Aligning Business Architecture with Business Design

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Aligning Business Architecture with Business Design Steve DuPont, Associate Technical

Global Boeing Customers and customer support in 150 countries Total

8 billion 70 percent of commercial airplane revenue historically

technology partnerships with companies around the world Contracts

technology-development centers and programs in multiple countries

2 Global Boeing Customers and customer support in 150 countries Total revenue in 2014: $90.8 billion 70 percent of commercial airplane revenue historically from customers outside the United States Manufacturing, service, and technology partnerships with companies around the world Contracts with 21,500 suppliers and partners globally Research, design, and technology-development centers and programs in multiple countries More than 165,000 Boeing employees in more than 65 countries Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 1

Copyright Copyright 2015 Boeing. 2015 All Boeing.

4 Agenda Overview What is Business Design? Application to Business Architecture Key Model Views and Related Mappings Establishing a Design-Oriented Business Architecture Practice Looking Ahead Summary Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 3

5 What is Business Design? Business design is a human-centered approach to creative problem solving. It applies design methods and mindsets to business challenges. Business design can be effectively used to Help better understand customers Create new experiences and Design innovative business strategies and models University of Toronto, Rotman School of Management* Design thinking is fundamental to business design * About Business Design. Rotman DesignWorks. Rotman School of Management Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 4

6 Design Thinking Design Thinking is a discipline that uses a designer s sensibility and methods to match people s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity. Tim Brown, IDEO * Design Thinking Empathetic Integrative Optimistic Experimental Collaborative Can be applied to Strategy Products & Services Business Architecture Solution Development * Tim Brown. Design Thinking, Harvard Business Review. June Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 5

Design Thinking for Business Architects Empathetic Outside-in customer/stakeholder perspective Observe users to identify hidden needs Integrative Think holistically Design for integration Optimistic

7 Design Thinking for Business Architects Empathetic Outside-in customer/stakeholder perspective Observe users to identify hidden needs Integrative Think holistically Design for integration Optimistic Ask what s possible? Embrace risk, uncertainty, and constraints Experimental Iterative design/build (build to think) Validate, learn and adjust Collaborative Co-creation Open process (everyone can participate) Ferguson, Bob. Our Boeing. Boeing Frontiers. Boeing.com/frontiers. Jan Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 6

Visualization is Important Key roles Graphic recording Graphic facilitation Envisioning Holistic innovation Key competencies Empathetic listening Real time sketch

8 Visualization is Important Key roles Graphic recording Graphic facilitation Envisioning Holistic innovation Key competencies Empathetic listening Real time sketch Production art Domain knowledge Design thinking / systems thinking Michael Erickson, The Boeing Company 2015 Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 7

9 Business Architecture with Design Focus Design Phases Initial Discussions Building Architecture Business Architecture Vision, goals External influencers Information Gathering Conceptual Design/Feasibility Design Development 1 1 Market analysis As-Is business design/ architecture Customer experience design Business model innovation Operating model design Business architecture blueprints Source: Steve DuPont et al. Business Architecture and Business Models Business 1 A Guide to the Business Architecture Body of Architecture Innovation Workshop. Object Management Group & Business Architecture Guild. Knowledge (BIZBOK ) Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 8

Conceptual Design Artifacts and Business Architecture Blueprints Conceptual Design Artifacts Business Models and Operating Model Sketches embodied in

10 Conceptual Design Artifacts and Business Architecture Blueprints Conceptual Design Artifacts Business Models and Operating Model Sketches embodied in Detail Architecture Blueprints Capability Map Organization Map Information Map Value Map Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/2015 9

Business & Initiative Planning Target market entry Architecture & Development Scale and Deploy

11 Strategy to Execution (Traditional) Driven by annual cycles Siloed processes Non-integrated initiatives Waterfall methods Heavy decision gates Strategic Planning Product Development Business & Initiative Planning Target market entry Architecture & Development Scale and Deploy Business Model Lifecycle (shrinking) Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

12 Innovation Required We don t have a traditional strategy process, planning process like you d find in traditional technical companies. It allows Google to innovate very, very quickly Eric Schmidt, Google Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

13 Another Way (Designed Focused) Customer Experience Design Product & Service Innovation Business Model Innovation & Strategy Business Architecture Design & Planning Solution Development Learn Design/ Build Test Activity cycles based on Lean Startup* principle #5: Build, Measure, Learn ( Iterative learning processes with dynamic feedback loops Responsive to change Design-oriented Collaborative Adaptable, flexible Deploy & Scale Business architecture is performed early to support strategy development & integrated planning Target market entry Business Model Lifecycle (shrinking) Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

sustainable competitive advantage Business model frameworks include: Business Model Canvas, Alexander Osterwalder et al.

14 Business Model Innovation Business Model Innovation & Strategy Business model innovation is a design-oriented approach to strategic planning whereby new opportunities and ways to create, deliver, and capture value are explored to achieve a sustainable competitive advantage Business model frameworks include: Business Model Canvas, Alexander Osterwalder et al., 2010 Business Model Cube, Peter Lindgren and the EU Neffics project, 2012 Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Model Canvas Strategyzer.com * Alexander Osterwalder and Yves Pigneur.

15 Business Model Business Model Innovation & Strategy A business model describes the rationale of how an organization creates, delivers, and captures value * Value Business Model Canvas Strategyzer.com * Alexander Osterwalder and Yves Pigneur. Business Model Generation. John Wiley & Sons, Inc Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

16 Value Proposition Business Model Innovation & Strategy A value proposition describes the benefits customers can expect from your products and services * and how those products and services are differentiated from your competitor s Value Proposition Canvas Strategyzer.com Strategyzer.com * Alexander Osterwalder, Yves Pigneur et al. Value Proposition Design. John Wiley & Sons, Inc Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Operating Model (OM) Business Model Innovation & Strategy An operating model describes the intended level of integration and standardization of an organization across its key activities,

17 Operating Model (OM) Business Model Innovation & Strategy An operating model describes the intended level of integration and standardization of an organization across its key activities, organization, and technology domains Business Model Aspects The OM describes how an organization s business models are implemented Key Partners Key Activities Value Propositions Customer Relationships Customer Segments Key Resources Channels Organization Information Capability + Cost Structure Revenue Streams Operating Model Aspects Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

18 Operating Model Design Business Model Innovation & Strategy OMs can be described in one page sketches Example OM design sketches include: Operating Model Sketch Core Diagram* * Jeanne W. Ross, Peter Weill, David C. Robertson. Enterprise Architecture as Strategy. Harvard Business School Press Key OM concerns: integration, standardization, and resource sharing Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Business Model to OM Mapping (Example) Business Model Innovation & Strategy Current OM constrains target business models Operating Model Sketch OM designed to

19 Business Model to OM Mapping (Example) Business Model Innovation & Strategy Current OM constrains target business models Operating Model Sketch OM designed to realize target business models Derived OM Views Business Model Canvas Strategyzer.com Core Diagram Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

20 Customer Experience (CX) Customer Experience Design Customer experience (CX) is the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier* Purchase Feedback Select Buy Market and Sell Own S Support and Serve Maintain Research Need Receive Use Customer Experience Lifecycle** * Wikipedia. ** Jason Fish and Whynde Melaragno (Kuehn). Operationalizing Customer Experience Initiatives. Business Architecture Innovation Workshop. Object Management Group and The Business Architecture Guild. Sept Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Customer Experience (CX) Design Customer Experience Design Customer experience design methods model key aspects of the customer experience: Customer, interactions, artifacts/systems, and perceptions

21 Customer Experience (CX) Design Customer Experience Design Customer experience design methods model key aspects of the customer experience: Customer, interactions, artifacts/systems, and perceptions Example CX design methods include: CX Journey Map (Oracle)* CX Design Canvas (Oracle)* Customer Experience Model (CEM) (J. Teixeira et al)** * CX Journey Mapping Toolkit. Designing CX. DesigningCX.com. Oracle **J. Teixeira et al. "Customer experience modeling: from customer experience to service design." Journal of Service Management Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

22 CX Design to Business Model Mapping (Example) Customer Experience Design Value Proposition Canvas Business Model Innovation & Strategy Business Model Canvas Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

23 Business Architecture Design Business Architecture Design & Planning Business architecture design results in a blueprint of the enterprise that provide a common understanding of the organization and is used to align strategic demands of the business with tactical needs. The architecture blueprint includes: Strategy Map Capability Map Organization Map Value Map Information Map Product Map Stakeholder Map Business architecture maps not shown: Initiative map Policy map Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Business/Operating Model to Business Architecture Mapping (Example) Business Model Innovation & Strategy Business Architecture Design & Planning Examine each model view to ensure all mapping elements

24 Business/Operating Model to Business Architecture Mapping (Example) Business Model Innovation & Strategy Business Architecture Design & Planning Examine each model view to ensure all mapping elements have been identified Validate against the CX model Operating Model Sketch Business Model Canvas Value Map Organization Map Product Map Capability Map Direct Mapping Select Derived Mapping Information Map Strategy Map Stakeholder Map Initiative and policy maps not shown Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

alternatives Requirements Integration and quality checks Michael

25 Other Considerations Additional inputs Business motivation Business environment Analytical methods Strategic business scenarios & alternatives Requirements Integration and quality checks Michael Erickson, The Boeing Company 2015 Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Establishing a Design-Oriented BA Practice

26 Establishing a Design-Oriented BA Practice Personal readiness Expertise development Practice Sharing your learnings Networking Organizational readiness Michael Erickson, The Boeing Company 2015 Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

with BI/ Analytic support Simulation methods and tools Michael Erickson, The

27 Looking Ahead Open frameworks and methods needed Improved business and operating model methods BMI/OM/Strategy integration Model interoperability Visual methods with BI/ Analytic support Simulation methods and tools Michael Erickson, The Boeing Company 2015 Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Summary Disruptive change is the norm and it s accelerating Innovation

infancy Key mindsets and skills are critical Use sketch models and

Boeing Company 2015 Map conceptual design to business architecture Stay

28 Summary Disruptive change is the norm and it s accelerating Innovation will become necessary to remain competitive Business design is in its infancy Key mindsets and skills are critical Use sketch models and visualization techniques for conceptual design Michael Erickson, The Boeing Company 2015 Map conceptual design to business architecture Stay close to the customer experience Copyright 2015 Boeing. All rights reserved. DuPont, 3/17/

Innovation PLAYBOOK TOOLKIT

Innovation PLAYBOOK TOOLKIT About the Author Greg Satell is a popular author, speaker and innovation advisor, whose work has appeared in Harvard Business Review, Forbes, Fast Company, Inc. and other A-list