How is it possible for a local company to defeat global giants like Pepsi, Coca-Cola, and Watsons in your market segment and establish market leadership for more than a decade? The answer is given by Nongfu Spring, a Chinese company in manufacturing and retail industries. In my recent report “Case Study: Technology Innovation Enables Nongfu Spring To Strengthen Market Leadership”, I analyzed the key factors behind their success, and provide related best practice from enterprise architecture perspective. These factors include
Business strategy is enterprise architecture's top priority. EA pros often need to be involved in project-level IT activities to resolve issues and help IT teams put out fires. But it's much more important that architects have a vision, clearly understand the business strategy, and thoroughly consider the appropriate road map that will support it in order to be able to address the root causes of challenges.
Agile infrastructure sets up the foundation for scalable business growth. Infrastructure scalability is the basis of business scalability. Infrastructure experts should consider not only the agility that virtualization and IaaS solutions will provide next-generation infrastructure, but also network-level load balancing among multiple telecom carriers. They should also refine the network topology for enterprise security.
The IT services industry is being challenged on two opposite fronts. At one end, IT organizations need efficient, reliable operations; at the other, business stakeholders increasingly demand new, innovative systems of engagement that enable better customer and partner interactions.
My colleagues Andy Bartels and Craig Le Clair recently published thought provoking reports on an emerging class of software — smart process apps — that enable systems of engagement. In his report, Craig explains that “Smart process apps will package enterprise social platforms, mobility, and dynamic case management (DCM) to serve goals of innovation, collaboration, and workforce productivity.” In other words, smart process apps play a critical role in filling gaping process holes between traditional systems of records and systems of engagement.
Ten years ago, open source software (OSS) was more like a toy for independent software vendors (ISVs) in China: Only the geeks in R&D played around with it. However, the software industry has been developing quickly in China throughout the past decade, and technology trends such as service-oriented architecture (SOA), business process management (BPM), cloud computing, the mobile Internet, and big data are driving much broader adoption of OSS.
OSS has become a widely used element of firms’ enterprise architecture. For front-end application architecture on the client side, various open source frameworks, such as jQuery and ExtJS, have been incorporated into many ISVs’ front-end frameworks. On the server side, OSS like Node.js is becoming popular for ISVs in China for high Web throughput capabilities. From an infrastructure and information architecture perspective, open source offerings like Openstack, Cloudstack, and Eucalyptus have been piloted by major telecom carriers including China Telecom and China Unicom, as well as information and communication solution providers like Huawei and IT service providers like CIeNET. To round this out, many startup companies are developing solutions based on MongoDB, an open source NoSQL database.
Familiarity with OSS is becoming a necessary qualification for software developers and product strategy professionals. Because of the wide usage of OSS among both vendors and end users, working experience and extensive knowledge with OSS is becoming a necessary qualification not only for software engineers, but also an important factors for product strategy professionals to establish appropriate product road maps and support their business initiatives.
How can your firm deliver great, loyalty-inspiring customer experience – and achieve its efficiency objectives?
Firms that want to boost Return on Equity (ROE) or Return on Capital Employed (ROCE) must improve productivity. And in a very real sense Productivity = value / resources. But too often, the role of IT is to reduce the denominator – resources, and usually leave the numerator – value, to someone else to worry about. So many EA professionals are expected to deliver cost or risk reduction - reducing the resources required for delivery of that value, or the risk associated with that delivery. They usually take an inside-out view with a primary focus on efficiency; and struggle to engage with the value delivery side of the equation.
But if productivity = value / resources, then the challenge is to both reduce resources and deliver enhanced value. The opportunity for Business Architecture and BPM professionals is to connect great customer outcomes and experiences (the value side of the equation) to scalable and efficient back office operations within the organization. That’s “both/and” – not “either/or.”
But how do you do that?
Generally speaking, business people don’t really care too much for efficiency. They come to work for the value they deliver to their customers; not the reductionist philosophy of cutting costs. If you want to engage them on a journey toward performance improvement, leading with the efficiency side of the equation can be a mistake.
As some of you know, I’m a bit of a political junkie. I believe I picked up the political bug from years of riding shotgun with my dad as he listened to Rush Limbaugh blaring on the car radio. As a kid, I loved listening to Rush and trying to understand where he was coming from, trying to understand his perspective, trying to understand his ideology. The term “culture wars” in U.S. politics is used to define a clash between two different political ideologies – conservatism and liberalism.
Over the past few years, I’ve also started using the term “culture wars” to describe the clash and fragmentation we’ve seen in the BPM market. In the BPM space, the clash has primarily been around dynamic case management (DCM), human-centric workflow, and straight-through processing ideologies.
I’m the first to admit that fragmentation and categorization is not always a bad thing, since it can help software buyers and decision-makers better understand which solutions best match their business requirements and desired business outcomes. However, the fragmentation in BPM sometimes overlooks the primary purpose and value proposition of BPM – to help support creating a sustainable business change program.
Lately, I have become a bit obsessed with evaluating the linkage between good process design and good experience design. This obsession was initially sparked by primary research I led earlier this year around reinventing andredesigning business processes for mobile. The mobile imperative is driving a laser focus for companies to create exceptional user experiences for their customers, employees, and partners. But this laser focus on exceptional design is not only reshaping the application development world. This drive for exceptional user experience is also radically changing the way companies approach business process design.
Over the past six months, I have run across more and more BPM teams where user experience is playing a much larger role in driving business process change. Some of these teams highlighted that they see experience design playing a greater role in driving process change than the actual process modeling and analysis aspects of process improvement.
Outside of BPM, one of my other passions is mentoring college students through the process of launching new startups. I enjoy helping students tighten up their business ideas and seeing them build business plans that can attract the funding they need to stand up and implement their ventures.
Recently, after reviewing and providing feedback on a student’s business plan, the student responded, “I can launch my business without a business plan; all this planning seems like a waste of time.” At first, I thought he was joking. However, I could read by the look on his face that he was serious. I am sure you can imagine the conversation that followed.
The next day when I reflected on the conversation, I had a moment of satori. I could see that startups share the same risk/reward profile as business process management initiatives. Just like startups, BPM initiatives promise huge returns to investors and stakeholders. Additionally, just like startups, BPM initiatives are fraught with risks such as inadequate funding, low adoption, and difficulty attracting skilled resources.
My conversation with the student about the importance of business planning seemed to parallel conversations I often have with enterprise architects and business architects launching or retooling their BPM initiatives. Most tend to overestimate the BPM’s potential rewards and downplay — or do not fully understand — the risks involved with launching a BPM initiative. However, for the most successful BPM initiatives, I have found that their leaders tend to have a “lean startup” mentality.
What does it mean to have a “lean startup” mentality?
Executives don't decide how customer-centric their companies are—their customers are the ultimate arbiters. Digital disruptors—a term coined by Forrester describing companies that leverage digital platforms to take advantage of customers' heightened expectations and deliver a more compelling product and service experience at a lower cost—are threatening traditional business models. I will be exploring this challenge and discussing how to establish the right digital agenda on October 18-19 at the upcoming Forrester conference Developing Digital Disruption: A Forum For Application Development & Delivery Professionals.
Our research shows that a good experience impacts customers' behavior in three ways: 1) they are more willing to consider another purchase; 2) they are less likely to switch their business to a competitor; and 3) they are more likely to make a favorable recommendation. But how does that affect a company's bottom line? We estimate that the revenue impact from a 10-percentage-point improvement in a larger service company's performance, as measured by Forrester's Customer Experience Index score, could exceed $1 billion.
While you no doubt answered wellness, the reality is that when you look at the typical change programs in a major corporation today, Band-Aids are far more common. But that's hardly surprising given the short-term pressures facing organizations today. Let's reflect on a few examples:
Those in the financial services industry are still struggling to deal with the rash of new regulation post meltdown. Following a spate of high-profile failures, risk management has taken center stage, while in others there is a hurried review of operating procedures in far-flung corners of the corporation.
In virtually all industries, others are trying to respond to hemorrhaging sales statistics. Customers are no longer happy to keep quiet when they get a bad service experience - they tell their friends and followers via Facebook and Twitter. Customer churn is rampant.
Or is it increased competitive pressures? More and more new entrants are turning up to challenge and disrupt the incumbent business models of many established firms. They don't have the baggage of high-cost business models and 12 layers of management.
Arguably, mobile is currently the hottest trend driving both business and technology strategies for executives. If you need any additional evidence, just look at all of the enterprise buzz Apple has generated with the iPhone 5 launch. Unfortunately, today’s business and technology leaders continue to respond to the mobile opportunity with the wrong answers. Business leaders respond to mobile with, “Let’s build a really slick mobile app, put it up on iTunes and we’re done!” Technologists respond to mobile with, “We need a strong BYOD policy and to put device management tools in place!” Both of these responses completely overlook the fact that underlying legacy applications and business processes need optimizing for the mobile experience.
We run into examples of this “lipstick on a pig” approach to mobile all the time. In fact, I ran into a perfect example of this recently when I needed to order a pizza for my family after a very hectic Saturday afternoon. When I picked up my mobile phone to call the pizza delivery place, a light bulb went off over my head. Instead of dialing the pizza delivery company and waiting on hold for 15 minutes, why not download its mobile app in two minutes and order my pizza within another two minutes. I figured I could shave off ten minutes of wait time by simply downloading the pizza delivery company’s mobile app.