business model innovation

The digital age has become an impetus for business model innovation, as technology has dramatically changed how companies operate and deliver services to customers. This digital disruption has shortened business model lifecycles and made innovation key to financial success. The global marketplace has further driven the need for business model innovations, as companies must react to stiffer international competition and the increased potential for systemic risk. These factors are forcing companies to turn to business model innovation to stay competitive and foster growth in the competitive global marketplace.

One example of successful business model innovation is changes made by Apple beginning in the early 2000s. Apple's introduction of products and services such as the iPod, iPhone and iTunes expanded the company's offerings beyond the desktop computer market. For example, the iPod and iTunes created ways to profit from downloadable music, while theiPhone was a breakthrough in the smartphone market. Netflix is another example of this type of business innovation: After upending the traditional video rental market, in recent years the company has leveraged new digital technology to gain a competitive advantage in the streaming media business.

Successful business model innovation in the digital age requires an alignment of IT and business objectives, with the ultimate goal being to improve processes throughout the organization. As a result, CIOs other top IT executives play a big role in identifying ways to use new and existing technology to maximize business model innovation success.

SOURCE: SearchCIO

Practical Process: The Primacy of Process

I believe that the primary focus of every organization should be the understanding, management, and continual improvement of the business processes by which customer value is created, accumulated, and delivered. Not the only focus, of course, but by far the most important. This is the essential message of process-based management and once that message is heard, the need for both process management and process improvement is obvious, urgent, and compelling. Let me explain what I mean by, and why I believe in, the ‘primacy of process`. This Column is deliberately short (if I had been in a hurry I would have written a longer one!) because I would like to find a way to succinctly define the key message of process-based management. Have I achieved that? Please let me know.

Process?

Why “process”? The simple view of a process is that it is a collection of cross-functional activities that transforms one or more inputs into one or more outputs. I also include all of the resources, people, systems, infrastructure, policies, regulations—everything that is required to execute and manage the process. Processes are important because this is how organizations get work done.

Primacy?

Why “prime”? Cross-functional business processes are the only way organizations can deliver value to customers and other stakeholders. By themselves, the separate functional areas of an organization cannot deliver value to external parties. An organization`s resources are managed ‘vertically` via the organization chart. Value is created, accumulated, and delivered ‘horizontally` across the organization chart.

It follows that an organization executes its strategic intent via its business processes. The sequence from strategy to execution is shown in the breakout box, From Strategy to Execution.

The only way an organization is able to exchange value with its customers and the way in which it executes its strategy—sounds prime to me!

Implications

If we accept that business processes are the value pathways, as well as the way organizational strategy is operationalized, where does that lead us? The inescapable conclusion must be that the starting point for effective organizational management is to understand, manage, and optimize those business processes. Without a proactive focus on business processes, organizational performance cannot be optimized and strategy cannot be effectively executed.

If value is created, accumulated, and delivered across the organization, what measurements of performance are made in that direction? Do we know if those cross-functional processes are working well? Do we know what “working well” would mean? Do we know where the performance gaps are and if anyone doing anything about them?

If value is created, accumulated, and delivered across the organization, who is in charge of that? The organization chart is silent on such cross-functional matters. Sure, we can say that the CEO is responsible for everything, but she knew that and it doesn`t help. Can it really be a good idea that the path through which we exchange value with our customers is not managed?

Relationship to Business/Enterprise Architecture

I`ve said that process performance should be the primary focus of an organization, but not the only focus. There are many other aspects and the positioning of the many other architectural elements naturally arises.

There are many “architecture” types. As well as business architectures and enterprise architectures, there are architectures that address IT, information, capabilities, services, systems, rules, applications, organizations, and people. This Column does not seek to either explain or reconcile the many views of business or enterprise architecture, but it does have a particular architectural stance—the primacy of process—and this requires that processes be the focal point of any architectural view. All of the common architectural perspectives are valid[1], but the process context is fundamental and each other perspective has a direct relationship to it. While other constructs are useful and often vital, particularly to guide information systems, the tendency to define ‘every` object and show the relationships to ‘every other` object via abstract diagrams, may be of limited benefit to managers.

Accepting the ‘primacy of process` principle, and starting with the process architecture, allows an organization to focus on the purpose and performance of the value pathways. Other architectural elements can be added when they are be shown to add value, when they are an aid to management and not a further complication.

Conclusions

Management needs its own disruption. A practical and pragmatic approach to understanding the organization as a system for value creation, accumulation, and delivery is required. Clear links between strategy and process execution must be defined. Mechanisms for identifying, managing, and improving process performance must be realized.

Organizations must reimagine their operations as value creation and delivery flows.

In Practice…

There are many things you might do in response to the issues discussed in this Column. Here are three practical steps you might consider doing now to get started on the creation of sustainable process-based management and process improvement.

Discover the value pathways

Document the process architecture for your organization. Find the strategy statements and determine who are the customers and other stakeholders and your organization`s value proposition for them. These are likely your core highest level processes. Decompose those processes down a level or two.

Agree on performance targets

If those processes were working as well as the key stakeholders would like them to, what would they be doing? How would you know? Define and document the critical few performance measures.

Mind the gaps

Capture the performance data and make evidence-based decisions about what to do for any performance gaps.

[1] Although I still struggle to see how ‘capabilities` add value that is not already provided by ‘processes`, but we`ll leave that for another day

SOURCE: BP Trends

What is the value of Business Architecture?

Creating Sustainable Process Based Management

For many organizations, and their teams and people, there is a significant disconnect between strategy and process, between the mission-vision-values statements or their equivalents and the business process pathways that operationalize the strategy. Strategy development is inherently a top-down activity. Business process management and improvement is often conducted in a bottom-up or middle-out fashion. With the strategic view ‘coming down’ and the process view ‘going up’ there is a real chance that both fade to gray before they meet. In the resulting ‘gray zone’ the strategy loses its clarity and purpose and process activity fails to coalesce into holistic management practice. Too many organizations end up with two seemingly unrelated conceptual views of the enterprise: the strategy, perhaps with strategy themes and a strategy map, and the process view shaped as value chains, process hierarchies and detailed models. Nice PowerPoint, love the artwork — but no practical support for improvement aspirations.

Developing a more coherent view of the inter-relationships between strategy and process makes it much more likely that the strategy will be executed and the processes will be effectively managed. Win-win. Let’s see how that might work.

Developing Strategy

I don’t want to downplay the difficulty and complexity of developing statements of strategic intent (mission, vision, value etc.) but it does seem that this activity is sometimes made more complex than it needs to be. Where there is disagreement amongst the stakeholders then, of course, that can make life very difficult. What need not be difficult is the approach to facilitating and resolving those discussions.

Developing strategy is essentially about answering three questions:

1. Who are we?
2. Who are our customers and other stakeholders?
3. What we do for each other?

Who are we? What do we want to achieve? What do we have to offer? What are our strengths and weaknesses? How are we different to others?

Who are our customers and other stakeholders? Who will want our offerings? Why us? What is our target market? Apart from customers, who else must be satisfied?

The Whyte & Brite Laundry has operated successfully for six years and now employs 73 staff. When they first started, it was just the two of them working out of Mike Whyte’s garage. Now they have a large purpose-built site with an investment of nearly a million dollars in plant and equipment and two types of customers: commercial and personal.

Personal customers are individuals who bring clothes to Whyte & Brite for cleaning and, where required, ironing. They also return to collect their clothes. Mike and his partner Barbara Brite know that the key to the personal customer business is friendly, personal service.

Commercial customers, e.g. hotels and hospitals, have large amounts of regular washing. Whyte & Brite tender for this work and the resulting contracts detail charges and service levels in relation to on-time delivery of high quality service. There is little personal contact and performance is measured on contractual terms.

Mike and Barbara had been considering a new service where they purchase the sheets, towels and other items and effectively lease them to the commercial customers.

The Whyte & Brite Laundry (see description above) has been through their strategy development exercises. They’ve produced mission and vision statements, along with strategic objectives and a strategy map that highlights strategy themes. This gives a coherent view of who they are, who their customers are, why they choose them, and what they offer each other.

They have four strategy themes:

• Customer Care Excellence
• Service Innovation
• Environmental Excellence
• Organizational Capital Development Excellence.

These four themes define their strategic intent.

A diagram I find very useful in many contexts is the organization diagram from the BPTrends Enterprise Certificate training course. This diagram, derived from the Rummler and Brache Relationship Map1, can be used in many ways and becomes a form of diagramatic repository

for strategy and process information. The example in Figure 1 shows the strategy themes for the Whyte & Brite Laundry. In this diagram the large colored box is the Whyte & Brite organizational and everything outside of the box is the external environment in which it operates.

We’ll leave Mike and Barb at Whyte & Brite Laundry, and their strategic intentions, for a moment and come back after we’ve considered the processes that will operationalize their strategy.

Figure 1: Whyte & Brite Laundry Organization Diagram

Managing Processes

As always, to be sure we are talking about the same thing, I summarize my understanding of the BPM philosophy as follows:

Business processes are the collections of cross-functional activities that deliver value to an organization’s external customers and other stakeholders. They are the only way that any organization can deliver such value. Individual functional areas cannot, by themselves, deliver value to external customers. It follows that an organization executes its strategic intent via its business processes. Business processes are the conduits through which value is exchanged between customers and the organization. Therefore, business processes need to be thoughtfully managed and continuously improved to maintain an unimpeded flow of value with customers and other stakeholders.

An organization’s resources are managed ‘vertically’ via the organization chart. Value is created, accumulated, and delivered ‘horizontally’ across that chart. Value is accumulated, not up and down the functions as represented in an organization chart, but across the organization as shown in a business process architecture. The various functions collaborate via business processes to create, accumulate, and deliver value to customers and other stakeholders in the form of a desired product, service, or some other outcome.

The organization chart is effectively silent on the all-important issue of cross-functional process work. It is quite alarming to think that in the many organizations where there is no conscious attention being paid to the management and optimization of cross-functional business processes, nobody is responsible for the creation, accumulation and delivery of value to customers and other stakeholders. This cannot be a good idea.

Starting from that perspective, the critical elements are that we discover our processes, understand how they should perform, know how they are performing, decide what performance gaps are worth closing, and take steps to affect the required closures. And repeat, forever.

The key artifact in effective process-based management is the enterprise process architecture. An enterprise process architecture is a hierarchical model of the processes of an organization. Usually created, initially at least, to include the two or three highest levels, the process architecture provides a powerful visualization and management tool. It includes not just the hierarchical description of process activities, but also the related resources, documentation, performance measures, measurement methods, and governance arrangements.

No doubt there are many ways to shape a process architecture. The way that has proven to work well for many is to distinguish management, core and support processes.

Core processes are the ones that deliver value to the customer. Management and support (sometimes called enabling) processes are there to make it possible for the core processes to work. So Define strategy is a management process, and Support staff lifecycle is a support process. Management processes are generally dealing with policy and strategy; support processes are generally about operational logistics.

Figure 2. In this diagram I have highlighted two particular support processes

At the highest level the core processes are represented by one or more value chains. The value chains represent the value propositions offered by the organization to its customers. Hence the Whyte & Brite process architecture is as shown in because of their relevance to the strategy themes – more on that soon.

The multi-layer process architecture shows all of the processes by which Whyte & Brite delivers value to all of its customers and other stakeholders. Along with process performance measures, measurement methods, and an effective way to respond to performance anomalies, the process architecture addresses the alarming circumstance in the traditional functional model where nobody is in charge of tracking value delivery.

Strategy + Process

Figure 3 closes the loop and shows how the key processes operationalize the strategy. The link between high level processes (and their many sub-processes) and the key elements of the organization’s strategic intent facilitates a clear view of how the strategy is executed. Particular initiatives related to the strategy can now be seen as changes to the related processes. Measurement and management of process performance tracks the execution of the strategy. 

Figure 3. Strategy Themes + Processes

In Practice…

There are many things you might do in response to the issues discussed in this Column. Here are four practical steps you might consider doing now to get started on the creation of sustainable process-based management.

Clarify Strategy

Clarify the organization strategy making sure there is a shared understanding. Can you clearly and consistently answer the three key questions? Who are we? Who are our customers and other stakeholders? What do we expect of each other? Identify the strategy themes and capture them in an organization diagram.

Develop an Enterprise Process Architecture

Define the processes that create, accumulate and deliver value to your customers and other stakeholders. Understand and document the customer value propositions allowing the definition of core value chains. Link the value chains to the strategy themes. Decompose the value chains to at least one more level.

Measure the Processes

If we don’t measure we can’t manage, and we can’t know if we are improving. Determine process performance measures for the value chains and level 1 processes. If these processes were working to the level that the key stakeholders would like, what would they be doing and how would you know?

Manage the Processes

We create, accumulate and deliver value to customers across the organization chart. Products and services are developed and delivered ‘horizontally’ via the collaboration of departments and teams. The organization chart is entirely silent on the critical issue management of cross-functional process activity. Appoint Process Owners to be accountable for responding when the process performance is outside of an acceptable range or trending in that direction.

SOURCE: The Leonardo Blog

Defining and Translating Strategies into Business Processes

Dr. AlBuhairan presents this month's video in which she discusses the methodology she and her colleagues developed to define and translate strategy into business processes at the University Hospital. Dr. AlBuhairan is a 20 year veteran of the health care industry and currently the Deputy Chief Executive Officer for Operational Excellence at King Abdullah bin Abdulaziz University Hospital, Princess Nourah bint Abdulrahman University in Riyadh, Saudi Arabia.

SOURCE: BPTrends

The Top Technology Trends To Watch: 2016 To 2018

Enterprise architects face more exciting — and greater — challenges as the age of the customer takes off. But technology invention, innovation, and spending are notoriously cyclical. In fact, our first tech trends report in 2009 predicted a boom cycle through 2016. And we have seen this — with social, mobile, cloud, analytics, and big data, to name just the obvious ones. A big finding of our research however is this: The Age Of The Customer has changed the classic technology investment cycle.  For example, technology management’s spend will grow about 5% in North America in 2016. This is a decent pace. However, spend on business technology — the things that let firms win, serve, and retain customers — will be double that!

All this new money will shift the focus of investment from point solution inventions toward “end-to-end innovation” by 2018. And by end-to-end, we mean across the customer life-cycle and customer journeys as opposed to classic 'enterprise integration'. This shift will happen in three phases:

• Visionaries will dominate dawning phase trends as they drive point inventions to address specific business organizations’ opportunities.
• Fast followers will discover the limits of point solutions in the awareness phase and begin to work through them.
• Enterprises will shift investment toward integrating capabilities across the customer life cycle in theacceptance phase.

Here is a summary of our top trends from the September report, The Top Technology Trends To Watch: 2016 - 2018. We plotted the trends against our asssessment of point versus end-to-end business investment appetite. The icon colors and shapes indicate our analysis of trend pace. Use this chart to formulate your strategy for each trend. For example, your business will likely not want to hear end-to-end talk about dawning phase trends. But you will need a plan.

Obviously, there is a lot to say about each trend and I encourage you to read the report. But there are a couple of hidden gems that I wanted to point out in closing:

1. Our dawning phase trends (1 and 2) might seem oddly placed given the hype around big data / advanced analytics and the Internet of Things (IoT). But we see visionaries going beyond the ordinary. They know big data isn’t about the data; it is about using insight to drive your business actions. And the IoT isn’t about devices; it’s about the new relationships you create with your customers.
2. Trend 6 is about the impact hyperconnected hyperadopters  are having. They elevate the importance of customer insights and agile investment planning practices as a way of coping. And trend 3 analyzes the resurgence of interest in APIs, not as technology for SOA but as key way of coping with the hyperconnected, mercurial business environment.

  SOURCE: Forrester

Three Major Levels of Business Process Hierarchy

McKinsey on Change Management

BPM Collaboration: The Good, the Bad, and the Ugly – Part I

Collaboration is touted by many as one of the big breakthroughs in BPM.  I agree with that position.  It is a big deal in my opinion – when it works the right way.  However, when it is not properly planned or supported it can be an extremely disruptive force.  The issue is one of controlling participation and contribution – applying the right background, skills, disciplines, and knowledge at the right times and controlling all contribution content, format, and team interaction.

 

The great part of collaboration is that it is an excuse to get people who will be affected to participate.  I have personally managed projects with international business and IT staff members for business functions in multiple geographies.  It can be fun to work with the differences that people bring to the project – but it can also be more than a challenge.

When properly controlled, the results of collaboration can produce exceptional results.  It can improve the possibility of innovation; it can deliver broad acceptance; and it can bring people in different geographies to a common way of performing the work that was in the scope of the project.

 

However, there are challenges with differing policies in different geographies and differences in law and the way people can legally work together.  There are also differences in tool agreements, such as the use of BPMS tools suites and their license agreements.  And, of course there are significant time differences that may need to be considered. But, when you have gone through that once, you will have an idea of what to look for in any future collaborations, so these issues are really part of collaboration start-up.

 

Collaboration and Real Involvement

 

I have found that just because a person has been assigned to be part of a collaborative team, it does not automatically mean the person will engage and be involved to the extent he or she may need to be.  Involvement is really a matter of priorities – which can quickly impact commitments.  This is especially a problem when groups in different geographies are involved.  In these projects, actual work effort is hard to control and actual status is really impossible to accurately evaluate until a deliverable is due.

 

This risk can be minimized by:

• Having frequent small deliverable components that will later be blended to form the person’s product – giving insight into performance and quality
• Having formally agreed upon staff alternates in each geography who can step in if necessary

To make this work, the requirements will need to be included in the project collaboration standards and applied to all projects that have staff in multiple locations. 

 

In addition, language and associated accents can present barriers that must be mitigated.  I have been on projects with international teams where some members use language and understanding what they committed to as excuses for non-performance. To avoid this, all agreed upon activities should be confirmed in writing.  There will always be bad apples in any group and when found need to be dealt with according to company policy.

 

In addition, we cannot presume that affected business managers or their staff will agree to be involved in a business improvement project.  While on the surface the need for this involvement is obvious, the real world often intrudes.  We all hear “We don’t have time to get involved”, “We never get what we want anyway – IT just does what they want” and a thousand similar excuses for not participating.  The unfortunate fact is that many companies are running so lean, that they really do not have an ability to spare staff time without it impacting the operation.  Upper level support is critical to make certain that key people can participate when this situation arises.

 

To succeed we must have adequate business user participation.  At times we have adjusted to this through planned overtime of the person we need to see or for someone who will fill in while that person is with the team.  The way to deal with this will vary by company and possibly by union agreement, but if there is participation problems the sponsor must work them out with the participating department managers.

 

So, I recommend that each member of a collaborative team be assigned a formal role – with written expectations for time, contribution, and commitment.  This allows the manager to promote actual involvement and monitor real participation.

 

Controlling Collaboration

 

Managing a truly collaborative international team is different from traditional project management and the project execution, which I look at as being different from project management.  It requires a new set of skills that are based on conflict management and the authority to govern the team – and control the team’s interaction dynamics.  To a large degree, it also requires an ability to infer from the information that you are given to avoid finger pointing and provide control over situations that you can only influence – if people are not in front of you, you need to find other ways to manage them.

 

The most potentially volatile situation that must be faced is that everyone brings a different perspective, driven by different experience and following different disciplines, standards, and rules.  These are personal biases and we all have them.  At times, project participants will have issues with other disciplines, their approaches, philosophies or techniques, or project management methods.  This conflict is often apparent between Process Architects, Business Architects, and Enterprise Architects – all of whom often believe that business transformation must follow their approach.  

 

Melding the use of these disciplines and their approaches is challenging, but it can be and needs to be done for each project requiring multiple contributions from people with strong feelings about their chosen disciplines.  It is also much better to debate this out ahead of time – as early in the project as possible and reach a consensus that everyone needs to agree to follow.  There will still be grumblers but anyone who may try to sabotage the project so it shifts to their approach will need to be closely managed or may even need to be eliminated from the team.  So acceptance of a negotiated approach that leverages the best of all the participant disciplines should be considered to be a critical milestone in the project.

 

While the whole purpose of collaboration is to gain access to these unique potential contributions, unless there is pre-planned and governed, interaction chaos can easily result and the project actually deteriorate into a mess.  While to some extent this is a project management issue, it is even more an issue of participant and contribution orchestration and approach control.  In this context, orchestration is the governance of deliverable design and the strength to meld differing opinions, disciplines, and perspectives into a single cohesive approach to task execution.

 

When supported by a BPM modeler or full BPMS product suite, this collaboration can include the ability for people from different parts of the business, different business partners, and possibly customers to work together on models and contribute to a change in a business operation.  

 

That is 'the Good'!

 

However, as noted above, an unintended consequence of collaboration is that it pulls in people together who have very different ways of doing things, different problems, and different opinions.  If some are “stronger” than others, natural bullying will begin and proliferate if not stopped by a strong project manager.  Culture, nationalism, and even religion can all get mixed in and sorting it all out requires both cultural sensitivity and management strength.  I have found that a way to handle this is to create rules that help you sort through what is going on and encourage everyone into compliance.  This approach should remove most barriers – the rules are the rules and everyone agreed on them ahead of time.  Enforcing the rules is thus impersonal.

SOURCE: processexcellencenetwork

Elite Business Architecture Leaders Focus On Stakeholder Needs; Do You?

Over the last few months I have met or spoken to a significant number of Forrester clients who are undertaking a business architecture initiative. As you can imagine, these initiatives have various sponsors and are at various levels of maturity. Some business architecture (BA) initiatives are being driven by chief information officers (CIOs) and chief technology officers (CTOs) wanting to get a seat, and become an influencer, at the strategic decision-making table. Whilst others are being driven by business executives, who either believe business design and transformation is a business responsibility or that IT has insufficient business competency to understand and deliver what is required.

The different levels of maturity struck me, as just like the English Premier League (that’s where real football is played, for those not in the know) there are the elite (the big boys – top five or six teams) and there are the also-rans/others. There are also the elite BA teams and the non-elite BA teams. The gap between these two groups is growing, which will be a nightmare for a non-elite BA leader benchmarking his initiative against other organizations. Where one could argue in the football reference it is money that divides the two groups, as this attracts better players and creates better teams, with BA teams it appears to be more based on focus. Less mature and non-elite BA teams focus their efforts primarily on the building of BA, reacting to siloed demand and then selling or pushing BA artifacts to stakeholders in the hope that they find these artifacts useful. Whereas, the elite BA teams focus on addressing stakeholder needs and the use of BA, delivering relevant BA services and allowing stakeholders to pull the BA artifacts that address the challenges they face.

If you feel that you are one of the non-elite BA teams, are looking to relaunch your BA initiative, or believe you are ready to join the elite group, your starting point should be to define, assess, or redefine your coherent BA strategy. Without a coherent strategy, BA practices will maintain a reactive focus that will result in:

• Your BA initiative not reflecting its true potential. The holistic needs of the organization will be bypassed as preference is given to siloed demand and addressing short-term needs. In turn, the BA, though evolving, will never be sufficient to be recognized as a necessity for assisting strategic decision-making. Therefore BA does not realize its potential to support or reflect the organization’s strategic intent.
• Your BA efforts not being recognized as providing real value. By reacting to short-term demand, BA practices miss the opportunity to assist the organization in realizing its longer-term goals. BA initiatives will have insufficient time to plan more efficient and effective road maps toward the transformation vision. Thus, BA initiatives will assist the delivery of Band Aid solutions that inefficiently utilize an already limited set of resources. Stakeholders, for valid reasons, will not recognize this as BA providing value.

The elite BA teams recognized during their evolution the need for a coherent BA strategy. Various approaches have been used to develop their strategy plans and all deliver benefits to BA stakeholders. Common BA strategy benefits include:

• A common and shared vision that reduces stakeholder conflict. By showing a clear and approved direction for the business architecture, the BA strategic plan helps avoid ad hoc and conflicting metrics that often result from varying stakeholder opinions.
• A performance framework that demonstrates how BA provides value to stakeholders. The definition and constant measurement of progress through key performance indicators (KPIs) is a linchpin to the strategic plan and its dynamic evolution.
• A prioritization framework to evaluate and schedule transformation projects. An important part of strategic planning is making rational choices on which initiatives should proceed, the resources allocated to them, and the delivery time frame.

Forrester’s business architecture playbook provides the ways to address the capability, resources, competencies, processes, and technology issues that stand between you and an effective BA practice. In particular, the BA strategic planning report defines a step-by-step approach to define a BA strategic plan that: 1) focuses on specific stakeholder needs; 2) defines the BA services to meet these needs; 3) develops the capabilities that enable the delivery of these services; and 4) builds a road map to execute the BA strategy.

I encourage you to read Forrester’s BA playbook and tell us what you think. In our initial release, we’ve described core elements which we’ll be revising and expanding on — for example, over the next few months we’ll be publishing on optimization of BA and how this changes the roles, capabilities, and skills of a firm’s BA practice.

SOURCE: Forrester

Business Architecture Performance Management: Does It Really Exist?

It is that dreaded time of year again where we have to report via the performance management system (PMS) on our individual performance and the value we bring to the organization. I say dreaded, because we all know that in reality the goals and objectives were set some time ago in the past, maybe a year ago, and a lot has happened since that time. The person you report to may have changed, you were redirected to other tasks, and so on. Everything seemed possible at the time of the objective setting, but now the reality hits that you were or may have been far too optimistic about your own capability. The self-assessment is difficult as you are not sure whether your manager has the same view as you. You believe you met the objective, but does their expectation meet your actual delivery? If a good performance relates to more money, the pressure and stress builds.

So whilst I was preparing for my Orlando Business Architecture Forum presentation I started to think about how business architecture teams measure and manage their performance. One of my next reports for Forrester’s business architecture playbook addresses BA performance. It was also a hot topic for the EA Council members in Orlando. I had a number of 1-on-1’s with clients who particularly asked about BA metrics and performance — in particular, “What do other business architecture teams do?”

I started listing the questions that, when answered by clients, would lead to a very valuable report for all BA leaders:

Do you measure your BA’s performance? Clients often advise me that they have fairly mature BA practices. However, very few can articulate how they measure their performance, and often comment that the business asks them to demonstrate how BA adds value. So, it would be useful to understand whether BA leaders measure their team’s performance and why they do or don’t.

Who sets the BA team goals and objectives? Now in individual performance management systems it is common for the individual and manager to discuss, define, and agree on the goals and objectives for the year or performance period. It is also common for these goals and objectives to be SMART based. More advanced organizations will have team goals, and therefore the discussion will align the individual goals and objectives to the team’s goals and objectives. So, BA leaders, who sets your goals and objectives: you, your manager, both of you, or someone else?

How does the structure of your program affect performance objectives? In some organizations the BA team is a dedicated team of individuals. In others it is a virtual or extended team comprising a core BA team and subject matter experts. Does your BA performance system include all contributors or is it specific to the core BA team?

What is the focus of the BA goals and objectives? In today’s world it is often said that the customer is king, and therefore the focus of any business unit should be related to the customer. This could be in terms of customer experience, satisfaction, and so on. Initial discussions on BA suggest that BA teams focus inwardly on the development of the business architecture and thus its artifacts, rather than on the use of business architecture that is measured. This is analogous in my mind to past I&O teams measuring server uptime as the five 9’s. What is your focus and what metrics do you use?

How frequently do BA efforts get measured? Is the measurement of BA efforts a single event, for example annually, or does it occurs more frequently? Again, how often are BA efforts measured and why?

If you are currently measuring, or are in the process of defining, your BA PMS, please share your metrics, methods, experience, and thoughts by commenting on this blog post.

SOURCE: Forrester

Building a Business Architecture

Building a data lake architecture can drag unprepared users under

Edo Interactive ran into a big problem several years ago: There weren't enough hours in the day for its data warehouse system to process all of the credit and debit transaction data the company uses to recommend personalized promotional offers to retailers and restaurants.

"We were taking 27 hours to process our daily build, when it worked," said Tim Garnto, Edo's senior vice president of infrastructure and information systems. So in 2013, Edo replaced the existing system, based on aPostgreSQL relational database, with a Hadoop cluster that has become a data lake architecture for the organization.

Garnto's team pulls data on more than 50 million U.S. retail transactions a day into the 20-node cluster, which runs on Cloudera's Hadoop distribution and is fed using data integration tools from Pentaho. The data, collected from banks and credit card companies, is processed and then run through predictive models designed to pinpoint individual cardholders for coupons. The coupons are promoted in weekly emails sent by Edo's business partners and automatically applied when purchases are made.

The daily data build is down to about four hours, and Garnto said Edo's data analysts can do their work "in minutes or hours," depending on the complexity of the models they're running. "Before," he added, "they were just kind of dead in the water."

Tim Garnto, Edo Interactive

But it hasn't been all sunshine and easy sailing on the data lake, according to Garnto -- a sentiment echoed by other IT managers who have led implementations of large Hadoop systems. Initially, only one IT staffer at Edo had experience with Hadoop and the MapReduce programming framework. The company, which has joint headquarters in Chicago and Nashville, Tenn., invested in training for other workers to build up Hadoop skills internally, but then it had to wean them off of writing data queries in the more familiar relational way. "We spent a lot of time updating that process," Garnto said.

Creating a two-step routine for making the incoming raw data consistent and generating standardized analytics data sets also took time to figure out. And the cluster, which currently holds a total of 45 billion records amounting to 255 terabytes (TB) of data, has become so central to Edo's business operations that Garnto needs to tread carefully in managing it and adding new Hadoop ecosystem technologies; otherwise, an adjustment made for one part of the company could affect how the system works for others. "Of all the challenges we've faced, that's going to be the most interesting," he said, adding that there may be a need for a steering committee to help oversee the development roadmap for the cluster.

Data lake enables instant analysis

Webtrends Inc., which collects and processes activity data from websites, mobile phones and the Internet of Things, is another data lake user. The Portland, Ore. company deployed a Hortonworks-based Hadoop cluster with a soft launch in July 2014 and went fully live with it at the start of 2015 -- initially to support a product called Explore that lets corporate marketers do ad hoc analysis of customer data. Peter Crossley, director of product architecture at Webtrends, said about 500 TB of data is being added each quarter to the 60-node cluster, which is up to 1.28 petabytes in total now.

Peter Crossley, Webtrends

Over time, Webtrends plans to use the Hadoop platform as a replacement for a homegrown system that stores data in flat files on network-attached storage devices. Using the Apache Kafka message queuing technology and automated processing scripts, Internet clickstream data can be streamed into the cluster and prepared for analysis in just 20 to 40 milliseconds, Crossley said. As a result, the reporting and analytics process can start "almost instantaneously" -- much faster than with the older system. The Hadoop cluster also supports more advanced analytics, and hardware costs are 25% to 50% lower on it.

Crossley said, though, that adopting the data lake concept required an internal "mind-set change" on managing and using the information that Webtrends collects for its clients. Before, the company primarily built general-purpose reports from the broad array of data it warehoused. But, he said, a data lake "is less about a single source of truth [in and of itself], and more that this is a single source of truth you can build multiple data sets on top of," for different analytics uses.

Webtrends also had to think hard about its data lake architecture and data governance processes to keep the Hadoop cluster from becoming "a data marsh," as Crossley put it. The raw data going into the system is loosely structured, but he added there are "very strict" rules on what it should look like. In addition, his team has partitioned the cluster into three separate tiers: one for raw data, a second for augmented daily data sets and another for third-party information that gets pulled in. Each tier has its own data classifications and governance policies, based on the particulars of the different data sets.

Don't lose control of your data

Suren Nathan, CTO at Razorsight Corp. in Reston, Va., also pointed to the need to be "very disciplined and organized" in setting up and managing aHadoop data lake. If not, Nathan said, the system can quickly turn into an out-of-control dumping ground -- "like a SharePoint portal with all these documents that nobody knows how to find."

Razorsight, which offers a set of cloud-based analytics services for telecommunications companies, began using a cluster that runs the Hadoop distribution from MapR Technologies in the second quarter of 2014. Sets of customer, operations and network data from clients are pulled into the system via a homegrown ingestion tool and run through the Spark processing engine to prepare them for analysis by Razorsight's data scientists; the cluster has five production nodes and a 120-TB storage capacity.

Suren Nathan, Razorsight

Like Webtrends, Razorsight has split its data lake into three partitions. In Razorsight's case, one data lake holds data that's less than six months old; another contains older but still active data and the third is an archive for information that's no longer used but needs to be retained. At the moment, there's a little over 20 TB of data in the two active zones, according to Nathan. To help make the system work smoothly, he added, Razorsight brought in new workers with experience in data governance and development of distributed systems, while also retraining existing IT staffers on using Hadoop, Spark and related technologies.

It's also moving to the new platform in stages. At about $2,000 per TB, the Hadoop cluster costs one-tenth as much as the IBM Netezza data warehouse system the company had in place previously. But Nathan said Razorsight first set up the cluster solely for data storage, then moved the processing and preparation stage there as well. Analytical modeling anddata visualization are still done on the old system, partly because of ties between the Netezza hardware and IBM's SPSS analytics software. The modeling will stay put for now, but Nathan expects to move the visualization layer and Razorsight's repository of analytical results into the data lake architecture by the end of this year.

SOURCE: Techtarget