Interoperability

Industry Enterprise Application Component Specifications Requirements Competitive Strategy

Today’s Agenda Competitive Strategy – What is Competitive Advantage? – What is Value? – What are the Generic Competitive Strategies? Sources of Competitive Advantage – Where to look for opportunities for Competitive Advantage? Business Execution Platform – How to build a platform to transform Competitive Strategies into Architecture?

COMPETITIVE STRATEGY Organisation's plan to differentiate it from its rivals.

War Government Business Chess Personal Life Sports Competition And so on... Strategy

Strategy is a plan that aims to give the enterprise a competitive advantage over rivals.

At the heart of the Failure or Success of organisations Is the search for a favourable competitive position in an industry, the fundamental arena in which competition occurs. Competitive strategy aims to establish a profitable and sustainable position against the forces that determine industry competition. Competitive Strategy is driven by Industry Attractiveness (shaped by 5 forces) Relative Competitive Position in the industry Competitive Strategy

Value The amount of buyers that we are willing to pay for what a companies products and/or services. Measured by total revenue. Profitable if the value exceeds the costs involved creating and/or delivering the product/service.

Generic Competitive Strategies to achieve Competitive Advantage – Cost Leadership – Differentiation – Focus (Cost Focus, Differentiation Focus) Creating Value for buyers the exceeds the cost of doing so is the principal aim of any generic strategy. Implementation of any strategy is as, if not more, important as the strategy itself! Competitive Strategy

SOURCES OF COMPETITIVE ADVANTAGE IN BUSINESS ARCHITECTURE Identifying Opportunities for Value Creation

We need a holistic, abstract view of the business We need an approach to analyse business by its functions – What it does, then how it does it... We need to understand the decomposition of the organisation and what it does to spot opportunities for Competitive Advantage Opportunities for Value Creation

Evolution of the Enterprise shaped by Competitive Strategy Time Relative Change Durability Abstraction Organisational Structures... Process Models... Infrastructure Diagrams...

Planning Collaboration Strategic Collaboration Operational Collaboration Property and Advisory Project Management Financial Management Human Resources Sales Marketing Channel Management Provide Service Procurement Produce Product Business Intelligence Logistics Advanced Planning Design Product/Service Refine Existing Product/Service Develop New Product/Service Product/Service Management Customers

Order Management Sales Management Point of Sales Product Pricing Prospect Qualification Order Fulfilment Transportation Management Inventory Management Warehouse Management Business Architecture decomposes organisation’s operational model into abstract business functions called capabilities; – Capabilities are Abstract, Stable and have Clear Boundaries

Your customers (buyers) and suppliers have capabilities also. Business Architectures are linked through connections between capabilities across organisations. And your rivals has theirs too! “How others are doing it?”

Most companies in the same industry do the same things (WHAT); the differentiation is in HOW they do things.

Competitive Strategy shapes the Evolution of the Enterprise to achieve and sustain Competitive Advantage. – It also alters WHAT through (i.e. Acquisition and/or Organic Growth) LawRetail Manufacturing BankingUtilityHealth

A company has a cost advantage if its cumulative cost of performing all value capabilities is lower than competitors’ costs. Capability Model provides the basic tool for cost analysis Cost Advantage

Planning Collaboration Strategic Collaboration Operational Collaboration Property and Advisory Project Management Financial Management Human Resources Sales Marketing Channel Management Provide Service Procurement Produce Product Business Intelligence Logistics Advanced Planning Design Product/Service Refine Existing Product/Service Develop New Product/Service Product/Service Management Customers SalesProvide Service Procurement Produce Product Logistics Design Product/Service

A company differentiates itself from its competitors if it can be unique at something that is valuable to buyers. Not all uniqueness leads to differentiation Differentiation has a cost associated with it too!! Differentiation is not always about the product but opportunities for uniqueness and better performance can be found in Business Architecture Differentiation

Planning Collaboration Strategic Collaboration Operational Collaboration Property and Advisory Project Management Financial Management Human Resources Sales Marketing Channel Management Provide Service Procurement Produce Product Business Intelligence Logistics Advanced Planning Design Product/Service Refine Existing Product/Service Develop New Product/Service Product/Service Management Customers Sales Channel Management Provide Service Procurement Produce Product Logistics Design Product/Service Develop New Product/Service

Technology as Competitive Advantage Technology can alter industry structure and level the playing field. Technology can be Competitive Advantage if it enhances Cost Advantage or Differentiation Think technology in Products/Services Capabilities and connection between spanning customers and suppliers... Innovation is the fundamental approach to Technology Strategy Architecture as needs to marry right technologies to Competitive Strategy to achieve or sustain Competitive Advantage Think about S+S, Cloud... How can you leverage these as Competitive Advantage? Which technologies do your rivals invest and use?

EFFECTIVE BUSINESS EXECUTION PLATFORM Foundation for Delivering Strategic Initiatives

Sources for Competitive Advantage Change driven through Strategic Initiatives Represents TO BE IT Architecture Architecture Governance Transformation Competitive Strategy Technology/IT Strategy Architecting Process Reference Architecture Architecture Strategy Enterprise Architecture Architecture Delivery Delivery Model Capabilities PeopleProcessIT Business Architecture Application Data Infrastructure Operations Security IT Architecture Hardware, Network, Storage IT Governance Limits and Opportunities for Competitive Advantage

Understand your organisation's Competitive Strategy – Technology/IT Strategy must be part of the Competitive Strategy

Identify Opportunities for Competitive Advantage in your Business Architecture; – Cost Advantage – Differentiations Technology can be a Competitive Advantage Inform Competitive Strategy about the Limits and Opportunities

Develop an Architecture Strategy to reflect organisation’s IS/IT Strategy – Strategy sets the context – Reference Architecture helps you keep an eye on the goal – Architecting Process helps you get there – Architecture Delivery makes it real

SUMMARY Architecture as a Business Differentiator?

Understanding of Competitive Strategy is key - Cost Leadership, Differentiation and Focus Focus on Enterprise Architecture - Architecture Strategy (Plan to get to...) - Reference Architecture (Where to get to...) - Architecture Process (How to get to...) - Architecture Delivery (Execution of the Plan) Focus on Business Architecture - Limits and Opportunities for Competitive Advantage - Competitive Strategy shapes How you do things... - People, Process and Technology - Capability Model (What you do) - Technology Build and action on the platform - Project by project, initiative by initiative...

Thank you... Please for And enjoy the Drinks Reception and rest of the event! Q&A