Business architecture has become a bit of a watchword for organizations thinking about their future. It’s about all sorts of things – the “what” we do and “why” we do it. It’s about the “who with”, or more importantly “who for.” But it’s also about the “how we do it”, and “how we build engagement” to ensure we “do the right things,” rather than just “doing things right.”
Given that I focus on the methods and techniques that help organizations translate strategy into action (business architecture, process architecture, business engagement, etc.), I want to talk a little about the trends, methods and approaches that we see in the practice of business architecture.
I have to say recent engagements have been a real eye opener … some folks are very advanced in some areas – say capturing strategic intent, but then struggle to translate that into meaningful plans that energize colleagues in the business. Some are talking a good story of target operating models – focused around the experiences they deliver to their customers, but then miss the link to current day project portfolio that’s singularly focused on reducing the employee headcount. And as we saw in our recent BPM Suites Wave, business architecture principles are becoming more important at the process execution layer too.
I recently reviewed a portfolio of about 600 software artifacts from 16 large IT service providers. This daunting exercise complements a research stream I have been working on since the beginning of the year on the future of the IT services industry. While I believe the move to software asset (SA)-based IT services will drive maturation of the services industry and help IT service providers remain relevant to their clients, the analysis of this SA inventory raises a few significant challenges:
Most software assets face scalability issues. Traditional sales and marketing organizations within IT service providers fail to sufficiently scale up the number of clients for their SA-based offerings. Case in point: 68% of the software assets analyzed in this inventory have fewer than five clients. This low number raises concerns on the financial viability of these offerings for service providers.
Service providers will face a SA sprawl over the next couple of years. On average, service providers currently have about 20 SAs in their SA portfolio. The analysis shows that this number is growing exponentially (see below). The number of SAs created has increased by an average of 26% each year since 2009 and is accelerating. More assets were created in the first six months of 2012 than in any previous entire year; SA-related investments are following a similar trajectory.
During a recent global analyst event in Paris, Capgemini presented its strategy to a panel of market and financial analysts. It hinges on two main objectives: improving the resilience of the organization in an uncertain economic environment — especially in Europe — and finding new levers for margin improvements.
From an operations point of view, Capgemini intends to continue leveraging the usual suspects: industrialization, cost cutting, and accelerating the development of its offshore talent pool. It also aiming to optimize its human resource pool via a pyramid management program aimed at, among other things, allocating the right experience level to the right type of work.
More interestingly, the company showcased some of the global offerings it has put together or refined over the past 12 months. Capgemini’s strategic intent is to develop offerings addressing three major client-relevant themes – customer experience, operational processes, and new business models. The offerings will be enabled by a combination of cloud, mobile, analytics, and social technologies. Among the set of offerings managed globally, I found the following of particular interest due to their emerging nature and Capgemini’s interesting approach to developing them:
Technology vendors are disconnected from their customers. If the problem were simple, such as changing message themes, tech vendors could easily adapt.
When looking at tech vendors, the "problem" is long-standing, entrenched behaviors about how products and solutions go to market. The "problem" includes customers that now want to buy "business outcomes" rather than traditional products. The "problem" includes sales organizations that fail to learn about the customer's business or requirements. The "problem" includes marketing organizations that fail to recognize that while they get to aim the gun, only sales can pull the trigger. Across these three processes, companies are trying to shoot faster, shoot bigger bullets, or even aim at different targets when the real problem is eye-hand coordination - or aligning methods and messages.
Selling technology requires three processes to align: (1) the customer problem solving process; (2) the vendor selling process; and (3) the marketing processes for communicating solutions. Gaps in these processes will cause finger-pointing within the vendor, raise the average cost of sales, lengthen the sales cycle, increase turnover of sales and marketing employees, confuse customers, etc. Few tech vendors are changing their internal methodologies to align these processes.
How are these gaps in your organization? How is your company addressing these gaps? We'd love to hear your experience!
(Next in this series, Forrester will introduce "portfolio management" as framework to help sales enablement professionals align these silos.)
It's a shame to get old! My oldest child recently announced that he and his wife are having a child themselves. On one hand, I am thrilled at the prospects of having a smiling infant in the family - that I can hand off for unpleasant tasks. On the other hand, I am in complete, 100% denial about the word that will define my relationship with this child - the "G" word - shhhh, don't say it!
This made me reminisce about work. I remember my years in marketing at Sequent Computer Systems. The sales organization sold products based on "feeds and speeds" that became possible from "symmetric multi-processing." It was exciting stuff. We lived on the cutting edge of technology. Customers bought "products."
My next move placed me in the outsourcing industry. Rather than buying products, customers looked for solutions - usually a functional combination of hardware and software to solve a technical problem. Acronyms such as ERP and CRM were common, and the services industry exploded. Customers bought "solutions."
Now I am at Forrester and witnessing another fundamental change in the market. The financial pressures of the recent (and continuing?) recession changed customers. They now align business investments with technology costs. Customers want "outcomes."
The problem is that tech vendors are going to market the same way that we did 20+ years ago. In today's market, vendors must understand the customer - not in the abstract - but understand current problems and desired outcomes. Adapting your products and messaging to a customer point of view is called "portfolio management." Forrester's sales enablement team would love to hear about your experiences, perspectives, or insights.