From Canvas to Blueprint: Aligning Business Models … well does the business model support the...
Transcript of From Canvas to Blueprint: Aligning Business Models … well does the business model support the...
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From Canvas to Blueprint: Aligning Business Models with Business Architecture Steve DuPont, Associate Technical Fellow Enterprise Architecture March 19, 2013
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Global Boeing
Customers and customer support in 150 countries
Total revenue in 2012: $81.7 billion
70 percent of commercial airplane revenue historically from customers outside the United States
Manufacturing, service, and technology partnerships with companies around the world
Contracts with 26,500 suppliers and partners globally
Research, design, and technology-development centers and programs in multiple countries
More than 170,000 Boeing employees in 70 countries
More than 170,000 Boeing employees in 50 states and 70 countries
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Agenda
Business Model Overview
Business Model/Business Architecture Alignment
Recommendations
Future Considerations
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What is a Business Model?
“A business model describes the rationale of how an organization creates, delivers, and captures value.” Osterwalder and Pigneur, 2010.
Value Proposition
Customer Interface
Infrastructure Management
Financial Aspects
*Based on Alexander Osterwalder’s Four Pillars, 2004. Boeing, EO&T IT EA | 3
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Why All the Attention on Business Models?
Focus on business model innovation
Accelerating change drivers such as cloud, mobile, social, green
The need to describe business complexities
The need to decrease time to market
Shrinking business model life cycles
Maturing business model frameworks
Accessible methods and tools
Source: Alexander Osterwalder and Yves Pigneur, “Business Model Generation,” 2012. Boeing, EO&T IT EA | 4
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Business Model Frameworks
A business model framework is a conceptual structure for organizing the elements, relationships, representations, and classifications of one or more business models
Recent frameworks include
Business Model Canvas, Alexander Osterwalder et al., 2010
Business Model Cube, Peter Lindgren and the EU NEFFICS project, 2012
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State of the Practice
“Many managers do not really know what a business model is, let alone have an explicit model of their own business.”
“…in spite of the intensive research carried out in this field in the past 15 years, the concept still remains very fuzzy in its definition, purpose and operationalization.” Yariv Taran, “Rethinking It All: Overcoming Obstacles to Business Model Innovation,” Center for Industrial Production, Aalborg University, 2011.
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Business Model Canvas
Key Partners
Key Activities
Customer Segments
Key Resources
Channels
Cost Structure Revenue Streams
Customer Relationships
Value Proposition
Source: Alexander Osterwalder and Yves Pigneur, “Business Model Generation,” 2012. Boeing, EO&T IT EA | 7
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Sample Canvas Formats
Free form “dynamic” “creative”
Structured “stable”
“analyzable”
Style:
http://www.businessmodelgeneration.com http://www.businessmodelgeneration.com
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Business Model - What Kind and How Many?
Business Model Type
Business Model Type
Business Model
Business Model
Proposal 1
Proposal 2 Business Model
Abstract
Concrete
Scenario Operating
*Based on: Alexander Osterwalder, “The Business Model Ontology, A Proposition in a Design Science Approach,” 2004.
Deployed
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Business Model as Unifying Concept
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Business models are a unifying concept for Business Innovation, Strategy, and Architecture
Business Innovation
“What’s possible?”
Business Strategy
“What will we do?”
Business Architecture
“What’s the blueprint?”
Business Model
“What does it look like?”
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Business Models and Strategy
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Business Model Kaplan and Norton, “Strategy Maps,” HBR, 2004
Business model canvases and strategy maps address the same level of the Strategy Continuum with similar perspectives
Strategy Map
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Business Models and Business Architecture
Business model Used to drive growth
Articulates key elements of strategy
Incorporated into business plans
Business architecture Used to “align strategic objectives and tactical demands”*
Enables interpretation of business models into concrete business concepts that can be targeted for improvement**
*Source: OMG Business Architecture Special Interest Group, http://bawg.omg.org, and Business Architecture Institute, www.businessarchitectureinstitute.org.
** Source: TSG, Inc.
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Business Architecture
Business Model
Capabilities
Value Streams
Organization
Information
Motivation
Customers
Measures
Products & Services
Business Rules
Partners, Competitors
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Business Model/Business Architecture Alignment
Alignment brings BM/BA frameworks and practice closer together
Key aspects Framework alignment
– Methods
– Artifacts
– Meta-model
Concept mapping
– How do business model concepts influence business architecture concepts?
– How do these concept mappings affect business model analysis and BM/BA translation?
– Mapping guidelines can be useful
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Business Architecture
Business Model
Capabilities
Value Streams
Organization
Information
Motivation
Customers
Measures
Products & Services
Business Rules
Partners, Competitors
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Benefits of BM/BA Alignment
Earlier and faster analysis of proposed business models Improved accuracy and completeness of business models Better understanding of key drivers for business transformation More responsive business architecture practices Better solution reuse for incremental innovation
Business Architecture
Business Model
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Capabilities
Value Streams
Organization
Information
Motivation
Customers
Measures
Products & Services
Business Rules
Partners, Competitors
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Framework Alignment Approach
Define goals and objectives for alignment
Align BM/BA framework concepts
Establish BM/BA frameworks
Tailor and/or extend frameworks for alignment Align business model design process with BA development method
Map business model building blocks and elements to business architecture meta-model
Prove out
Improve
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Aligning Development Methods
Initiating
Business Model Design Process (Osterwalder)*
Business Architecture Development Method (Generic)
* http://www.businessmodelgeneration.com.
Vision Business
Architecture Design
Implementation Planning Deployment Change
Management
Understand, Design Mobilize Implement Manage
Target Business Architecture Target Business Model
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Aligning Concepts
*Source: Business Architecture Guild, “A Guide to the Business Architecture Body of Knowledge (BIZBOK™).”
Business Model Concept
Aligns and Maps to…
Business Architecture Concept
Value Proposition Aligns with… Maps to…
• Strategy, Value Item, Product/Service • Initiative*
Customer Segment Aligns with… Maps to…
• Strategy, Customer, Stakeholder • Objective*, Capability*
Channel Aligns with… Maps to…
• Strategy, Partner, Resource • Value Stream*
Customer Relationship Aligns with… Maps to…
• Strategy, Customer • Value Stream*, Capability*
Key Activity Aligns with… Maps to…
• Strategy, Value Stream • Capability*
Key Resource Aligns with… Maps to…
• Strategy, Organization, Resource • Business Unit*, Capability*
Key Partner Aligns with… Maps to…
• Strategy, Partner/Stakeholder • Objective
Revenue Stream Aligns with… Maps to…
• Strategy • Value Stream, Capability
Cost Structure Aligns with… Maps to…
• Strategy • Capability*, Business Unit*
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Architecture-Supported Business Model Analysis
How well does the business model support the strategy?
Does it fit within the intended environments?
Does it integrate as intended with other business models?
Is the integration consistent with the company’s operating model?
What key infrastructure elements are affected (e.g., capabilities, value streams, information, resources)?
What are the risks (e.g., tax, legal)?
How well does the organization align with the business model?
http://www.businessmodelgeneration.com.
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Recommendations
Work toward a common definition of business models and architecture
Tailor business model formats to use
Infuse as much structure as possible into business models (judgment required)
Create reusable business model building blocks
Introduce business architecture concepts early (e.g., capabilities)
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Future Considerations
Comprehensive, open business model frameworks
Modeling languages and BM/BA interoperability
Simulation
Increased tool support
Business architecture subsuming business models?
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