and then to guide implementation. The construction itself could be agile or conventional. The former offers advantages where some requirements and suitable solutions are not known and need to be tried, prototyped and refined. Using an Agile approach requires high skills, stable teams, continuity of resources as well as a high trust from sponsors.

The solutions should be documented so they are easily used by the operators and maintainable for adaptation.

#Agile #SolutionArchitecture #EnterpriseArchitecture

Data Models in Business Architecture? Sure!

Many argue that data considerations are too technical for the business and should be the preserve of data and information architects or data scientists. However, current wisdom says that data is a business asset from which we should gain value and strategic advantage. Data ownership and responsibility should vest in the business, with IT being custodians and curators.

How do we resolve this paradox? Simple: its a T-shaped problem. Business Architecture is at a high level of abstraction, broad in coverage, but not detailed in depth. It is the horizontal bar of the T. Information Architecture is like the stem of the T. It has a number of layers of abstraction, including subject areas, conceptual models, logical models and physical models. Alongside those is meta data to map between the layers, cross reference usage, communities, implementations, security, ownership and myriad other concerns.

The overlap between the vertical and horizontal is where data should be in business architecture, as a Domain Model. This is at a conceptual level and includes the concepts of importance to the business. The Domain is the “subject of discourse”, in practical terms, the industry, such as Telecommunications, Retail, Manufacturing, Education or Health Care. The Domain Model should cover all relevant business concepts, but not include any technology specific details, or detailed requirements. It’s the 3000 metre view of data.
It should include: Concept Names, Definitions, Sample Instances, Identifying Properties, Relationships (Type/SubType, Containment, Association, Role). It may contain cardinalities/ratios, but these are not essential. Concepts can be grouped into useful subject areas, such as Finance, Product, Customer, etc. There should be a graphical view and a business glossary. It might be derived from or aligned to an industry reference model.

So what do we do with it? Lots! It is a Rosetta Stone to facilitate accurate communication between business communities and from there to technical communities. It gives us the nouns for our discussions around ownership, sharing, privacy, security, archival, requirements, business rules and more. It allows us to track progress w.r.t. data automation, migration, sharing, security, privacy management and metrics and quality. It facilitates consensus and integration. It helps to prevent duplication and integrity problems. It helps us leverage data as an asset and provides the platform for digital transformation.

#businessarchitecture #dataarchitecture #enterprisearchitecture #conceptualmodel

The Essence of Architecture

I am always astonished how many architects I meet who don’t know where the term comes from!

Way back when, wooden buildings were the norm for larger structures. They had issues such as rot and susceptibility to fire, but seemed to be the most available means of creating useful spaces with a reasonable amount of available material.

Stone was attractive because it was durable, non-flammable and available, but building large structures was near impossible because, as the size increased, the amount of stone, and the weight, increased as the cube of the dimensions. For a lintel across an opening, or a beam under a roof, the length was very limited before the weight became ridiculous and structures would collapse under their own weight. You could of course build a very large, almost solid, structure such as a pyramid, but that provided very little usable space for a huge investment of resources and effort.

Then someone invented the arch. This is very powerful, as the material doesn’t carry the weight, but transfers it downwards, finally to the ground. People who knew how to build arches became known as “architects”* and were sought after to allow the construction of large buildings (like courts, cathedrals, halls and civic buildings) and structures (like bridges, viaducts and aqueducts). Advantages included utility of the resulting structures, durability, reduction in materials required and elegance.

So, as architects, we should strive to deliver things of value and utility, with less resources, more quickly. The things we deliver should meet the requirements of their sponsors, delight their users, be durable and safe and make use of readily available resources. We could also add that the resources should be able to be replenished or recycled and that the result of our work should have minimum negative impact on its surroundings, while integrating seamlessly into its context. Finally, the inclusion of building in the scope means that the job is not done when the plan is drawn, but when the solution is delivered and usable.

*The word archi comes from the Greek arkhi and means a chief or leader. The tect part comes from the Greek tekton meaning builder. So an architect is a master or chief builder. There is also arc in Old English, meaning a curved or bow shape. Interesting that master builders also build bow-shaped arches!

#Architecture #EnterpriseArchitecture #Etymology

A Contrary View on Capability

Capabilities are fashionable. Everyone is modelling them, but not always well… And just what is a capability?

Popular business and EA methods use it more or less interchangeably with a “Business Function”, i.e. something we do. I differ.

Capabilities are often listed below a value chain/network to support the delivery of the value adding steps. This is all well and good. Often stated in simple phrases such as “Attract Talent”, “Create Desirable Products”. In this form they are equal to business functions. Less usefully, they will sometimes be stated as nouns, e.g. “Human Resources” or “Accounting”. These are vague at best and equate more to organisational units or departments.

Other methods include goal, process and service modelling. How do we make sense of all these? Are they competing or complementary?

One technique useful for all of them is decomposition - breaking down higher level goals / concepts / requirements to more detail or more concrete ones.

We can decompose Mission into Goals and Objectives; Mission into Functions; Processes into sub-processes and activities; Services into service components, etc. Can they be integrated? Fortunately, yes! Mission, Goals and Objectives are about what we want to achieve, independent of what needs to be done or how. They can provide a starting point for our decomposition. One mission breaks down into goals (broad directions) which break down into objectives (specific, measurable, achievable, realistic, time bounded). Mission (or objectives) can also be decomposed into functions: what must we do to achieve the goals? Functions should have a verb (doing something), an object (to what?) and qualifying clauses (how, with what constraints).

Functions can be sequenced on dependencies to form end to end business processes. Functions and processes can be packaged as services, with providers (who does it?), consumers (who uses it?), inputs (what is necessary to do it?), outputs (what is expected as a result?) and service levels. We need a catalogue of available services, and a designated way to invoke them.

Ah, but what of capabilities? Well, functions, processes, services can all deliver capabilities. A capability implies the ability to do something (function) for someone/thing (consumer) producing a desired result (service/product) at a particular location, with a certain service level (e.g. volume, efficiency, accuracy, etc. ) and potentially other requirements (e.g. in a particular language). To deliver a capability will typically require resources, such as skill, information, application support, infrastructure and physical presence.

There is nothing wrong with defining business functions (proto-capabilities) at a high level below the value chain. We should ensure, however, that they are expanded into full capabilities during later design to deliver all the dimensions required.

#Capability #EnterpriseModelling #BusinessModelling #EnterpriseArchitecture

Role of the Repository

As architects we use many models and produce/share a lot of artefacts (models, documents, presentations, plans, posters). We collect a lot of references and create many “working files” (such as notes, spreadsheets, outlines, templates). We share with other parties in business, I.T., vendors and advisors.

It is a daunting task to keep all of this stuff straight, to find it when we want it, to ensure that we have the right version. Difficult to make a consistent change across the various mentions of a particular thing, for example: a Business Unit has been renamed - how can we reflect that across all references in all the various models and documents?

We can of course build a library of documents, often a network drive or Sharepoint portal. This may start out well, but often quickly devolves into a large bucket. A better solution is to have electronic document management, where artefacts are stored, indexed, versioned, searchable and sharable with appropriate permissions. This can work well with appropriate discipline. It still suffers from the maintenance problem we mentioned. E.g. Updating things mentioned _inside_ models, presentations and other artefacts consistently.

This is where we need a proper repository. This may do document management too: the key difference is that a repository will manage _objects_. These can be course grained, such as the documents and models mentioned. They can also be fine grained, such as the things of interest inside the documents, models etc. A repository allows having the same object reflected in multiple models, documents, reports, matrices etc. This greatly facilitates impact analysis and maintenance to ensure consistency. It also allows integration of different domains or perspectives. For example, I can mention Business Objects (which derive from a Conceptual Data Model) in a Business Process Model, or a Requirement Specification for a Business Intelligence Dashboard.

To provide this sort of flexibility, the repository should allow customisation of meta models. I.e. we should be able to define: the concepts we are interested in, the relationships that they can have to other concepts, the properties that are important to a concept. Also, how we want to represent the information in various ways including: forms, reports, models, documents, matrices, etc. The repository solution should provides easy import from standard formats as well as APIs for easy integration to other tooling. Global search facilities and a strong security system are valuable too.

Our EVA toolset provides such a repository. The philosophy is that it's easy to capture information from a variety of sources: CSV, XML, Web Forms, Graphical Modelling; store it all semantically regardless of source; use it for analysis; and output in many forms: Query, Lists, Matrices, Visualisations, Graphical Models, etc.

Read more about EVA here.

#enterprisearchitecture #enterprisemodelling #repository #tools