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Durable Goods Industry Business Reference Architecture

Capability maps, value streams, and strategy maps for durable goods manufacturers.

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  • Manufacturing leadership requires a unified and validated view of business capabilities that help CIOs and leadership accelerate the strategy design process and that align initiatives, investments, and strategy.
  • The business and IT often focus on a project, ignoring the holistic impact and value of an overarching value stream and business capability view.

Our Advice

Critical Insight

  • Using an industry-specific business reference architecture is central, and has many benefits, to organizational priorities. It’s critical to understanding, modeling, and communicating the operating environment and the direction of the organization, but more significantly, to enabling measurable top-line organizational outcomes and the unlocking of direct value.

Impact and Result

  • Demonstrate the value of IT’s role in supporting your organization’s capabilities while highlighting the importance of proper alignment between organizational and IT strategies.
  • Apply reference architecture techniques such as strategy maps, value streams, and capability maps to design usable and accurate blueprints of your manufacturing operations.
  • Assess your initiatives and priorities to determine if you are investing in the right capabilities. Conduct capability assessments to identify opportunities and to prioritize projects.

Durable Goods Industry Business Reference Architecture Research & Tools

1. Durable Goods Industry Business Reference Architecture – Accelerate the strategy design process

Leverage a validated view of the organization’s business capabilities to realize measurable top-line business outcomes and unlock direct value.

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Durable Goods Industry Reference Architecture

Business Capability Maps, Value Streams, and Strategy Maps for the Durable Goods Industry

Analyst Perspective

In the age of disruption, IT must end misalignment and enable value realization.

The image contains a picture of Kevin Tucker.

An industry reference architecture helps accelerate your strategic design process and enhances IT’s ability to align people, process, and technology with key business priorities.

Durable Goods Manufacturing firms require a unified and validated view of their business capabilities that aligns initiatives, investments, and strategy in order to provide value to their clients and stakeholders.

Kevin Tucker

Principal Research Director

Manufacturing, Supply Chain & Logistics

Info-Tech Research Group

Executive Summary

Your Challenge

  • You are a CIO or head of IT who needs to improve your organization’s understanding of business capabilities and how IT can support the creation of new products.
  • Your organization wants to sharpen its alignment and focus on organizational outcomes and value by using automation and cost-effective methods that produce the most reliable and high-quality outcomes.
  • Before executing any strategic initiatives, use this blueprint to understand how the organization creates value.

Common Obstacles

  • You don’t have a clear path for capturing the right information, engaging the right people, or linking with the needs of the business and aligning with operational technology (OT).
  • The business and IT often speak in their own languages without a holistic and integrated view of mission, strategy, goals, objectives, business processes, projects, and measures of success.
  • OT and IT organizations often focus their attention within silos and miss the big-picture need for a synergistic approach for successful outcomes.

Info-Tech’s Approach

  • Build your organization’s capability map by defining the organization’s value stream and validating the industry reference architecture.
  • Use business capabilities to define strategic focus by defining the organization’s key capabilities and developing a prioritized strategy map.
  • Assess key capabilities for planning priorities through a review of business processes, information, and application and technology support of key capabilities.
  • Adopt capability-based strategy planning by ongoing identification and road-mapping of capability gaps.

Info-Tech Insight

Using an industry-specific reference architecture is central and has many benefits to organizational priorities. It's critical not only to understanding, modeling, and communicating the operating environment and the direction of the organization but also, more significantly, to enabling measurable top-line organizational outcomes and the unlocking of direct value.

Reference Architecture Framework

The image contains a screenshot of the Reference Architecture Framework thought model.

Industry Overview: Durable Goods

The Durable Goods Manufacturing industry comprises traditional manual processes where goods are produced with tools, fixtures, hand-operated tools, paper-based recording, and a whole host of other manual processes.

Many of these traditional organizations have needed to resort to very costly inspection and quality management processes to ensure that they are delivering high-quality products across all of the business sectors they serve.

In recent years the onset of new technologies has created opportunities for new market entrants to disrupt a wide range of manufacturing industries, and at the same time the quality management tools have become much more sophisticated and accurate.

New technologies for producing products, including robotics, have enabled businesses to significantly reduce costs while providing a higher quality product and also meeting the flexible on-time-delivery demands that customers have grown to expect.

The image contains a screenshot of the Value Chain for the Durable Loads Industry. The value chains starts at design product, produce product, sell product, and after-sale support.

Figure above: Value Chain for the Durable Goods Industry

Business Value Realization

Business value defines the success criteria of an organization as manifested through organizational goals and outcomes, and it is interpreted from four perspectives:

  • Profit generation: The revenue generated from a business capability with a product that is enabled with modern technologies.
  • Cost reduction: The cost reduction when performing business capabilities with a product that is enabled with modern technologies.
  • Service enablement: The productivity and efficiency gains of internal business operations from products and capabilities enhanced with modern technologies.
  • Customer and market reach: The improved reach and insights of the business in existing or new markets.
The image contains a screenshot of the Business Value Matrix as described in the above text.

Value, goals, and outcomes cannot be achieved without business capabilities

Break down your business goals into strategic and achievable initiatives focused on specific value streams and business capabilities.

The image contains a screenshot of an example of breaking down business goals into strategic and achievable initiatives.

Durable Goods Manufacturing business capability map

Business capability map defined…

In business architecture, the primary view of an organization is known as a business capability map.

A business capability defines what a business does to enable value creation, rather than how. Business capabilities:

  • Represent stable business functions.
  • Are unique and independent of each other.
  • Typically will have a defined business outcome.

A business capability map provides details that help the business architecture practitioner direct attention to a specific area of the business for further assessment.

The image contains a screenshot example of the Durable Goods Manufacturing business capability map.

Glossary of Key Concepts

A business reference architecture consists of a set of models to provide clarity and actionable insight and value. Typical techniques and terms used in developing these models are:

Term/Concept

Definition

Industry Value Chain

A high-level analysis of how the industry creates value for the consumer as an overall end-to-end process.

Business Capability Map

The primary visual representation of the organization’s key capabilities. This model forms the basis of strategic planning discussions.

Industry Value Streams

The specific set of activities an industry player undertakes to create and capture value for and from the end consumer.

Strategic Objectives

A set of standard strategic objectives that most industry players will feature in their corporate plans.

Industry Strategy Map

A visualization of the alignment between the organization’s strategic direction and its key capabilities.

Capability Assessments

Based on people, process, information, and technology, a heat-mapping effort that analyzes the strength of each key capability.

Capability

An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve.

Source: The Open Group, 2009

Tools and templates to compile and communicate your reference architecture work

The image contains a screenshot of the Durable Goods Industry Reference Architecture Template.

The Durable Goods Industry Reference Architecture Template is a place for you to collect all the activity outputs and outcomes you’ve completed for use in next steps.

Download the Durable Goods Industry Reference Template

Info-Tech’s methodology for a reference architecture

1. Build your organization’s capability map

2. Use business capabilities to define strategic focus

3. Assess key capabilities for planning priorities

4. Adopt capability based strategy planning

Phase Steps

1.1 Define the Organization's Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organization's Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

Phase Outcomes

  • Defined and validated value streams specific to your organization
  • A validated Level 1 business capability map
  • Decomposed Level 2 capabilities
  • Identification of Level 1 cost advantage creators
  • Identification of Level 1 competitive advantage creators
  • Defined future-state capabilities
  • Identification of capability process enablement
  • Identification of capability data support
  • Identification of capability application and technology support
  • Prioritization of key capability gaps

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization. A typical GI is between 6 to 9 calls over the course of 1 to 4 months.

Phase 1

Call #1: Introduce Info-Tech’s industry reference architecture methodology.

Phase 2

Call #2: Define and create value streams

Call #3: Model Level 1 business capability maps.

Call #4: Map value streams to business capabilities.

Phase 3

Call #5: Model Level 2 business capability maps.

Call #6: Create a strategy map

Call #7: Introduce Info-Tech's capability assessment framework.

Phase 4

Call #8: Review capability assessment map(s).

Call #9: Discuss and review prioritization of key capability gaps and plan next steps.

Phase 1

Build Your Organization’s Capability Map

Phase 1

Phase 2

Phase 3

Phase 4

1.1 Define the Organization's Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organization's Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

This phase will walk you through the following activities:

  • Identify and assemble key stakeholders
  • Determine how the organization creates value
  • Define and validate value streams
  • Determine which business capabilities support value streams
  • Accelerate the process with an industry reference architecture
  • Validate the business capability map
  • Establish Level 2 capability decomposition priorities
  • Decompose Level 2 capabilities

This phase involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Step 1.1

Define the Organization’s Value Stream

Activities

1.1.1 Identify and assemble key stakeholders

1.1.2 Determine how the organization creates value

1.1.3 Define and validate value streams

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Outcomes of this step

  • Defined and validated value streams specific to your organization

1.1.1 Identify and assemble key stakeholders

1-3 hours

Build an accurate depiction of the business.

  1. It is important to make sure the right stakeholders participate in this exercise. The exercise of identifying capabilities for an organization is very introspective and requires deep analysis.
  2. Consider:
    1. Who are the decision-makers and key influencers?
    2. Who will impact the business capability work? Who has a vested interest in the success or failure of the outcome?
    3. Who has the skills and competencies necessary to help you be successful?
  3. Avoid:
    1. Don’t focus on the organizational structure and hierarchy. Often stakeholder groups don’t fit the traditional structure.
    2. Don’t ignore subject matter experts on either the business or IT side. You will need to consider both.

Input

Output

  • List of who is accountable for key business areas and decisions
  • Organizational chart
  • List of who has decision-making authority
  • A list of the key stakeholders
  • Prioritized list of decision-making support needs
  • Durable Goods Industry Business Reference Architecture Template

Materials

Participants

  • Whiteboard/Flip Charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

Define the organization’s value streams

  • Value streams connect business goals to the organization’s value realization activities. They enable an organization to create and capture value in the market place by engaging in a set of interconnected activities. Those activities are dependent on the specific industry segment an organization operates within. Value streams can extend beyond the organization into the supporting ecosystem, whereas business processes are contained within and the organization has complete control over them.
  • There are two types of value streams: core value streams and support value streams. Core value streams are mostly externally facing: They deliver value to either an external or internal customer and they tie to the customer perspective of the strategy map. Support value streams are internally facing and provide the foundational support for an organization to operate.
  • An effective method for ensuring all value streams have been considered is to understand that there can be different end-value receivers. Info-Tech recommends identifying and organizing the value streams with customers and partners as end-value receivers.
The image contains a screenshot of value streams and how they connect to business goals and value realizations. This includes industry value chains, to value receivers, to then value streams.

Value stream descriptions for Durable Goods

Value Streams

Design Product

  • Manufacturers proactively analyze their respective markets for any new opportunities or threats.
  • They design new products to serve changing customer needs or to rival any new offerings by competitors.
  • A manufacturer’s success depends on its ability to develop a product that the market wants at the right price and quality level.

Produce Product

  • Optimizing production activities is an important capability for manufacturers. Raw materials and working inventories need to be managed effectively to minimize wastage and maximize the utilization of the production lines.
  • Processes need to be refined continuously over time to remain competitive, and the quality of the materials and final products needs to be strictly managed.

Sell Product

  • Once the product is produced, manufacturers need to sell the products. This is done through distributors and retailers and, in some cases, directly to the end consumer.
  • After the sale, manufacturers typically have to deliver the product, provide customer care, and manage complaints.
  • Manufacturers also randomly test their end products to ensure they are meeting quality requirements.

After-Sale Support

  • Once the product is sold, manufacturers need to consider how they will handle the relationships with customers and channel(s). This includes:
    • Measuring satisfaction.
    • Returns management.
    • Capturing enhancements and filtering them back into R&D.
    • Product replacement.
    • Product enhancement.
    • Invoicing.
    • Collections.
    • Service and repairs.

Determine how the organization creates value

Begin the process by identifying and locating the business mission & vision statements.

The image contains a screenshot of an example of identifying and locating the business mission & vision statements. Corporate Websites, Business Strategy Documents, and Business Executives need to be taken into consideration when identifying and locating the business mission & vision statements.

What is business context?

“The business context encompasses an understanding of the factors impacting the business from various perspectives, including how decisions are made and what the business is ultimately trying to achieve. The business context is used by IT to identify key implications for the execution of its strategic initiatives.”

Source: Businesswire, 2018

1.1.2 Determine how the organization creates value

1-3 hours

The first step of delivering value is defining how it will happen.

  1. Use the organization’s industry segment to start a discussion on how value is created for customers. Working back from the moment value is realized by the customer, consider the sequential steps required to deliver value in your industry segment.
  2. Consider:
    1. Who are your customers?
    2. What tasks are your customers looking to accomplish?
    3. How does your organization’s set of products and services help them accomplish that?
    4. What are the benefits the organization delivers to them?
  3. Avoid:
    1. Don’t boil the ocean. Focus on your industry segment and how you deliver value to your partners and customers specifically.

Download the Durable Goods Industry Reference Architecture Template

1.1.2 Determine how the organization creates value

Input

Output

Materials

Participants

  • Business strategy
  • Financial statements
  • Results of SWOT analysis
  • Info-Tech’s industry-specific reference architecture accelerator
  • Durable Goods Industry Business Reference Architecture Template
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

1.1.3 Define and validate value streams

1-3 hours

Unify the organization’s perspective on how it creates value.

  1. Write a short description of the value stream that includes a statement about the value provided and a clear start and end for the value stream. Validate the accuracy of the descriptions with your key stakeholders.
  2. Consider:
    1. How does the organization deliver those benefits?
    2. How does the customer receive the benefits?
    3. What is the scope of your value stream? What will trigger the stream to start and what will the final value be?
  3. Avoid:
    1. Don’t start with a blank page. Use Info-Tech’s value stream definitions as a starting point and customize from there.

Input

Output

  • Business strategy
  • Info-Tech’s industry-specific reference architecture accelerator
  • List of organization-specific value streams
  • Detailed value stream definition(s)

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

Step 1.2

Develop a Business Capability Map

Activities

1.2.1 Determine which business capabilities support value streams

1.2.2 Accelerate the process with an industry reference architecture

1.2.3 Validate the business capability map

1.2.4 Establish Level 2 capability decomposition priorities

1.2.5 Decompose Level 2 capabilities

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Outcomes of this step

  • A validated Level 1 business capability map
  • Decomposed Level 2 capabilities

Develop a business capability map – level 1

  • Business architecture consists of a set of techniques to create multiple views of an organization; the primary view is known as a business capability map.
  • A business capability defines what a business does to enable value creation and achieve outcomes, rather than how. Business capabilities are business terms defined using descriptive nouns such as “Marketing” or “Research and Development.” They represent stable business functions, are unique and independent of each other, and typically will have a defined business outcome. Business capabilities should not be defined as organizational units and are typically longer lasting than organizational structures.
  • A business capability mapping process should begin at the highest-level view of an organization, the Level 1, which presents the entire business on a page.
  • An effective method of organizing business capabilities is to split them into logical groupings or categories. At the highest level, capabilities are either “core” (customer-facing functions) or “enabling” (supporting functions). As a best practice, Info-Tech recommends dividing business capabilities into the categories illustrated to the right:
The image contains a screenshot the Business Capability Map-Level 1.

Business capability map for Durable Goods

The image contains a screenshot of the business capability map for Durable Goods.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

Glossary of Capabilities

A business capability is an ability that an organization, person, or system possesses. Capabilities are typically expressed in general, high-level terms and typically require a combination of organization, people, processes, and technology to achieve. Level 1 Durable Goods capabilities that are used in this reference architecture model are:

Capability

Definition

Design Product

Manufacturers proactively analyze their respective markets for any new opportunities or threats. They design new products to serve changing customer needs or to rival any new offerings by competitors. A manufacturer’s success depends on its ability to develop a product that the market wants at the right price and quality level.

Produce Product

Optimizing production activities is an important capability for manufacturers. Raw materials and working inventories need to be managed effectively to minimize wastage and maximize the utilization of the production lines. Processes need to be refined continuously over time to remain competitive, and the quality of the materials and final products needs to be strictly managed.

Sell Product

Once the product is produced, manufacturers need to sell the products. This is done through distributors and retailers and, in some cases, directly to the end consumer. After the sale, manufacturers typically have to deliver the product, provide customer care, and manage complaints. Manufacturers also randomly test their end products to ensure they are meeting quality requirements.

After-Sale Support

Once the product is sold, manufacturers need to consider how they will handle the relationships with customers and channel(s). This includes measuring satisfaction. returns management, capturing enhancements and filtering them back into R&D, product replacement, product enhancement, invoicing, collections, and service and repairs.

1.2.1 Determine which business capabilities support value streams

1-3 hours

Deconstruct value streams into their component capabilities.

  1. Analyze the value streams to identify and describe the organization’s capabilities that support them. This stage requires a good understanding of the business and will be a critical foundation for the business capability map.
  2. Consider:
    1. What is the objective of your value stream? This can highlight which capabilities support which value streams.
    2. What are the activities that make up the business?
    3. Segmenting your value stream into individual stages will give you a better understanding of the steps involved in creating value.
  3. Avoid:
    1. Don’t do this alone. Make sure the right stakeholders participate. The exercise of identifying capabilities for an organization is very introspective and requires deep analysis. It is challenging to develop a common language that everyone will understand and be able to apply. Don’t waste your efforts building an inaccurate depiction of the business.

Download the Durable Goods Industry Business Reference Template

1.2.1 Determine which business capabilities support value streams

Input

Output

  • Value streams from previous activities
  • List of organization-specific capabilities mapped to value streams
  • Durable Goods Industry Business Reference Architecture Template

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

1.2.2 Accelerate the process with an industry reference architecture

1-3 hours

It’s never a good idea to start with a blank page.

  1. The business capability map on the previous slide can be used as an accelerator. Assemble the relevant stakeholders – business unit leads and product/service owners – and modify the business capability map to suit your organization’s context.
  2. Consider:
    1. What are the activities that make up your business?
    2. Can these activities be tied to outcomes? If not, they might not apply to your organization.
    3. Are there any capabilities on the map that don’t fit the organization? Deselect them if yes.
  3. Avoid:
    1. Don’t repeat capabilities. Capabilities are typically mutually exclusive activities.
    2. Don’t include temporary initiatives. Capabilities should be stable over time. The people, processes, and technologies that support capabilities will change continuously.

Download the Durable Goods Industry Business Reference Architecture Template

1.2.2 Accelerate the process with an industry reference architecture

Input

Output

Materials

Participants

  • Value streams from previous activities
  • Info-Tech’s industry-specific reference architecture accelerator
  • List of organizational specific capabilities mapped to value streams
  • Durable Goods Industry Business Reference Architecture Template
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

1.2.3 Validate the business capability map

1-3 hours

Crowdsource the capability map validation.

  1. Validate the capability map with the executive team (those who were not included) and other key stakeholders. Use validation of your business capability map as an excuse to start a conversation regarding the organization’s overall strategy.
  2. Consider:
    1. Are there any sensitive areas of the organization that may take this effort the wrong way? Engage them to get their input as early as possible to ensure they don’t feel left out or alienated.
  3. Avoid:
    1. Don’t delay validating the maps with top-level executives. Without their support, your architecture practice won’t be taken seriously.
    2. Don’t leave anyone out on the assumption that they won’t be interested. This process will foster alignment between organizational silos.

Input

Output

  • List of organization-specific capabilities mapped to value streams
  • Durable Goods Industry Business Reference Architecture Template
  • Level 1 business capability map
  • Durable Goods Industry Reference Architecture Template

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Reference Architecture Template

1.2.4 Establish Level 2 capability decomposition priorities

1-3 hours

Deconstruct Level 1 capabilities into their component capabilities.

  1. Analyze the Level 1 business capabilities to identify and describe at a deeper, more granular level the organization’s capabilities that support them. This stage requires a good understanding of the business and will be a critical foundation for the Level 2 business capability map.
  2. Consider:
    1. Which Level 1 capabilities enable the most critical stage of my value stream?
    2. Which Level 1 capabilities enable the most stages of the value stream?
  3. Avoid:
    1. Don’t try to cut corners. Although it may seem tempting to jump right to this step and avoid doing your Level 1 mapping, you will run the risk of model pollution. Starting with Level 1 helps ensure you have a unified view of your organization’s capabilities and will help you avoid having to redo the work later.

Download the Durable Goods Industry Business Reference Architecture Template

1.2.4 Establish Level 2 capability decomposition priorities

Input

Output

Material

Participants

  • Level 1 capabilities map and a value stream for areas of interest and focus
  • Durable Goods Industry Business Reference Architecture Template
  • Prioritized list of Level 1 business capabilities for decomposition
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

1.2.5 Decompose Level 2 capabilities

1-3 hours

Deconstruct Level 1 capabilities into their component Level 2 capabilities.

  1. Using the Level 1 capability map as a baseline, hold working sessions with the line of business represented for each (or for selected) Level 1 capability or set of related capabilities and decompose them.
  2. Consider:
    • Will you want to go deeper to Level 3? If so, then confirm if the same team for Level 2 has knowledge of Level 3+ and decompose to Level 3 concurrently.
  3. Avoid:
    • Don’t do this alone. Make sure the right stakeholders participate. The exercise of identifying Level 2+ capabilities for an organization is very introspective and requires deep analysis and understanding of business functions and processes. It is challenging to develop a common language that everyone will understand and be able to apply. Don’t waste your efforts building an inaccurate depiction of the business.

Input

Output

  • Prioritized list of Level 1 business capabilities for decomposition
  • Durable Goods Industry Business Reference Architecture Template
  • Level 2 capabilities for areas of interest and focus

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Reference Architecture Template

Level 2 capability decomposition

The image contains a screenshot of the Level 2 capability decomposition.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

Phase 2

Use Business Capabilities to Define Strategic Focus

Phase 1

Phase 2

Phase 3

Phase 4

1.1 Define the Organization's Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organization's Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

This phase will walk you through the following activities:

  • Determine cost advantage creators
  • Determine competitive advantage creators
  • Define key future-state capabilities
  • Identify the strategic objectives for the business
  • Map strategic objectives to IT programs
  • Validate the strategy map and program prioritization

This phase involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Step 2.1

Define the Organization’s Key Capabilities

Activities

2.1.1 Determine cost advantage creators

2.1.2 Determine competitive advantage creators

2.1.3 Define key future-state capabilities

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Outcomes of this step

  • Identification of Level 1 & 2 cost advantage creators
  • Identification of Level 1 & 2 competitive advantage creators
  • Defined future-state capabilities

Define the organization’s key capabilities

  • A discussion about the key or most critical capabilities is an excellent opportunity for IT leaders to review, refresh, and even reset expectations from the business as to what value IT should be providing to the organization. There is often misalignment as to whether, or to what extent, IT should be making strategic investments to help the business enhance its capabilities through technology. Some IT leaders believe they should be transforming the organization while their CEO wants them to focus on operational efficiencies.
  • Depending on the mandate from the business, an IT leader may focus on developing a cost advantage for the organization by directing technology efforts to capabilities that deliver efficiency gains. This is often the case for many IT leaders for whom the primary role for IT is to enable the business to deliver its products/services to the end consumer at the lowest cost possible. These capabilities are known as Cost Advantage Creators.
  • Organizations can develop a competitive advantage over their industry counterparts by creating a differentiated experience for the organization’s customers. Increasingly, this is facilitated and made possible through technology. IT can direct investment into capabilities that will improve their organization’s competitive position in its market by delivering unique or enhanced experiences for the organization’s end customers. IT can focus on developing a competitive advantage by directing efforts onto capabilities that are end-customer facing. These are known as the organization’s Competitive Advantage Creators.
The image contains a screenshot of an example of defining the organization's key capabilities.

Defining key capabilities for Durable Goods

The image contains a screenshot example of the template on Defining key capabilities for Durable Goods.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

2.1.1 Determine cost advantage creators

1-3 hours

Focus on capabilities that drive a cost advantage for your organization.

  1. If your organization has a cost advantage over competitors, the capabilities that enable it should be identified and prioritized. Highlight these capabilities and prioritize the programs that support them.
  2. Consider:
    1. What is the source of your cost advantage? IT should support the capabilities that drive the cost advantage.
    2. Is the industry you operate in sensitive to prices?
  3. Avoid:
    1. Don’t focus on capabilities that create an unsustainable cost advantage. Take a long-term perspective and allocate your resources wisely.

Input

Output

  • Value stream, Level 1, and Level 2 capabilities from previous activities
  • Durable Goods Industry Business Reference Architecture Template
  • Identified cost advantage creating capabilities

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

2.1.2 Determine competitive advantage creators

1-3 hours

Prioritize capabilities that give your organization an edge over rivals.

  1. If your organization does not have a cost advantage over competitors, determine if it can deliver differentiated end-customer experiences. Once you have identified the competitive advantages, understand which capabilities enable them. These capabilities are critical to the success of the organization and should be highly supported.
  2. Consider:
    1. Are there any products or services your organization provides that customers consider superior to competitive offerings?
    2. Which capabilities enable the competitive advantage?
    3. How easy is it for competitors to neutralize your competitive advantage? Focus on the capabilities that are difficult to replicate by competitors to create a more sustainable advantage.
  3. Avoid:
    1. Don’t determine the competitive advantages alone. Incorporate various perspectives from throughout the organization to truly understand how the organization competes in the marketplace.

Download the Durable Goods Industry Business Reference Architecture Template

2.1.2 Determine competitive advantage creators

Input

Output

Materials

Participants

  • Value stream, Level 1, and Level 2 capabilities from previous activities
  • Cost advantage creators from previous activity
  • Durable Goods Industry Business Reference Architecture Template
  • Identified competitive advantage–creating capabilities
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

2.1.3 Define key future-state capabilities

1-3 hours

Know where you want to go and chart a course to get there.

  1. In addition to the current cost and competitive advantage creators, the organization may have the intention to enhance existing or develop new capabilities. Discuss and select the capabilities that will help drive the attainment of future goals.
  2. Consider:
    1. Are your competitors doing anything to give them a competitive advantage? Can your organization easily replicate the capabilities needed to neutralize that advantage?
    2. How is the external environment (political, economic, social, or technological) likely going to change in the future? How might these changes impact your current key capabilities?
  3. Avoid:
    1. Don’t blindly copy your competitors’ strategies. It is important to understand that each organization is unique; before focusing on key capabilities that might neutralize your competitors’ advantages, ensure they fit well with your overall strategy.

Input

Output

  • Value stream, Level 1, and Level 2 capabilities from previous activities
  • Cost advantage creators from previous activity
  • Competitive advantage creators from previous activity
  • Durable Goods Industry Business Reference Architecture Template
  • Identified enhancements to existing or new organizational capabilities

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

Step 2.2

Develop a Strategy Map

Activities

2.2.1 Identify the strategic objectives for the business

2.2.2 Map strategic objectives to IT programs

2.2.3 Validate the strategy map and program prioritization

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Portfolio Manager (PMO Director)
  • Department Executive and Senior Managers

Outcomes of this step

  • Identification of business strategic objectives
  • Defined and validated strategy map/goal cascade

2.2 Develop a strategy map

  • A strategy map is a tool to help narrow the focus onto what matters most. With ever-changing resources, business strategies, and external environments, the strategy map can ensure IT is consistently providing value through the enhanced prioritization of IT programs.
  • Strategy mapping is a technique that helps the executive suite communicate the business strategy to other levels of the organization by visually representing the organizational strategic objectives and mapping each of them to value streams, business capabilities, and ultimately, to specific IT programs. There are five layers to a strategy map: strategic business goals, business initiatives, value streams, business capabilities, and IT programs.
  • Strategic business goals are the targets and outcomes that the organization is looking to achieve.
  • Value streams enable an organization to create and capture value in the market through interconnected activities that support strategic objectives.
  • Business capabilities define what a business does to enable value creation in value streams, rather than how.
  • IT programs are actionable descriptions of how the IT department will enable one or multiple business capabilities in its target state.
The image contains a screenshot of a strategy map.
Figure above: Strategy Map

2.2.1 Identify the strategic goals and outcomes for the business

1-3 hours

Knowing the key strategic objectives for the business will drive business-IT alignment.

  1. It is important to make sure the right strategic objectives of the organization have been identified and are well understood. Engage the right stakeholders to help identify and document the key strategic objectives for the business.
  2. Consider:
    1. What are your targets for the organization?
    2. What are the organization’s strategic investment goals?
    3. What are the goals of the organization over the next 12 months?
    4. What are your top business initiatives over the next 12 months?
    5. Are there external forces that will impact the current strategic objectives?
  3. Avoid:
    1. Don’t simply go with the existing documented strategic objectives for the business. Ensure they are up to date and interview the decision-makers to get the most updated objectives if needed.

Download the Durable Goods Industry Business Reference Architecture Template

2.2.1 Identify the strategic goals & outcomes for the business

Input

Output

Materials

Participants

  • Business strategy
  • Executive stakeholder interviews
  • IT project portfolio
  • Business goals
  • Business context information
  • Whiteboard/Flip Charts
  • Durable Goods Industry Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Portfolio Manager (PMO Director)
  • Department Executive and Senior Managers

Illustrative example of strategic goals and outcomes for Durable Goods

The image contains a screenshot of part of the example illustration. The illustration includes a half circle that has three coloured dots on top of it spread out. In the middle of the half circle the word Acme Corp. is.
The image contains a screenshot to connect with the illustration. This screenshot is of a rounded edge rectangle in the colour blue, labelled Innovation.

We are committed to maximizing shareholder value by developing ground-breaking products that achieve a 10% increase in year-over-year sales.

The image contains a screenshot to connect with the illustration. This screenshot is of a rounded edge rectangle in the colour green, labelled Customer Service.

Our organization strives to maintain our industry-leading customer satisfaction ratings by delighting our customers. Loyalty, responsiveness, and quality are our top priorities.

The image contains a screenshot to connect with the illustration. This screenshot is of a rounded edge rectangle in the colour yellow, labelled Operational Excellence.

We will demonstrate operational efficiency by delivering on time in full and with zero defects, including live status updates throughout the product lifecycle.

2.2.2 Map strategic objectives to IT programs

1-3 hours

Communicate the business strategy to other levels of the organization visually.

  1. Starting with strategic objectives, map the value streams that will ultimately drive them. Next, link the key capabilities that enable each value stream. Finally, map the IT programs supporting those capabilities. This process will help you prioritize IT programs that deliver the most value to the organization.
  2. Consider:
    1. Focus on the value streams that truly drive the strategic objectives.
    2. Are there any capabilities that are not tied to outcomes?
    3. Are all strategic objectives supported with IT programs?
  3. Avoid:
    1. Don’t be too granular. The audience for a strategy is interested in a higher-level understanding of what IT is doing. As such, keep things at the program level as opposed to the individual projects that programs are composed of.

Input

Output

  • List of IT projects, initiatives, and capabilities
  • Business goals
  • IT initiatives
  • Goals cascade

Materials

Participants

  • Whiteboard/flip charts
  • Capability maps
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Portfolio Manager (PMO Director)
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

Illustrative example of strategy map

The image contains a screenshot of a strategy map.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

2.2.3 Validate the strategy map and program prioritization

1-3 hours

Crowdsource the strategy map validation.

  1. Validate the strategy map in layers. Start with IT and confirm which IT programs enable particular capabilities. Next, work with the business departments to validate the capabilities that support the value streams. Finally, validate the strategic objectives of the organization with the C-suite and communicate the value streams that support them.
  2. Consider:
    1. Are all strategic objectives equally important? If not, get a prioritized list of strategic objectives.
    2. Do any of the programs have critical dependencies that influence sequencing?
    3. If there are strategic objectives that do not have any IT programs mapped to them, consider adding new programs. Conversely, reconsider upcoming programs that do not have a connection to strategic objectives.
  3. Avoid:
    • Don’t delay validating the strategic maps with top-level executives. A proactive approach will save you time in terms of rework and maximize alignment.
    • Don’t leave anyone out on the assumption that they won’t be interested. It is easy to miss key stakeholders – be careful and organized.

Download the Durable Goods Industry Business Reference Architecture Template

2.2.3 Validate the strategy map and program prioritization

Input

Output

Materials

Participants

  • IT initiatives
  • Goals cascade
  • Validated strategy map and goals cascade
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Portfolio Manager (PMO Director)
  • Department Executive and Senior Managers

Phase 3

Assess Key Capabilities for Planning priorities

Phase 1

Phase 2

Phase 3

Phase 4

1.1 Define the Organization's Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organization's Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

This phase will walk you through the following activities:

  • Assess process support for capabilities
  • Evaluate user adoption of processes for key capabilities
  • Prioritize key capabilities process refinement
  • Assess how well information supports capabilities
  • Evaluate accessibility to data for key capabilities
  • Prioritize data improvements for key capabilities
  • Assess technology support of capabilities
  • Uncover value opportunities for applications
  • Compare results with industry research to determine plan of action

This phase involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Step 3.1

Business Process Review

Activities

3.1.1 Assess process support for capabilities

3.1.2 Evaluate user adoption of processes for key capabilities

3.1.3 Prioritize process refinement for key capabilities

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Outcomes of this step

  • Identification of capability process enablement

Business process review

Use process analysis and assessment to drive collaboration and integration.

  • Organizations undergoing growth, either organically or through mergers and acquisitions, tend to develop in a piecemeal and short-sighted fashion in an attempt to preserve their view of agility. This can lead to the following pains:
    • Duplicated or conflicting business activities.
    • Processes that create bottlenecks by involving too many business units.
    • Manual rekeying of data into multiple systems.
    • Inefficient process for producing standard reports.
  • These organizations are driven by the desire to effectively manage existing business processes while recognizing the need for a faster ability to share data, information, and insight across multiple systems and business units to support increasing demands for more rapid response.
  • A primary goal of a strategy is to provide a framework that enables the current business environment to function as seamlessly as possible, allowing for flexibility when processes need to evolve.
  • Through effective strategy design, IT can provide integration across business units by performing an analysis of how well the organizational capabilities are supported by processes. Specifically, IT should analyze and assess processes on the basis of adherence, enforcement, and overlap and on the presence of effective monitoring measures.
The image contains a screenshot of Process Assessment legend. The legend includes: none, low, medium, and high.

Figure above: Process Assessment Legend

Business process support of key capabilities

The image contains a screenshot of the business process support of key capabilities.

The image contains a screenshot of Process Assessment legend. The legend includes: none, low, medium, and high.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

3.1.1 Assess process support for capabilities

1-3 hours

Standardization breeds efficiency.

  1. Begin by assessing whether each key capability has documented processes supporting it. Then evaluate whether the documented processes have been communicated and the extent to which there is process overlap.
  2. Consider:
    1. What processes are documented?
    2. Have the documented processes been communicated to the business users?
    3. Are some of the processes redundant? Has that been done on purpose, or can you optimize them?
    4. Are there key capabilities that lack processes all together?
  3. Avoid:
    1. Don’t waste time. Only evaluate processes that are documented and communicated, and then evaluate them for exclusivity.
    2. Don’t do this in a vacuum. Validate that you have captured all existing processes by speaking to other employees.

Input

Output

  • Durable Goods Industry Business Reference Architecture Template
  • Standard operating procedures
  • Capability maps
  • Heat-mapped capability map

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

3.1.2 Evaluate user adoption of processes for key capabilities

1-3 hours

Having processes is one thing, but are they being adhered to?

  1. The next level of analysis involves assessing whether defined processes are being adhered to. Confirm that the organization enforces adherence and that regular monitoring for deviations is occurring.
  2. Consider:
    1. Is there regular monitoring for deviations from the defined process? Is this recorded and acted upon?
    2. Are there certain groups of users that are not following the processes in place? Why?
  3. Avoid:
    1. Don’t think the lack of process adherence is simply the employees’ fault. In some cases, the processes might not be well designed or might be outdated, thus needing refinement.

Download the Durable Goods Industry Business Architecture Reference Template

3.1.2 Evaluate user adoption of processes for key capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Standard operating procedures
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

3.1.3 Prioritize process refinement for key capabilities

1-3 hours

  1. Key capabilities should be well supported by processes. If there are any capabilities that scored Medium or below, prioritize delivering effective process support, improving user adoption, and establishing effective process governance.
  2. Consider:
    1. Is business process management in your mandated area of influence, responsibility, or accountability? If not, consider who you may need to recruit for support from the business side to drive refinements.
    2. Communicate any new processes or changes to existing ones through a variety of mediums. Make it easy for the users/employees to reference them if needed.
  3. Avoid:
    1. Don’t create redundant processes. Ensure there is minimal overlap with existing processes if you are creating a new process.
    2. Don’t forget to think about user adoption and governance when creating new processes. This might be more challenging, but it will ultimately ensure long-term success.

Download the Durable Goods Industry Business Reference Architecture Template

3.1.3 Prioritize process refinement for key capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Standard operating procedures
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Step 3.2

Information Assessment

Activities

3.2.1 Assess how well information supports capabilities

3.2.2 Evaluate accessibility to data for key capabilities

3.2.3 Prioritize data improvements for key capabilities

This step involves the following participants:

  • Enterprise/Business Architect
  • Data Architect
  • Organizational Planning & Analysis Staff
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Outcomes of this step

  • Identification of capability data support

The Data, Reporting & Analytics diagnostic helps identify information gaps

Assessing how well information supports capabilities is nearly impossible without an honest and thorough understanding of end-user sentiment toward data, reporting, and analytics.

Develop data-driven insights to help you decide which business capabilities require new or improved reporting and analytics and which opportunities will improve business processes and, by extension, enable the capabilities of the business.

The Data, Reporting & Analytics program will help you:

  • Assess data quality and reporting satisfaction at a glance.
  • Evaluate data quality across nine dimensions of quality.
  • Evaluate reporting across ten dimensions of satisfaction.
  • Determine which areas are the most critical.
  • Determine effectiveness of analytics tools.
The image contains a screenshot of the Data Quality Scorecard and the Report Scorecard.

Here are some critical insights to extract from the Data, Reporting & Analytics diagnostic report

Begin with understanding the perception of the information in use in your organization to assess how effective it is at supporting key business capabilities.

Data and reports that are deemed to have low accuracy, currency, or completeness could hamper strategic business capabilities and should be investigated further regarding their effectiveness at supporting key business capabilities.

The image contains a screenshot of the Data, Reporting & Analytics diagnostic report.

Information assessment

Assess the availability and quality of data in providing information as a business asset.

  • Information is central to every organization’s success and ability to realize its goals. Too often organizations experience the following pains: Duplicated or conflicting data residing in disparate databases. Inadequate controls or edits on data. Manual rekeying of data into multiple systems. Inability to provide executives with reliable and easily accessible information for decision making. Inability of business units to assume “ownership” of data.
  • These organizations are driven by the desire to effectively manage existing business processes while recognizing the need for a faster ability to share data, information, and insight across multiple systems and business units to support increasing demands for more rapid response.
  • A primary goal of a strategy is to provide a framework that enables information to be viewed as a critical business asset, across organizational boundaries, and accessed as seamlessly as possible.
  • Through effective strategy design, IT can provide integration of data across business units by performing an analysis of how well the organizational capabilities are supported by information. Specifically, IT should analyze and assess data on the basis of quality, integrity, and ownership and on the presence of an effective data governance framework.
The image contains a screenshot of the Information Assessment Legend. The legend includes: None, Low, Medium, and High.

Figure above: Information Assessment Legend

Information support of key capabilities

The image contains a screenshot of Information support of key capabilities.

The image contains a screenshot of the Information Assessment Legend. The legend includes: None, Low, Medium, and High.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

3.2.1 Assess how well information supports capabilities

1-3 hours

Information is a key business asset.

  1. Begin by assessing whether each key capability has data available to support it. Then evaluate the quality and integrity of the data and the extent to which there is clear business unit ownership of the data.
  2. Consider:
    1. What data exists to support the capability?
    2. Does the same data exist in various databases?
    3. What controls exist to ensure quality and integrity?
    4. Are there key capabilities that lack automated information altogether?
  3. Avoid:
    1. Don’t waste time. Only evaluate information holdings that are central to the capability.
    2. Don’t do this in a vacuum. Validate that you have captured all existing data by collaborating with other IT and business unit employees.

Download the Durable Goods Industry Business Reference Architecture Template

3.2.1 Assess how well information supports capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Data dictionary
  • Key reports
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Data Architect
  • Organizational Planning & Analysis Staff
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

3.2.2 Evaluate accessibility to data for key capabilities

1-3 hours

Having data is one thing, but is it easily accessible and available in a format suitable for decision making?

  1. The next level of analysis involves assessing whether data is easily accessible to the main users of the information.
  2. Consider:
    1. Is data well integrated so executives do not have to access more than one source for the information they need? Is there a data warehouse capability to bring together data from disparate databases?
    2. Is there an end-user business intelligence (BI) capability? Are users sufficiently trained in its use?
  3. Avoid:
    1. Don’t think that the lack of information is the fault of any one IT unit or application. In most cases, a lack of a comprehensive approach to enterprise and data architecture is at the core of the problem.

Download the Durable Goods Industry Business Reference Architecture Template

3.2.1 Assess how well information supports capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Data dictionary
  • Key reports
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Data Architect
  • Organizational Planning & Analysis Staff
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

3.2.2 Evaluate accessibility to data for key capabilities

1-3 hours

Having data is one thing, but is it easily accessible and available in a format suitable for decision making?

  1. The next level of analysis involves assessing whether data is easily accessible to the main users of the information.
  2. Consider:
    1. Is data well integrated so executives do not have to access more than one source for the information they need? Is there a data warehouse capability to bring together data from disparate databases?
    2. Is there an end-user business intelligence (BI) capability? Are users sufficiently trained in its use?
  3. Avoid:
    1. Don’t think that the lack of information is the fault of any one IT unit or application. In most cases, a lack of a comprehensive approach to enterprise and data architecture is at the core of the problem.

Download the Durable Goods Industry Business Reference Architecture Template

3.2.2 Evaluate accessibility to data for key capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Data dictionary
  • Key reports
  • Listing of key systems of record/transactional data source system inventory
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Data Architect
  • Organizational Planning & Analysis Staff
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

3.2.3 Prioritize data improvements for key capabilities

1-3 hours

Use data to institute information as an asset.

  1. Key capabilities should be well supported by data. If there are any capabilities that scored Level 2 or below, prioritize establishing an effective data governance framework. Leverage Info-Tech’s blueprint Build a Data Architecture Roadmap for more information.
  2. Consider:
    1. Is data management fully in your mandated area of influence, responsibility, or accountability? If not, consider who you may need to recruit for support from the business side to drive refinements.
    2. Effective data governance will require close collaboration between IT and the data owners on the business side.
  3. Avoid:
    1. Don’t create redundant data. Ensure there is minimal overlap with existing data elements if you are creating a new application or database process.
    2. Don’t forget to think about end-user access and reporting tools when creating new data holdings. This might be more challenging, but it will ultimately ensure long-term success.

Download the Durable Goods Industry Business Reference Architecture Template

3.2.3 Prioritize data improvements for key capabilities

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Standard operating procedures
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Data Architect
  • Organizational Planning & Analysis Staff
  • Business Analysts
  • Business Unit Leads
  • CIO
  • Department Executive and Senior Managers

Step 3.3

Technology Opportunity Assessment

Activities

3.3.1 Assess technology support of capabilities

3.3.2 Uncover value opportunities for applications

This step involves the following participants:

  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Department Executive and Senior Managers

Outcomes of this step

  • Identification of capability application and technology support

The Application Portfolio Assessment diagnostic helps identify application gaps

Application portfolio management is nearly impossible to perform without an honest and thorough understanding of end-user sentiment toward IT software.

Develop data-driven insights to help you decide which applications to retire, upgrade, retrain on, or maintain to meet the demands and, by extension, enable the capabilities of the business.

The Application Portfolio Assessment program will help you:

  • Assess the health of the application portfolio.
  • Understand the business’ perception of the applications in use throughout your business.
  • Identify and build core IT processes that automate IT-business alignment.
  • Create a plan to address alignment gaps impeding business growth.
  • Deliver your plan to demonstrate IT value and progress.
The image contains a screenshot of the End-User Satisfaction Diagnostic Program.

Here are some critical insights to extract from the Application Portfolio Assessment report

Begin with understanding the perception of the applications in use in your organization to assess how effectively they support key business capabilities.

Applications that are deemed as unleveraged, questionable, or contentious should be investigated further regarding their effectiveness at supporting key business capabilities.

The image contains a screenshot of the Application Portfolio Assessment report.

Technology opportunity assessment

New technologies can create opportunities for business agility and help develop resilience to changing market conditions.

  • Business agility is essential to stay competitive. However, the application portfolio of many organizations cannot sufficiently support the flexibility and efficiency the business needs because of legacy challenges.
  • Organizations experience application sprawl over time, caused by many factors, that can end up costing more for licenses, operational resources, and maintenance.
  • Organizations are looking for ways to modernize their applications, but they want to develop options without introducing additional risks. Adopting a capability-based approach to assessing applications will enable the IT department to identify opportunities to:
    • Automate tasks through the strategic selection and implementation of applications.
    • Integrate applications that have cross-capability implications.
    • Rationalize the application portfolio.
    • Eliminate redundant or legacy applications that don’t deliver enough value.
  • The market availability for software applications dedicated to supporting a specific capability (or set of capabilities) can serve as an indicator of the presence of legacy challenges. Where there is a lack of application availability, it may be a signal of either custom-developed, ad hoc, or makeshift solutions or shadow IT.
The image contains a screenshot of the Technology Opportunity Assessment Legend.

Figure above: Technology Opportunity Assessment Legend

3.3.1 Assess technology support of capabilities

1-3 hours

Determine how well key capabilities are supported by applications.

  1. Perform an application rationalization exercise on the key capabilities to determine how well they are being supported by applications. Applications should be assessed on the basis of flexibility, ease of use, and integration.
  2. Consider:
    1. How flexible are the applications?
    2. How well do the applications integrate?
    3. How easy are the applications to learn and use?
    4. Are there overlap, unplanned redundancy, or data quality issues?
  3. Avoid:
    1. Don’t perform a complete overhaul. Consider continuity in delivering business services before you rip and replace everything.
    2. Don’t forget about shadow IT. Ask around to get an accurate understanding of what applications are being used to support business capabilities.

Input

Output

  • Durable Goods Industry Business Reference Architecture Template
  • Listing of key systems of record/transactional system inventory
  • Capability maps
  • Heat-mapped capability map

Materials

Participants

  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Department Executive and Senior Managers

Download the Durable Goods Industry Business Reference Architecture Template

Application support of key capabilities

The image contains a screenshot of the Application Support of key capabilities.

The image contains a screenshot of the Technology Opportunity Assessment Legend.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

3.3.2 Uncover value opportunities for applications

1-3 hours

Make sure the business is leveraging applications wherever it should.

  1. Unsupported key capabilities are areas in which IT can deliver high value for the business. The key capabilities that score None or Low in the technology assessment are the ones that require the most attention.
  2. Consider:
    1. Prioritize which unsupported key capabilities to focus on based on their importance.
  3. Avoid:
    1. Don’t focus on unsupported key capabilities that will require too much investment.
    2. Don’t build an application just because you can. Research existing solutions before deciding to build in-house.

Download the Durable Goods Industry Business Reference Architecture Template

3.3.2 Uncover value opportunities for applications

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Listing of key systems of record/transactional system inventory
  • Capability maps
  • Heat-mapped capability map
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Enterprise/Business Architect
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Department Executive and Senior Managers

Phase 4

Adopt Capability-Based Strategy Planning

Phase 1

Phase 2

Phase 3

Phase 4

1.1 Define the Organization's Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organization's Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

This phase will walk you through the following activities:

  • Assess capability gaps via a MoSCoW analysis

This phase involves the following participants:

  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Department Executive and Senior Managers
  • Portfolio Manager (PMO Director

Step 4.1

Consolidate and Prioritize Capability Gaps

Activities

4.1.1 Assess capability gaps via a MoSCoW analysis

This step involves the following participants:

  • Enterprise/Business Architect
  • Project Managers & Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, and VP Infrastructure
  • Department Executive and Senior Managers

Outcomes of this step

  • Prioritization of key capability gaps

Consolidate and prioritize capability gaps

  • Direct strategic IT investments based on the collective output of the capability assessments.
  • When combined with a solid understanding of business priorities and IT’s mandate, a capability assessment can be the driving force that informs a unified perspective on the sequencing of an organization’s strategic IT initiatives.
  • Assessments based on how well a capability is supported by people (via organizational analysis), process (via process review), data (via information assessment), and technology (via application, infrastructure, data, and security improvements) will inform the overall health of a capability, or in other words, the size of a capability gap. This information, when contrasted with the concept of a MoSCoW-based effort to value analysis, forms an enhanced decision-making framework that can be used to determine initiative sequencing on a strategic roadmap.
  • If a capability has a large gap (is poorly supported by people, process, data, or technology), it should be considered as high effort, or difficulty, to address. When the capability is well aligned with business priorities and the IT mandate, the capability gap should be considered as high value to address.
  • See the figure on the right: IT leaders should focus their efforts on the lower-right quadrant (high value, low effort). In the top-right quadrant (high value, high effort), IT should seek business support to drive the initiative. Capability gaps on the right side of the quadrant overall are good candidates for capability outsourcing.
The image contains the a screenshot of the figure mentioned in the text above to demonstrate the MoSCoW Analysis for Business Capabilities.

Figure above: MoSCoW Analysis for Business Capabilities

MoSCoW capability gap analysis

The image contains a screenshot of the MoSCoW capability gap analysis. We are looking to act on low effort, high value.

4.1.1 Assess capability gaps via a MoSCoW analysis

1-3 hours

Elevate your focus from the IT level to the organization level.

  1. Gather and synthesize the priorities from the information, people, process, and technology assessments to develop a consolidated view of IT’s planning responsibilities.
  2. Consider:
    1. How big is the difference between current needs and the assessment of the factors that support each capability?
    2. Are there any groups of capabilities that have low scores from the assessments? Consider a root-cause analysis to determine what could be impacting multiple capabilities.
  3. Avoid:
    1. Don’t forget about healthy capabilities. Enhance the green (low-gap) capabilities once you have resolved the issues with the red and yellow (large-gap) key capabilities.

Download the Durable Goods Industry Business Reference Architecture Template

4.1.1 Assess capability gaps via a MoSCoW analysis

Input

Output

Materials

Participants

  • Durable Goods Industry Business Reference Architecture Template
  • Capability maps
  • Shortlisted assessment of capability gaps via 2x2 matric
  • Whiteboard/flip charts
  • Durable Goods Industry Business Reference Architecture Template
  • Business Analysts
  • Business Unit Leads
  • CIO
  • CTO, VP Applications, VP Infrastructure
  • Department Executive and Senior Managers
  • Portfolio Manager (PMO Director)

MoSCoW analysis for business capabilities

The image contains a screenshot of the MoSCoW analysis for business capabilities graph.

Note: Illustrative example. To edit and customize this visual, download the corresponding template.

Ranked list of IT implications template

The image contains a screenshot of the Ranked list of IT implications template.

Address key capability gaps

The image contains a circle that is labelled Enterprise Architecture.

Document Your Business Architecture

The image contains a screenshot of an image that has three coloured text boxes that are labelled: EA Strategy, Data Models, EA Governance.
The image contains a screenshot of a circle that is labelled: Business Context & IT Strategy.

Document Business Goals and Capabilities for Your IT Strategy

The image contains a screenshot of an image that has three coloured text boxes that are labelled: IT Strategy, Digital Strategy, IT Budget.
The image contains a screenshot of a circle that is labelled: Applications Strategy.

Review Your Application Strategy

The image contains a screenshot of an image that has three coloured text boxes that are labelled: Data Quality, App Dev Throughput, ERP Selection.
The image contains a screenshot of a circle that is labelled: Infrastructure & Operations Strategy.

Build Your Infrastructure Roadmap

The image contains a screenshot of an image that has three coloured text boxes that are labelled: Change Mgmt., Asset Mgmt., Cloud Strategy.

As part of your next steps checklist, leverage the reference architecture for priorities that drive measurable top-line organizational outcomes and the unlocking of direct value.

Summary of Accomplishment

Problem Solved

  • Accelerated the building of your organization’s capability map by defining the organization’s value stream and validating the industry reference architecture.
  • Used business capabilities to define strategic focus by defining the organization’s key capabilities and developing a prioritized strategy map.
  • Assessed key capabilities for planning priorities through a review of business processes, information, and application and technology support of key capabilities.
  • Consolidated and prioritized capability gaps for incorporation into priorities.

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

Contact your account representative for more information.

workshops@infotech.com

1-888-670-8889

Additional Support

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

The image contains a picture of Kevin Tucker.

Contact your account representative for more information.

workshops@infotech.com

1-888-670-8889

The following are sample activities that will be conducted by Info-Tech analysts with your team:

The image contains a screenshot of Model Level 1, 2, & 3 business capability maps.

Model Level 1, 2 & 3 business capability maps.

Using the business capability map as an accelerator, Info-Tech analysts will work with relevant stakeholders to modify and validate the business capability map to suit your organization’s context.

The image contains a screenshot of the capability assessment map.

Review capability assessment map(s).

Info-Tech analysts will work with relevant stakeholders to review the various capability assessment maps and identify value opportunities within your organization.

Bibliography

A Guide to the Business Architecture Body of Knowledge®, V5.5 (BIZBOK® Guide), 2017. Business Architecture Guild. Web.

"2017 Global Aerospace and Defense Industry Outlook." Deloitte United States. 19 June 2017. Accessed 16 Aug. 2017.

"Alicia Boler-Davis Remarks to J.D. Power Roundtable at NADA Convention." General Motors, 24 Jan. 2014. Accessed 15 Aug. 2017.

“Define the Business Context Needed to Complete Strategic IT Initiatives.” Business Wire, 1 February 2018. Web.

Gunn, Matt. "Nike's 4 Game-Changing Moves in Supply Chain." GT Nexus. 2 Nov. 2016. Accessed 2 Aug. 2017.

Iera, Danielle. "Six Challenges Facing Modern Manufacturing Companies." Manufacturing.net, 17 Dec. 2015. Accessed 16 Aug. 2017.

"Nike's 4 Game-Changing Moves in Supply Chain." Infor, 15 Dec. 2016. Accessed. 2 Aug. 2017.

Khurana, Anil. "Delivering the Sustainable Development Goals - seizing the opportunity in global manufacturing." United Nations Industrial Development Organization, 2017. Accessed 14 Aug. 2017.

Mullen, Michael. "Kraft Heinz Reports Second Quarter 2017 Results." Kraft Heinz Company, 3 Aug. 2017. Accessed 15 Aug. 2017.

“2016 Annual Report and Notice of Annual Meeting.” Nike, 15 July 2016. Accessed 15 Aug 2017.

Pedersen, Michael, and Alice Born. "North American Industry Classification System (NAICS) Canada 2017 Version 1.0." Government of Canada, Statistics Canada, 18 July 2017. Accessed 14 Aug. 2017.

Potts, Rachel. "Caterpillar Reports Second-Quarter 2017 Results." Caterpillar, 25 July 2017. Accessed 15 Aug. 2017.

Richardson, Amy. "6 Critical Issues Manufacturers Will Face in 2016." Flow Control Network, 13 Oct. 2015. Accessed 16 Aug. 2017.

The Business Architecture Guild. BIZBOK® Guide, 2021. Web.

"The global manufacturing sector: current issues - CIMA." CIMA Global, n.d. Accessed 16 Aug. 2017.

TOGAF Version 9.1. The Open Group, 2 February 2009. Web.

"U.S. Industrial Outlook: Manufacturing Still Recovering." MAPI Foundation, n.d. Accessed 16 Aug. 2017.

White, Glen. "6 challenges facing the global manufacturing sector in 2015." Manufacturing Global, 26 April 2017. Accessed 16 Aug. 2017.

Ulrich, William, and Neal McWhorter. "Business Architecture Scenarios, Version 3.0." Business Architecture Special Interest Group (BAWG). Object Management Group (OMG), 10 Aug. 2010. Web.

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Capability maps, value streams, and strategy maps for durable goods manufacturers.

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Guided Implementation #1 - Model
  • Call #1 - Introduce Info-Tech’s industry reference architecture methodology.
  • Call #2 - Define and create value streams.
  • Call #3 - Model Level 1 business capability maps.
  • Call #4 - Map value streams to business capabilities.
  • Call #5 - Model Level 2 business capability maps.

Guided Implementation #2 - Drive
  • Call #1 - Introduce Info-Tech's capability assessment framework.
  • Call #2 - Review capability assessment map(s).
  • Call #3 - Discuss and review prioritization of key capability gaps and plan next steps.

Author

Kevin Tucker

Search Code: 99342
Last Revised: August 16, 2022

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