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2016 The Adaptive Enterprise Ebook
2016 The Adaptive Enterprise Ebook
2016 The Adaptive Enterprise Ebook
Table of Contents
Introduction...........................................................................................................................4
How does a changing world affect your enterprise?.................................................6
What can you learn from startups?..............................................................................10
The Adaptive Enterprise...................................................................................................12
Key capabilities of the adaptive enterprise.................................................................16
Simplify.................................................................................................................................18
Innovate................................................................................................................................22
Collaborate...........................................................................................................................26
Accelerate.............................................................................................................................30
Decide...................................................................................................................................34
Control...................................................................................................................................38
Digitize your change capability......................................................................................42
Conclusions..........................................................................................................................46
About the authors..............................................................................................................47
About BiZZdesign...............................................................................................................48
BiZZdesign Enterprise Studio.........................................................................................49
Introduction
Organizations have always had to adapt to a changing world, but the current
turbulent environment is more demanding than ever before. The Digital
Enterprise requires continuous innovation, which means that organizations
are in a constant state of flux. At the same time, they need to stay in control.
They have to deal with regulatory pressure, financial constraints, and the risk of
disturbing their going concern while implementing major change.
Few companies have a systematic and reliable way of translating their business
strategy into action across all relevant parts of the organization. However, some
organizations have proven to be successful in aligning small step improvements
with large strategic change. How do they do this, and what can you learn from
them?
In this booklet, we explain our vision on these challenges of change and control
in complex enterprises, discuss what is needed to tackle these challenges, and
show how smart software can help.
Many of these are new developments, that are now showing an exponential
growth curve.
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50
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40
35
30
25
20
15
10
5
1960 1965
1970
1975
1980
1985 1990
1995
2000
2005 2010
3 Lack of organizational
commitment
10
Alibaba,
the most
valuable retailer, has
no inventory
Uber,
the worlds largest
taxi company,
has no fleet
Airbnb,
the worlds largest
accomodation
provider, has
no real estate
Facebook
the most popular
media owner, creates
no content
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12
13
14
sc
ha
ng
e
Change
ou
u
tin
on
The need for big change is often a sign that you have waited too long.
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16
Innovate
Control
Simplify
Collaborate
Accelerate
Decide
17
Simplify
Many organizations have become highly complex. They are large and carry
with them all kinds of legacy, in their products, applications, processes, rules,
culture, and behavior. This complexity leads to uncertainty about how the
organization really works, its strategic direction, and the impact of change.
Uncertainty poses risks, so many organizations would rather avoid it. But one
thing is for sure, not adapting to change eventually brings even more risk. How
can you deal with complexity and bring back a basis of certainty for successful
change?
A powerful means for tackling complexity is the use of models. Models are
more than pretty pictures; they provide precise, well-defined and unambiguous
information. Models can be checked, visualized, analyzed, managed, integrated,
transformed, interpreted, and sometimes even executed. Organizations use all
kinds of models in different business and technology areas, such as strategy
maps, process diagrams, architecture views, product breakdown structures and
organizational charts. Models support fact-based decision-making and help
you to analyze the impact of changes before you apply them.
18
Simplicity survives
the longest
19
To profit optimally from the use of models, you should link them together. If
something changes in one domain of the enterprise (e.g. a strategic shift), you
need to know what impact this might have on other domains (e.g. product
portfolio or process flows).
Models enable you to analyze all relationships between your products,
processes, people and systems, and help you to fight complexity. How are the
different parts connected? Who is responsible for what? What are the essential
business processes and IT systems, and what is redundant? Does the market
really demand all these products? Is all the red tape necessary?
Reducing and avoiding complexity is also about culture. In many organizations,
people derive status from the complexity they control (She is the only one
who understands this). In the adaptive enterprise you need to embrace
simple and adaptable designs and solutions.
To deal with complexity, you need to separate parts of your enterprise into
cohesive, self-sufficient business capabilities that own their processes and
systems, and have authority to change these if necessary. This provides a basis
for Capability-Based Planning as a strategic approach to change.
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Business management
Strategic
management
Performance
management
Product management
Marketing
Product definition
Market development
Distribution channel
management
Customer service
Customer relation
management
Product engineering
Campaign
management
Sales execution
Service channel
management
Customer data
management
Asset management
Customer care
Money management
Claim management
Investment strategy
management
Investment
performance
management
Banking
management
Accounts
management
Contract lifecycle
management
Claim settlement
Investment portfolio
management
Asset inventory
maintenance
Cash flow
management
Money market
management
Contract
administration
Claim administration
Digital customer
management
Digital channel
management
Data-driven insurance
Data acquisition
Data analysis
Business support
Organizational
development
HR Management
Process
management
Office management
Facility management
IT management
Capability map of an insurance company, highlighting new strategic capabilities (green) and underperforming ones (pink).
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Innovate
To stay ahead in todays volatile business environment and outperform your
competitors, you have to innovate constantly. New technologies, especially in
the digital world, offer a continuous stream of opportunities, so you have to be
ready to understand their potential and reap their benefits.
To foster growth and innovation, you need optimal capital allocation. Budgets
are scarce, so where do you invest? Larger and more traditional organizations
in particular struggle with this. They have a legacy landscape that requires
constant attention. But spending all your budget on keeping the lights on will
squeeze out any innovation.
You should create a sound balance between different categories of change, and
know what their impact is on your strategic goals. Sustaining your businessas-usual, improving your current capabilities, or developing entirely new ones
all require specific criteria for investing in change.
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There are several techniques available that help you to find opportunities for
innovation, identify the requisite changes and execute your strategy. These
techniques should cover both your organization and the ecosystem in which
it operates.
The Business Model Canvas is a useful technique for developing new and
innovative business models. What is your value proposition for different
customer segments, who are your key partners, what are the revenue streams
and which key activities and resources do you need?
Methods such as Capability-Based Planning help you define how such business
models should be implemented. What does your organization need to be able
to do this? Linking these capabilities to your enterprise architecture shows you
what the potential benefits of innovations are and what the implementation
effort is. Portfolio Management, in turn, helps you with the metrics and
dashboards to compare and decide on the requisite investments.
Together, these disciplines provide a clear line-of-sight across the enterprise.
By working in concert, they ensure rapid implementation of those innovations
that provide real business value.
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Key activities
Value propositions
Customer relationships
Attracting and
registering new
customers
Updating and
maintaining existing
customers
Banks
Closing accounts of
customers that leave
Automobile
repair shops
Handling claims
Automobile
insurance for
individuals
Expertise in claim
assessment
Stabke
financial
capital
Constant
customer
contributions
Advertising
outlets
Excellent
reputation
Good
organizational
values and
culture
Households
Speed in claim
handling
Automobile
insurance for
businesses
Singleemployee
businesses
Expertise in
damage assessment
Key resources
Car rental
companies
Customer segments
Personal assistance in
policy customization
Channels
Loyal
customer
base
Skilled and
knowledgeable
staff
Front office
TV
Web
Radio
Telephone
Office
equipment
E-mail
Postal mail
Cost structure
Businesses
under 50
employees
Businesses
under 500
employees
Newspapers
Billboards
Internet
Revenue streams
Salaries
Utilities
cost
Rent
Devices +
office
supplies
Car pool
Marketing
Other
Claims
Partner
fees
Households
contributions
Single-employee
businesses
contributions
Businesses under
50 employees
contributions
Businesses under
500 employees
contributions
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Collaborate
Successful change is all about people. Organizations are social entities, where
motivated, knowledgeable, well-trained and creative employees make the
difference. However, in many organizations the real power of this workforce is poorly
utilized. Poor communication, no clear vision, wrong decisions, bad collaboration
and failed projects cause energy to leak away.
The complexity of todays enterprises requires the input of many disciplines in
designing and deciding on the future of the organization. For successful change
you need the involvement and talent of all people. Management gives direction;
architects, business analysts, process designers, marketers and software developers
support the process of change; and the people in the primary operations, with
profound knowledge of the process, are often the most important, making change
actually happen!
In the complex structures of todays enterprises, optimal collaboration is not easy.
People should leave their silos behind and broaden their scope. Avoiding local
optimization requires one collective goal for all, a North star, to align activities.
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Collaborate on your
shared goals
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Awareness
Research
1 weeks
3 weeks
Choice Reduction
1 weeks
Your prospects are
deciding what the best
options are.
Purchase
1 days
Your prospects turn into
customers
Employer Site
Social Media
Experiences
Satisfaction
Importance
Effort
Feeling
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Accelerate
Change will never be as slow again as it is today. The ever increasing speed of
change has an enormous impact on your organization. The only way to deal
with this is to embrace change as a way of life.
This means you need to change the way you change. The adaptive enterprise
uses a short-cyclic change approach. When speed is key, you experiment
to learn quickly what works, try it out in practice, roll it out, or, if necessary,
abandon it. To innovate, a fail fast mentality is essential. But in areas with
high regulatory pressure or business-critical financial risks, you need to adapt
your change processes to the circumstances. Balancing speed and control is
essential in effective change.
If you succeed in this, you can use your agility to outsmart and outpace your
competitors. This is the hallmark of the adaptive enterprise. If you dont
improve your change capability, you will be left behind by your competitors,
customers will desert you, and your organization will be relegated to the past.
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Speed up change
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Disruptive
trend ideation
Rationalize
business
outcomes
Evaluate
opportunities
and risks
Create business
transformation
road maps
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Decide
In a complex and turbulent environment, the adaptive enterprise requires
constant, fast decision-making. This includes large, strategic decisions (e.g. on
the development of new products), but also many day-to-day decisions made
at all levels in the organization (e.g. to shift capacity to a different part of a
production process to optimize resource utilization).
Who can make which decisions depends on your control framework. More
freedom might imply a higher risk, since people could make a wrong decision.
However, more control will limit your agility, since decision loops going up the
organizational hierarchy will take more time.
An interesting observation is that management in many organizations feel
uncertain and insecure about current challenging developments. A logical
reflex is to gain control. However, more control will eventually frustrate change.
These organizations might find themselves in a vicious circle.
In the adaptive enterprise decisions are made at the right time, in the right
place, with the right information, by the right people.
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Spector360
CoolSoftware
68222.00
DynamicPolicy
WarwickICSystems
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Spector360
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PROSIM2
64999.00
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3.38 (low)
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3.44 (low)
MS Project
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Docman
3.63 (low)
GasPal
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Beaufort
3.63 (low)
GIS
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MindMapper
DINO-lic
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Crystal Ball
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60763.00
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3.69 (low)
3.81 (low)
3.88 (low)
0.00
2.00
4.00
6.00
8.00
10.00
Technical value
Cost overview
Legend
Application costs
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Eliminate
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TIME analysis
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Business value
Risk overview
100
Risk
80
100
100
75
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37
Control
Whether you are in banking, insurance, government, retail, pharmaceutical, or
another industry, regulatory compliance is an increasingly important factor to
consider with regards to change. Many companies in finance spend the majority
of their change budget on compliance-related issues. Moreover, cyber-risks
pose an increasing threat to your business. Add to that the enormous number
of external dependencies of a modern enterprise.
Speed of change is important, but you also have to stay in control, ensure
compliance, and manage the risks involved with change. The only way to do
this is to ensure transparency. Regulatory authorities demand to know your
contingency plans; risk analyses require a cross-cutting view of your entire
enterprise; and the impact of change needs to be known and managed.
This need for control should not stifle innovation. Not changing is not an
option. Rather, you should provide clear guidelines and boundaries, so that
autonomous groups within their local scope may make their own decisions
and execute change within these limits. And since change may and will happen
concurrently in many places, you need to ensure enterprise-wide coordination
between these local developments.
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39
The basis for control is insight. Having a coherent overview of your enterprise is
a great help. Ensuring compliance becomes that much easier when you know
where you have to look.
Again, models are of great value, and help you to provide insight, support
enterprise-wide risk analyses, and ensure and prove that your organization
operates within the applicable regulatory frameworks. Models can offer
an integral vision on the protection of your valuable business, information,
application and technology assets.
Traditional IT security and risk management approaches are no longer
sufficient. Complex risk scenarios need to be linked to strategy, the business
model, enterprise architecture, business processes and applications. This
requires a sound approach for Enterprise Risk & Security Management.
Model-based analysis of threats and vulnerabilities enables you to identify
and assess risks, see how these spread across your organization and its IT, and
shows where you should put controls in place to mitigate these risks. This
supports strategic risk management and Security By Design.
40
Insecure
transmission
channel
Weak encryption
of customer data
Legend
Weak
authentication
vulnerability level
2. low
Authorized
employee
Vuln
3. medium
5. very high
Vuln
Vuln
Data entry
application
Asset
Customer data
Asset
Encrypted
data
records
Customer data
transmission
very high
very high
very high
high
medium
2
3
threat capability
very high
very high
high
medium
low
very2high
high
medium
low
very low
high
medium
low
very low
very low
low
very low
very low
very low
1
3
medium
1
0
0
control strength
Risk analysis, showing vulnerabilities in the IT landscape, and a heatmap of threats vs. controls.
41
42
43
44
Capabilities Required
Capability Risk
Implementation Risk
InfoSec Risk
Scenario A - In-house
very high
very high
medium
high
high
very high
Scenario A - In-house
200000
400000
600000
800000
1000000
Cost
SCN03 Impact Comparison
Applications
Legend
Scenario A - In-house
Scenario B - External Partner
Process
Capabilities
People
Information
Description
45
Conclusion
As we have argued in this book, in todays turbulent business environment
enterprises need to become much more adaptive. Change is the new normal
and only the organizations that embrace it as a way of life will survive.
Traditional, hierarchical change processes cannot keep up with the pace
required. This new approach to change means bringing together people from
many different disciplines and departments, and delegating decision-making
to the appropriate levels of the organization. These people need to have the
right information to make the right decisions.
A model-based approach, facilitated by a collaborative business design
platform, can play an important role. In a world where many different questions
need to be answered at speed, and where all answers are connected, software
has the power to provide instant insight in the truth. It allows you to assess
opportunities and effects before you implement a change, reducing risk and
ensuring control. Implementing such a new approach to change is in itself a
major change, but BiZZdesign is here to help you.
Think big, act small, start now!
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About BiZZdesign
BiZZdesign is a software company that provides an advanced platform for
planning, tracking and executing business change. We are a global organization
with 1000+ customers on six continents, and our own staff in many countries.
We partner with leading consultancies, distributors and resellers to provide our
customers with the best support possible. Our dedication to fulfilling customer
needs is reflected both in our rapid growth and in our long-standing customer
relationships.
Founded in 2000 as a spin-off from an applied R&D institute, we have strong
roots in research and innovation. Our products are based on our expertise on
business design and change. Our field force of consultants provides us with the
latest information on customer needs and market trends. Analysts recognize
us as a market leader with class-leading products.
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Notes
51
Notes
52