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AT#24: Capability Modeling Crash Course Part 1

AT#24: Capability Modeling Crash Course Part 1

In recent years, the idea of business capability modeling has emerged in the EA community. Much has been written about the idea of capability modeling, and it can even be said that we are facing a ‘capability hype’. You can find capability models for many industries on the internet. There are many industry-specific consortiums that try to model the business functions of that particular industry in the form of capabilities.

Capability modeling seems simple but is hard to do in practice. If you browse literature or the internet you’ll find only very little advice. No ‘Capability Modeling Guide’ out there. To change that, the Architectural Thinking Framework includes a draft of detailed guidelines that show how to model capabilities step-by-step.

Today we start a series of three blog posts that provide a capability modeling crash course. It includes the experience of ten years of trial and error in several companies and review by many practitioners.

 

Definition: Capability

A business capability is a core of ‘what’ a business does, a technique for the representation of an organisation’s business anchor model, independent of the organisation’s structure, processes, people or domains [GartnerGlossary]

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AT#23: How to use your Wisdom to make existing Practices agile

AT#23: How to use your Wisdom to make existing Practices agile

Whenever I discuss with people from the Agile world what ‘Agile’ is all about, they tell me that it’s very core is a mindset that is established through values and principles.

All agile practices, methods, and frameworks evolve out of this mindset. Ahmed Sidky visualizes this idea in his ->webinar:

 

 

When I saw this picture my gut told me that there is something fundamentally wrong with this idea. It took me weeks to find out why: Read More

AT#22: Digital Transformation – What Companies should learn from ‘Christkindlmarkt’ Vienna

AT#22: Digital Transformation – What Companies should learn from ‘Christkindlmarkt’ Vienna

A recent article by an Austrian newspaper stated that the growth in sales of the ‘Christkindlmarkt’ Vienna exceeds the turnover growth of online shops by 30%. At the first instant, I was quite surprised by this fact. After some contemplation, I asked myself questions like:

  • Could it be that we admire companies like Amazon too much?
  • Do we live in an age that believes too much in technology and progress?
  • Are companies of the old economy aware of their tremendous strengths that still keep them in front of innovative startups like Fintechs?
  • Is the hype of digital transformation slowing down because of the reality of real, tangible assets that can not be disrupted by internet companies?

After answering these questions from my point of view I would give the following recommendations: Read More

AT#20: Why Digital Transformation fails without Architecture

AT#20: Why Digital Transformation fails without Architecture

Structure not only increases our chance to success,
it makes us more efficient at it.’ – Marshall Goldsmith

When people discuss digital transformation, they talk mostly about innovation, agility and new technologies. Companies put a tremendous amount of effort into initiatives that should make them more agile and innovative, but most of the companies I know do not manage their innovation initiatives towards a big architectural picture. The overly complex structure of dependencies between innovation- and other projects, and between new technologies and legacy-IT, are not handled with intent. Just present a fancy technology to top-level executives. If it has a low time-to-market and includes AI, chances are high that you can do it. No matter if it’s integration with legacy IT results in unnecessary complexity, ‘technical debt’ that introduces a total cost of ownership that outnumbers the business benefits by far. No matter if it is architecturally sound.

Let’s have a closer look at what ‘architecturally sound’ means, what architecture is all about and why the concept of architecture is helpful, especially in the context of innovation: Read More

AT#19 The only effective Way to drive Digital Transformation

AT#19 The only effective Way to drive Digital Transformation

For a long time, setting the direction of a company was done by a small group of top executives that elaborated a detailed business strategy. Business strategies typically define goals that are normally associated with the creation of value for the coming ten years or so. The concept of ‘Business Strategy’ has been introduced in the 60ies by [Chandler62]. 

This 50+ years old concept is still valid today. What has changed dramatically over these 50+ years is the planning horizon. The notion of ‘long-term’ became shorter and shorter. Today, in the VUCA world, there is no ‘long-term’ anymore. Strategies become more fluid, like software that needs constant upgrading. The reality, today, is that most companies do not have a clearly written out strategy. Why formulate a strategy any more when things are changing before you have your strategy ready?

But how do you make strategic decisions without a clear, verbalized strategy? The answer is given by [Westermann14]:

‘The only effective way we’ve seen to drive transformation is top-down, through strong senior executive direction coupled with methods that engage workers in making the change happen by setting direction, building momentum, and ensuring that the company follows through. This kind of change does not happen through a simple mandate, it must be lead. Among the companies we studied, none have created true digital transformation through a bottom-up approach. Successful transformation starts at the top of the companies’.

What you should do: Read More

AT#18: Use Business Capability Maps as the key to the hidden Treasures of Digital Transformation

AT#18: Use Business Capability Maps as the key to the hidden Treasures of Digital Transformation

Today, every company in the world is looking for ways to transform in the direction of more digital capabilities. Many companies of the old economy look up to companies of the new economy like Amazon or Google and perceive them as role models if not as archetypes. Most of these companies want to become ‘a bit like Amazon’ but forget about one key thing: their existing business capabilities that represent the strengths that made them successful in the past. They do not model their current and strategic future capabilities systematically. They do not use the key to open the treasure chest of digital transformation.

The basic idea of capability modeling is simple: structure the business of a company hierarchically by capabilities it needs to create customer value.

Why is it important to model business capabilities?

  • Capabilities clarify terms and concepts across organizational borders.
  • Capabilities provide a robust skeleton, a framework for assigning all the other elements of the enterprise architecture.
  • Capabilities can be used as the central structure for heat mapping in order to answer questions such as: ‘Which strategic fields of actions do we see in which capability’; ‘In which capabilities are we planning to invest how much?‘; ‘Which capabilities are not supported enough by IT?’
  • Assigning IT-applications to capabilities is a powerful way to support business & IT alignment.

What you should do:

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AT#16: Ten Guidelines for a successful Digital Transformation

AT#16: Ten Guidelines for a successful Digital Transformation

Last week I attended the #1 EAM Conference in Germany, the “Lean42 EAM Conference”

At the closing podium session of the conference, I had the opportunity to discuss the following questions with brilliant people from companies of the old economy and Feras Alsamawi of Amazon:

  • What are the success factors for the digital transformation?
  • What is the contribution of EAM to these success factors?
  • What is different in companies of the old- and the new economy?

After thirty minutes of discussion, we agreed to the following guidelines: Read More

AT#15: How to make decisions in uncertain Times

AT#15: How to make decisions in uncertain Times

To deal with the challenges of the VUCA world, many companies experiment with shifting the idea of agility, as broadly used in software engineering practices in form of e.g. SCRUM to the whole organization. [J. Eckstein: ‘Company-wide Agility’, 2018] gives an overview of more than twenty different approaches for the agile organization. Browsing through these approaches, some of their proponents seem to propose that all decisions should be made decentralized by autonomous teams. Use the knowledge of the many and you will get the right solutions.

But that is far from true.

Grassroots democracy is not a model for companies.  An organization pursues particular business goals dictated by shareholders, the autonomy of the employees is not its primary concern. Which application server software a company chooses to use is not a subject of general elections.

All approaches proposing the agile enterprise do not take one thing into account: architecture. Building solutions in a sound architectural form needs common elements and ‘conceptual integrity’. This means that the concepts and structures of the business (capabilities, value streams, products & services, business objects) and IT (technology components) must play together in a way that maximizes simplicity, consistency, agility and thus business value. Read More

AT#14: The Innovation Steam Train

AT#14: The Innovation Steam Train

In times of the digital transformation, almost all industries are facing challenges caused by highly accelerated technology innovation cycles and new and disrupting competitors.  Today, companies put a tremendous effort into innovation initiatives. A recent Boston Consulting Group survey reported that nine out of ten senior executives believe generating growth through innovation is essential for success in their industry. Innovation is a trend that runs through all organizations, not just a segregated discipline performed by specialized people only. Read More