1.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 1
BUSINESS BY DESIGN
FINAL 1.0.0 NOVEMBER 2015
Craig Martin
Chief Architect, Enterprise Architects & FHO

2.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 2
Utility
(Foundation)
Innovate
Build
Advantages
Assemble
Prolong
Advantages
Mix
Reduce
Disadvantages
WHAT'S BUSINESS ABOUT?
D I F F E R E N T I AT I O N
DIFFERENTIATION

3.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 3
WHAT'S BUSINESS ABOUT?
S O L V I N G P R O B L E M S
‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone
Unknowable:
The relationship between cause
and effect is impossible to determine
as they constantly shift. In chaos, it is
necessary to act first and then sense
through the result of action how to
further respond. Understanding the
problem comes later. This is the
domain of rapid response.
Example: Natural disasters
Unknown Problems:
The problem is in constant flux as a
change to the situation causes ripple
effects and unpredictability
in other aspects. Information is often
incomplete. Rather than implementing
a solution, devising a concept, testing,
iterating and then responding is
needed. Problems often become
complex when human behavior is a
significant factor. This is the domain of
emergence.
Example: Schooling experiences,
organizational change management,
traffic management
Known unknowns:
A complicated problem can have multiple right
solutions. Complicated problems are
understood, analyzed and then responded to.
It often requires expertise to solve and is
largely process driven. Solving a complicated
problem often requires the right expertise
along with the right tools. In this realm you
may know you have a problem but may not be
able to solve it alone. This is the domain of
expertise.
Example: Fixing a car, constructing an airplane.
Known knowns
A simple problem is one of cause and effect.
The solution is rarely disputed. The problem
can be categorized, understood and a
response devised based on the information.
This is the domain of best practice.
Example: 1+1 = 2, solving a jigsaw puzzle.
The Knowledge /
Innovation funnel

4.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 4
WHAT'S BUSINESS ABOUT?
F I N D I N G T H E R I G H T H E U R I S T I C
The Challenge is reducing the time it takes to move from the unresolved business challenges space to the repeatable
formulas space.
Unresolved Business
Challenges
Rules of thumb
Robust, repeatable
and replicable
formulas & processes
Ultimately all innovative
algorithms will become utility.
* From Roger Martin (2009) The Design of Business
MYSTERY
HEURISTIC
ALGORITHM
T h e K n o w l e d g e F u n n e l
This is the lean startup space
This is the exploitation and
industrialization space

5.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 5
WHAT'S BUSINESS ABOUT?
M O V I N G F R O M E X P L O R AT I O N T O E X P L O I TAT I O N
The challenge is identifying the right skills in the organisation that are able to traverse the domains of innovative
intuitive thinking, and reliable analytical thinking.
Unresolved
Business
Challenges
Robust, Repeatable
And Replicable
Processes
NPV
EVA
Operation
Management
Quality
Management
Corporate
Governance
Enterprise
Patterns
Portfolio
Analysis
IT Governance
Value
Engineering
PRINCE2
Six Sigma
& Loan
Business
Intelligence
Strategic
Traceability
Financial
Modelling
Innovation
Management
Business
Analysis
Data
visualisation
Talent
Management
System
Thinking
Mission
Business Model
Design
Stakeholder
Value
TOGAF
Cost
Engineering
Solution
Architecture
Knowledge
Ecosystem
Six Thinking
Hats
Collective
Intelligence
Gamification
Crowdsourcing
Change
Management
Perception
Management
Wicked
Problems
Environmental
Scanning
Brand
Management
Integrative
ThinkingGoals
Capability
Five Forces
Root Cause
Analysis
Product
Management
HEURISTICS
RULES OF
THUMB
ANALYTICAL
THINKING
INTUITIVE
THINKING
* From Roger Martin (2009) The Design of Business
GOAL: Exploitation;
Reliability
Produce consistent,
predictable outcomes
GOAL:
Exploration; Validity
Produce outcomes that meet
an objective
A reliable system will
produce the same test
results every time
W H O I S B E S T Q U A L I F I E D T O
O P E R A T E H E R E ?
A valid system will produce a
result that is shown, through
the passage of time, to be
correct
Design
Thinking
Business
Architecture
Thinking

6.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 6
THE KNOWLEDGE
FUNNEL
Non-core but complex -
Outsource
Innovation, chaos &
unresolved mysteries
HIGH
HIGH
LOW
LOW
Must be done but adds little value to
product or services
Very important to success, high value added
to products and services
STRATEGIC IMPORTANCE & VALUE
COMPLEXITYANDDYNAMICS
Complex negotiation,
design, or decision process
Many business rules;
expertise involved
Some business rules
Procedure or simple
algorithm
Non -Core
Capabilities
Core Differentiating
Capabilities
Everyday, highly
repeatable and
automated
Make repeatable and
reliable to gain efficiency
Core Competitive
Capabilities
WHAT'S BUSINESS ABOUT?
S P E E D T H R O U G H T H E F U N N E L
Source: Adapted from “Business Process
Change” by Paul Harmon
GOAL: Reliably produce
consistent, predictable
outcomes
GOAL: Validity- Produce
outcomes
that meet desired
objectives
People Dominance
Process Dominance
Technology Dominance

7.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 7
DEMOCRATISATION OF KNOWLEDGE
T H E C O M M O D I T Y S PA C E I S G R O W I N G , M A K I N G T H E D I F F E R E N T I AT I O N
S PA C E M O R E C O M P E T I T I V E
Non-core but complex -
Outsource
Innovation, chaos &
unresolved mysteries
HIGH
HIGH
LOW
LOW
Must be done but adds little value
to product or services
Very important to success, high value added
to products and services
STRATEGIC IMPORTANCE & VALUE
COMPLEXITYANDDYNAMICS
Complex negotiation,
design, or decision
process
Many business rules;
expertise involved
Some business rules
Procedure or simple
algorithm
Non -Core
Competencies
Core Differentiating
Competencies
Everyday, highly repeatable
and automated
Make repeatable and
reliable to gain efficiency
Core Competitive
Competencies
Non-core but complex - Outsource
Innovation, chaos &
unresolved mysteries
HIGH
HIGH
LOW
LOW
Must be done but adds little value
to product or services
Very important to success, high value added
to products and services
STRATEGIC IMPORTANCE & VALUE
COMPLEXITYANDDYNAMICS
Complex negotiation,
design, or decision
process
Many business rules;
expertise involved
Some business rules
Procedure or simple
algorithm
Non -Core Competencies
Core Differentiating
Competencies
Everyday, highly repeatable and
automated
Make repeatable and
reliable to gain
efficiency
Core Competitive
Competencies
OPPORTUNITY
OR THREAT?

8.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 8
OUR ROUTE TO SOLVING PROBLEMS
ABSTRACT
CONCRETE
Insight:
“I want a beautiful
environment”
Opportunity:
Paint the wall,
Move, Buy new
furniture, Hand a
picture
Problem
Statement:
“I need a hole”
Solution Statement:
“I need a drill”
PROBLEM SOLUTION

9.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 9
THE EMERGENCE OF ENTERPRISE DESIGN
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Understanding
problem based on
drivers, pressures,
environment and
working out
motivation
Developing operating
models and solutions
DESIGN
THINKING
ARCHITECTURE
THINKING
ENTERPRISEDESIGN

10.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 10
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Developing operating
models and solutions
NAVIGATING THE QUADRANTS
A P P R O A C H E S TO C H A N G E
SOLUTION FOCUSSED
TRANSFORMATION
FOCUSSED
DISRUPTION
FOCUSSED
DELIVERY FOCUSSED
Understanding
problem based on
drivers, pressures,
environment and
working out
motivation

11.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 11
DESIGN MINDSET
U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S
R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R

12.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 12
ABSTRACT
CONCRETE
PROBLEM SOLUTION
NAVIGATING THE QUADRANTS
A P P R O A C H E S TO C H A N G E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R

13.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 13
… a discipline that uses designer’s sensibility and
methods to match people’s needs with what is
technologically feasible and what a viable
business strategy can convert into customer
value …Tim Brown, CEO, IDEO
DESIGN THINKING DEFINITION
› Quoted from ‘The Design of Business’, Roger Martin

14.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 14
TOOLS FOR BUSINESS DESIGN: A SELECTION
› DISCOVER
› Literature Review
› Time Machine
› Shadowing
› Touchstone Tours
› Service Safari
› A Day in the Life
› Diary Studies
› The Five Whys
› Journey Maps
DEFINE
Mapping Complex
Situations
Stakeholder Map
Customer Persona
Empathy Mapping
Mind Mapping
Scenarios
Affinity Mapping
How Might We
DEVELOP
Bodystorming
Collaborative
Ideation
Co-creation
Storyboards
Image Boards
Prototyping
Heuristic Evaluation
Critique Circle
DELIVER
Rapid Iterative
Testing
A/B Testing
Usability Testing
Ergonomic Analysis
Value Opportunity
Analysis
Feedback Review
The Key is process and emergence

15.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 15
THE PROCESS OF DESIGN
U N C E R T A I N T Y / P A T T E R S / I N S I G H T S C L A R I T Y / F O C U S
R E S E A R C H C O N C E P T D E S I G NP R O T O T Y P E
D I S C O V E R D E F I N E D E V E L O P D E L I V E R

16.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 16
THREE LENSES OF HUMAN CENTRED DESIGN
Start Here

17.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 17
FOUR ORDERS OF DESIGN
› Enterprise Design
› Business Design,
› Organisation Design
› Service Design,
› UX Design, Instructional
Design,
› Process Design
› Richard Buchanan, (1992) Wicked Problems in Design Thinking
› Product Design, Engineering,
Architecture
› Technology Design
› Information Design
› Graphic Design, Visual Design
• Information Design produces designs for communicating intended meaning through
symbols and information
• Technology Design produces designs for platforms and systems to deliver
information and services
• Service Design produces designs for what needs to be achieved in terms of person
centered outcomes and experiences
• Enterprise Design produces designs for orchestrating Service Designs and their
implementation via Technology and Information designs
Disruption normally occurs here

18.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 18
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Problem Definition
Influencers
Values
Value and Valuable
Value Proposition
Value System Engineering
Prototypes
Business Scenario
Business Model Canvas
Problem definition
Business Motivation
Model
Value Chain
Capabilities
Cross-Functional Capabilities
Capability Overlays
Roadmap & Planning
MOVING THROUGH THE QUADRANTS
D I S C O V E R D E F I N E D E V E L O P D E L I V E R

19.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 19
WHAT IS DISRUPTION?
› Innovation that creates a new
market
› Innovation that creates a new
value network
› Eventually disrupts an existing
market and value network
› Displaces an earlier offering or
technology
EXAMPLES OF DISRUPTIVE BUSINESS MODELS:
» Apple and their reduced switching costs and increased
barriers to entry
» Nespresso and their recurring revenues model
» Dell and their “earn before you spend” model
» Facebook and their “getting others to do the work”
model
» Xerox and the pay per use model
» Google and the micro-advertising model
» Amazon and their long tail model
» Jeep
» Railroads
» Printing press
» Gunpowder

20.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 20
WHEN DOES DISRUPTION OCCUR?
› First stage of disruption, an innovator
makes a product much more affordable
and simpler to use (for the user) than
what currently exists.
› The second stage of disruption is when
additional technological change is
added which makes it simpler and less
expensive to build and maintain the
products.
› The new change eventually displaces
the existing market and value network,
resulting in a radical improvement in
performance
Disruptive technologies take a while to change the market
Christensen, Clayton M. (2010-09-06).
Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns
PERFORMANCE
TIME
Market for old
technology
Market for new
technology
New replaces
old technology

21.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 21
BLUE OCEAN
 Create uncontested markets
 Make competition irrelevant
 Create & Capture new
demand
 Break value / cost
trade-off
 Align with differentiation
AND low cost
RED OCEAN
 Compete in existing
markets
 Beat the competition
 Explore existing demand
 Make the value/cost
trade-off
 Align with differentiation
OR low cost
Why does disruption occur?

22.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 22
DIGITAL DISRUPTION MAP
*Deloitte – Digital Disruption. Short fuse, big bang?

23.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 23
› Turned off to school
› Focused on passing the next test
› Not excited by the classroom
› No application to life after school
› Discouraged from following their own interests
› Knowledge = gradual accumulation of right
answers acquired through effort and obedience to
the instructor
› Role of the instructor is to TEACH them
› Right answers for everything exist
MOTIVATION? RELEVANCE?
AUTHENTICITY?
WHY IS DISRUPTION
REQUIRED IN
EDUCATION?
From an article by Roger Shank,
Engines for Education

24.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 24
› Prescribed Curriculum
› Whiteboards
› Desks in rows
› Books and worksheets
› Paper & pencil
› Focus on the front (teacher)
› Read, take notes
› Study as an individual
› Take tests to measure learning
TRADITIONAL CLASSROOM
WHY IS DISRUPTION
REQUIRED IN
EDUCATION?
From an article by Roger Shank,
Engines for Education

25.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 25
PHOTO IN NEWS

26.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 26
WHY IS DISRUPTION REQUIRED IN
EDUCATION?
› These companies bring inputs of
materials into one end of their
premises, transform them by adding
value, and deliver higher-value
products to their customers at the
other end.
› Most schools and universities
currently operate like a VAP business
(Value chain anyone?)
› Students are herded into a classroom
at the beginning of the school year,
value is added to them, and they’re
promoted to the next grade at year’s
end.
› It’s a form of mass production on an
assembly line
Traditional education’s present value network is largely a VAP business
1. PREPARE &
PRODUCE TEXTBOOKS
& OTHER
INSTRUCTIONAL
MATERIALS
6. TEACHER
TRAINING
5. TESTING AND
ASSESSMENT
2. ADOPTION
DECISIONS FOR
CONTENT AND
CURRICULA
3. DELIVER
CONTENT TO
STUDENTS
4. INDIVIDUAL
ASSISTANCE
*Øystein Fjeldstad and Charles Stabell
Value Added Processes (VAP) businesses model

27.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 27
DISRUPTION ALTERS ENTIRE VALUE NETWORKS
Example: Disruption will alter the entire value chain and place the student at the centre
Faculty &
Staff
CONTENT
CLASSES
SOCIAL
INTERACTION
LECTURERS
STUDENTS
FACILITATORS
Teach at SCHOOL and do Homework at HOME Teach at HOME and do Homework at SCHOOL
Many teachers, many schools

28.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 28
EDUCATION
DISRUPTION
SOLUTION SHOPS
› Employ experienced, intuitively
trained experts whose job is to
diagnose problems and
recommend solutions.
› Experts vs expertise
FACILITATED NETWORKS
› Customers exchange with each other.
› Participation in the network typically isn’t the primary profit engine
for participants.
› Rather, the network is a supporting infrastructure that helps the
buyers and sellers make money elsewhere.
› The company that makes money in a facilitated network is the one
that facilitates the network.
This has opened up the space for other
value networks in education

29.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 29
EDUCATION
DISRUPTION
› It is rare for a disruption to appear in just one part of a
value network without the rest of the system
changing, too.
› When a disruption arises, a new value network almost
always emerges to replace the existing one if the
disruption is to be successful.
› The reason the whole value network must be replaced
for a disruption to occur is that, in each stage, the
actors’ business models, economic incentives, and
rhythms of innovation and technological paradigms are
consistent and mutually reinforcing.
› Companies with disruptive economics simply are not
plug-compatible with the old value network.
› What this means is that the entire system for creating
education materials, making the decisions about which
materials to adopt, and delivering the content to
students must, and will, change.
› It is this second stage of disruption in public education
that will cause the world to “flip” and make student-
centric online technology a reality.

30.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 30
VALUE SYSTEM DESIGN
The Managing Risk
Value System
Insurance
Hospitals
Gyms
Funerals
Legal
Panel
BeatersTraffic
Management
Broadcasting &
Radio
Gaming
The Insurance
Value System
Insurance
Hospitals
Panel
Beaters
Medical

31.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 31
DISRUPTIVE MODELS ARE EMERGING IN THE
CUSTOMER DRIVEN SPACE
SELLER DRIVEN ENTERPRISE CUSTOMER CENTRIC ENTERPRISE CUSTOMER DRIVEN ENTERPRISE
“Maximize product
profitability”
Push Selectively Target Pull (collaboration)
DATA ANALYSIS
SERVICE Interactive & Proactive
UNDERSTANDING Segmented Individualized
CUSTOMER OFFERS Intra-enterprise bundles Inter-enterprise bundles
ORGANISATION Integrated Function Customer Outcome
CHANNELS Segment Driven Integrated and Seamless
“Maximize market
share”
“Maximize customer
lifetime value”
MARKETING
Passive & Reactive Interactive & Reactive
Insight as Art Factual insight Predictive insight
Broad
Product Driven
Singular
Functional Silo

32.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 32
EDUCATION DISRUPTION
› Platforms that facilitate the creation of user-generated content.
› Simple to develop online learning products that students will be able to build products
that help them teach other students.
› Parents will be able to assemble tools to tutor their children.
› Teachers will be able to create tools to help the different types of learners in their
classrooms.
› Rather than being “pushed” into classrooms through a centralized selection process, they
will be pulled into use through self-diagnosis—by teachers, parents, and students.
› Facilitated networks, not VAP businesses, will be the business models of distribution.
› Ultimately, people will assemble learning modules together into entire courses whose
approach is truly student-centric—custom-configured to each different type of learner.
What will this facilitated value network look like?
Connectivism + Constructivism = The facilitated value network

33.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 33
THE STUDENT CENTRIC
CLASSROOM
› For several years, most teachers and students will still have conventional textbooks.
› But little by little, textbooks will give way to computer-based online courses—increasingly
augmented by user-generated student-centric learning tools.
› The second, or student-centric, stage of this disruption will move to the mainstream when users
and teachers start piecing together enough tool modules to create entire courses designed for
each type of learner.
› At some point, administrators, education committees, and unions will recognize that even
without explicit administrative decisions ever having been made, student-centric learning has
become mainstream.
› Analysis done by Clayton Christensen, suggests that this will happen in approximately 2014,
when online courses have a 25 precent market share
› The Disruption is more about the role of the teacher than the change to the classroom
› Instead of spending most of their time delivering one-size-fits-all lessons year after year, teachers
can spend much more of their time traveling from student to student to help individuals with
individual problems.
The Disruption Journey

34.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 34
THE STUDENT CENTRIC
CLASSROOM
› Instead of spending most of their time delivering one-size-fits-all lessons year after year, teachers can spend much more of
their time traveling from student to student to help individuals with individual problems.
› Teachers will act more as learning coaches and tutors to help students find the learning approach that makes the most sense
for them.
› They will mentor and motivate them through the learning with the aid of real-time computer data on how the student is
learning.
› This means, however, that they will need very different skills to add value in this future from the skills with which education
schools are equipping them today.
› Since customization will be a major driver and benefit of this shift to student-centric online technology, increasingly teachers
will have to be able to understand differences in students and be able to provide individual assistance that is complementary to
the learning model each student is using.
› Because student-centric technology allows for far more personalized attention from a teacher, we can do something
counterintuitive in education—increase the number of students per live teacher.
› Facilitating this disruption of instruction has the potential to break the expensive trade-offs in which school districts have been
trapped so that individual teachers can do a better job and give individual attention to more students.
› As a result, there potentially will be more funds to pay teachers better.
The Disruption is more about the role of the
teacher than the change to the classroom

35.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 35
NEW VALUE ENGINES MUST BE CREATED TO
CATER FOR NEW VALUE NETWORKS AND
BUSINESS MODELS
The Selling Concept - Product Driven
The Value Concept - Customer Driven
The Marketing Concept - Customer Centric
Production Products
Selling and
Promotion
Profit
Through sales
volume
STARTING
POINT FOCUS MEANS ENDS
Target Market
Segment
Segment
Needs
Integrated
Marketing
Profit through
Increased
Market Share
STARTING
POINT FOCUS MEANS ENDS
Target individual
Customer
Intention
Outcome
Marketing
Profit through
customer lifetime
satisfaction
STARTING
POINT FOCUS MEANS ENDS
The customer driven shift
The digital
strategy focus

36.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 36
‘Enterprise Lifecycle's
2014 © Enterprise Architects PTY LTD
PERORMANCE
TIME
ENTERPRISE
BRAND PLATFORM
BUSINESS MODEL
BUSINESS CAPABILITIES
PRODUCT
PRODUCT AND BUSINESS MODELS GO STALE
Organisations…and
architects need to be able to
provide the means to enable
this change

37.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 37
DIFFERENT BUSINESS MODELS NEED TO BE
MIXED
Innovate
Build Advantages
Assemble
Prolong
Advantages
Mix
Reduce
Disadvantages
Aggregator Category Leader Consolidator Customizer Disintermediator
Experience
Provider
Fast Follower Innovator Platform provider Premium Player
Regulation
Navigator
Reputation Player Risk Absorber Solutions Provider Value Player
Structure vs Behaviour - Utility Business Model Stereotypes provide a set of standard
business model execution styles to work with
Standard assembly patterns of functional
and cross functional capabilities can be
leveraged as foundation business models to
kick-start your efforts
* Based upon “The Essential Advantage”
Leinwand & Mainardi

38.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 38
*Adapted from Geoffrey Moore’s:
Dealing with Darwin
Each industry moves along a life
cycle, with different opportunities
for competitive advantage at each
stage
CHANGING BUSINESS
MODELS
Innovative business
models are developed
towards the end of the
maturity phase
Introduction Growth Maturity Decline
TOTAL
INDUSTRY
REVENUE
TIME
DISRUPTOR
ENTERS
MARKET SHARE, REVENUE
& COST BECOME KEY
PRODUCT
INNOVATION
REDUCES
PROCESS INNOVATION
BEGINS
PRODUCT LEADERSHIP CUSTOMER INTIMACY
OPERATIONAL EXCELLENCE
V A L U E D I S C I P L I N E
O R I E N T A T I O N
T H R O U G H T H E
I N D U S T R Y
L I F E C Y C L E
Business Model
Transition

39.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 39
THE COMPLEXITY OF BUSINESS MODEL DESIGN
HAS INCREASED
Leading and Best Practice Research, 2011/2012
Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries

40.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 40
NON-CORE CAPABILITY (MEET)
The goal is to meet market standards,
exploitation and reliability
Produce consistent, predictable outcomes
Focus on effectiveness and efficiency
CORE COMPETING CAPABILITY (COMPETE)
The goal is competitive parity
Focus on innovation and efficiency
CORE DIFFERENTIATING CAPABILITY (BEAT)
The goal is competitive advantage,
exploration & validity
Focus on innovation and efficiency
Produce outcomes that meet an objective
FROM THE BUSINESS MODEL TO
THE CAPABILITY RESOURCES
A reliable system will
produce the same test
results every time
A valid system will produce a
result that is shown, through the
passage of time, to be correct
C O S T
V A L U E
5%
15%
80%
LEADING AND BEST PRACTICE RESEARCH, 2011/2012
THE ENVIRONMENT
BUSINESS MODEL
Revenue Model
Value Model
Product & Service Model
Performance Model
Cost Model
Operating model
Differentiating
Capability
Non-Core
Capability
Competing
Capability

41.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 41
UNDERSTANDING THE ENGINE TO PRODUCE
THE BUSINESS FIT
The operating model delivers the infrastructure required to deliver the products and services to the customer segments
THE ENVIRONMENT
BUSINESS MODEL
Markets
Industries
Customers
Market Segment
Channels
Customer Relationships
Value Proposition
Offering: Services/Products
Processes/ Value Chains
Capabilities
Business Service
Functions
Data
Applications
Technology
MARKET
MODEL
OPERATING
MODEL
PRODUCTS &
SERVICES
MODEL
Aligning what is valuable to the customer and what is value to the businessis referred to as the
business fit. This means that the engine delivers both aspects and is the ideal mix an organization needs to engineer for.

42.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 42
LINKING MARKET MODELS TO PRODUCT AND
SERVICE MODELS
T H E V A L U E & V A L U A B L E I N T E G R AT I O N
Products and Services
Valuable to the Customer
PRODUCT N
PRODUCT I
PRODUCT TPRODUCT Y
PRODUCT K
SERVICE DSERVICE N
SERVICE H SERVICE P
PRODUCT B SERVICE N
SERVICE T
PRODUCT S
SERVICE A
PRODUCT X
PRODUCT H
SERVICE O
PRODUCT N
PRODUCT ESERVICE C
SERVICE Q
SERVICE N
SERVICE T
SERVICE B
Customer Outcome
CUSTOMER INTERACTION MAP, CUSTOMER SEGMENT ABC
Establishing my account is
quick and simple…
Integration is quick and
easy, with the right help
available
Efficient, with choices that
make it convenient
I know when the shipment
will arrive
I can find out whether my
shipments were delivered;
I get a meaningful
resolution to my problem
“I want to set-up my
account”
“I want to get ready to send
my products”
“I want to send a shipment”
“I need to know when my
shipment will arrive”
“I want confirmation that my
shipments have arrived”
“Something has gone wrong
with my delivery…”
% of accounts set-up in
<X hours
% of accounts that utilise
more than X
% of orders with no
manual intervention
% of articles with at least
4 scans
Service Delivery
Performance Metric
# of complaints per
million products
RESEARCH EVALUATE PURCHASE USE INTEGRATE SERVE
Value to the Business

43.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 43
CUSTOMER BEHAVIOUR: UNDERSTAND THE EMOTIONAL
ROL L ER COASTER OF YOUR CUSTOMERS
Incremental, significant or transformation changes required to improve the
experience

44.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 44
BUSINESS BEHAVIOUR MEETS CUSTOMER
BEHAVIOUR
What Value Maps are now required to address the sub-optimal customer
experience
What are the value maps required
to deliver this outcome

45.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 45
THE ENVIRONMENT
BUSINESS MODEL
Markets
Industries
Customers
Market Segment
Channels
Customer
Relationships
Value Proposition
Offering:
Services/Products
Processes/ Value
Chains
Competencies
Business Service
Functions
Data
Applications
Technology
FOUR LEVELS OF MIXING
AT THE CAPABILITY LEVEL
Its at this point that business begins to see the true value of using capabilities
Standard functional capabilities can be
aligned to a value chain
Cross functional capabilities assemble and mix functional capabilities to achieve
outcomes in the value map or driver tree
Cross functional capabilities each drive out different
outcomes. Underlying functional capabilities will
have varying perspectives of capability maturity and
capability uplift
You can also use cross functional models as scenarios to test the
capability anchor model validity

46.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 46
BUSINESS MODEL EVALUATION
BUSINESS MODEL OPTIONS ARE EVALUATED AGAINST VALUE DRIVERS OR
BUSINESS MODEL MECHANICS TO DETERMINE SHORTLISTS

47.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 47
ARCHITECTURE DELIVERY MODELS
E VA LU AT I O N O F ST R AT E G I C B U SI N E SS O P T I O N S
The capability mixes
are evaluated against
each scenario to
determine the
optimal path going
forward
REQUIREMENTS: PROGRAM “X” REQUIRES A $100M 5-YEAR NET BENEFIT AND MUST BE IMPLEMENTED IN UNDER 3 YEARS.
Business Models
Value Streams

48.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 48
UNDERSTANDING VALUE, PERFORMANCE AND
MOTIVATION
W H AT C O M E S F I R S T ?
Mission
Strategies
Tactics
Vision
Goals
Objectives
OUTCOME
C A P A B I L I T Y
People
Process
Technology
Information
Business
Model
Value Chain
Capabilities
Performance
Model
Value
Model
ENDMEANS
HOW

49.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 49
ONE SIZE DOES NOT FIT ALL
DIFFERENT PROBLEMS REQUIRED DIFFERENT ORGANIZATION STRUCTURE
RESPONSES
Christensen, Clayton M. (2010-09-06).
Disrupting Class, Expanded Edition: How Disruptive Innovation Will Change the Way the World Learns

50.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 50
ABSTRACT
CONCRETE
PROBLEM SOLUTION
Understanding the
problem from a
human centred
perspective
Prototyping and
testing for
disruptive options
Understanding the
problem through
drivers, pressures,
environment and
working out
motivation
Developing operating
models and solutions
SEQUENCING THE PROCESS
W H E R E TO S TA R T ?
TRANSFORMATION
FOCUSSED
DISRUPTION
FOCUSSED
Problem Motivation Business Model Problem MotivationBusiness Model

51.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 51
“ARCHITECTURE THINKING”
MOTIVATION MODEL BUSINESS MODEL
SERVICE MODEL
CAPABILITY MODEL
People
ROADMAP
GOVERNANCE
* Closed feedback
loop to Motivation
Model
Vision
Strategy
Blueprinting
Roadmapping
Governance
Information
Technology
Process
Design Thinking: Empathise, Define, Ideate, Prototype, Test
MARKET MODEL
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)

52.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 52
MOTIVATION MODEL
BUSINESS
CAPABILITIES
IM ROADMAP
GOVERNANCE
* Closed feedback
loop to Motivation
Model
Information
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
S O C I A L I S E W I T H B U S I N E S S , L I N K E I M E F F E C T I V E N E S S T O B U S I N E S S
G O A L S A N D R I S K , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R
LINKING INFORMATION CAPABILITY ROADMAP TO BUSINESS
CAPABILITY, RISK AND MOTIVATION
Understand business motivation
with respect to information
management
Identify the critical business
capabilities to support the strategies
Define roadmap – prioritised to
support timely delivery of EIM
capability linked to business need
1 2 3Understand changing needs for a
digital business
Identify the information risk
appetite and risks
Assess how application strategies
are impacted by low EIM
capability maturity
Identify the EIM capabilities
materially impacting business
capability and information risk –
pertinent to the business
motivation
4
6 7 8 9 Measure and monitor performance
5 Assess how business capability
effectiveness is materially impacted
by low EIM capability maturity
1
2
3
4
6
8
7
Information
Risk
Digital
Requirements
9
APPLICATIONS
5

53.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 53
MOTIVATION MODEL
CLOUD SERVICE
OFFERINGS
CAPABILITY MODEL
ROADMAP
GOVERNANCE
* Closed feedback
loop to Motivation
Model
Information
Technology
Process
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
S O C I A L I S E , O B T A I N C O N S E N S U S , M E A S U R E & M O N I T O R
CLOUD STRATEGY & ROADMAPPING JOURNEY
Understand the motivation for Cloud Understand the risk appetite of the
business and the risk profile of the
offering
Obtain consensus, support and
commitment
1 2 3Understand business requirements for
Cloud
Identify and classify assets going into
the Cloud
Assess the Cloud service offerings Define the roadmap
4
5 6 7 8 Measure and monitor performance
1
2
3
4
5
6
7
Information &
Risk
CLOUD
REQUIREMENTS
8
APPLICATIONS

54.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 54
ROLES &
OP. MODEL
HUMAN CENTRED SERVICE AND CAPABILITY
DEVELOPMENT
CAPABILITY
MODEL
ROADMAP
GOVERNANCE
* Closed feedback
loop to Motivation
Model
MEANS ASSESSMENT
MOTIVATION
MODEL
INFLUENCERS
ASSESSMENT
MEANS ENDS
SERVICE MODEL /
CATALOGUE
WHAT
WHY
COMMUNICATION
ENGAGEMENT
MODEL
DEMAND
ANALYSIS SOURCING
BUSINESS CONTEXT
HOW
WHO
WHERE
WHEN
CAPABILITY
ASSESSMENT
BUSINESS MODEL
C U S T O M E R P E R S O N A S
V A L U E P R O P
E M P A T H Y M A P S
CURRENT FUTURE
SERVICE DESIGN PROCESS
ENABLES

55.
B U S I N E S S D E S I G N B Y C R A I G M A R T I N - E N T E R P R I S E A R C H I T E C T S / F H O | PAGE 55
THE BUSINESS OF ARCHITECTURE
ROADMAP
ROLES &
OP. MODEL
GOVERNANCE
* Closed feedback loop to
Motivation Model
MEANS ASSESSMENT
SERVICE MODEL
/ CATALOGUE COMMUNICATION
ENGAGEMENT
MODEL
DEMAND
ANALYSIS SOURCING
CAPABILITY
ASSESSMENT
MOTIVATION
MODEL
INFLUENCERS
ASSESSMENT
MEANS ENDS
BUSINESS MODEL
CAPABILITY
MODEL
BUSINESS CONTEXT
Where
When
Who
How
Why
What
Enables
MANDATE
SERVICE CO-DESIGN
CURRENT FUTURE

56.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 56
ABOUT
zero HOURS A DAY
BACK OFFICE
VENDOR ALIGNMENT
MORE THAN 1600 PEOPLE
TRAINED IN ARCHITECTURE
PRACTICES (AND RISING)
12YEARS IN BUSINESS
8GLOBAL OFFICES
1600
MORE THAN 10,000 DAYS OF
ARCHITECTURE SERVICES
DELIVERED LAST YEAR
10,000
oneCOMMON METHOD
20
four
sixOPERATING IN
6 CONTINENTS

57.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 57
OUR SERVICES
Servicing the Strategy
and Architecture needs
of Global Organisations
STRATEGY CONSULTING
› Business Architecture
› Strategic Services & Operating Model
Design:
» Business Services & Capabilities
» IT Services & Capabilities
› Segment Strategies and Roadmaps:
» Customer Experience & Digital
» Enterprise Information Management
» Big Data Analytics
» Applications
» Cloud & Infrastructure
» Security, Risk & Resilience
» Innovation Management
PRACTICE DEVELOPMENT
› Architecture Service Model Design
› Architecture Operating Model Design
› Service and Capability Readiness
Assessment
› Professional Training and Certification
(Business Architecture, Information
Management, TOGAF®, CDMP®,
ArchiMate® and Design Thinking)
› Project Architecture Resources
› Architecture Talent Strategy and
Professional Development
› Architecture Back Office Services

58.
C A U D I T 2 0 1 4 - E N T E R P R I S E A R C H I T E C T S | PAGE 58
QUESTIONS?