How is complexity being killed? - Forth question in Stress-testing your Enterprise Architecture

It's time for the forth of seven questions in stress testing your enterprise architecture: How is complexity being killed?

First of all, let's look into which types of complexity we are facing. I can come up with at least three, there may of course be more, but this is enough for this discussion

1. Business complexity. The way our business is organized and its processes add to complexity further down in IT Systems and information.
2. IT System complexity. Our IT landscape and how we have decided to divide systems into discrete components will add yet a layer of complexity on top of the business complexity.
3. Information complexity. Both the structure, content and ownership of information throughout the enterprise adds complexity to both IT system and business.

Don't forget that complexity will be a consequence of your strategy, your goal is to get rid of all of the unnecessary complexity not aligned with your strategy. 

Complexity grows exponentially - what seems manageable initially eventually becomes a behemoth 

Just a word of caution: The costs of complexity is seen first during implementation and then while operating and maintaining the solution. The problem is that complexity costs are higher in later stages - what appeared to be manageable in design, gets hard to implement and impossible to maintain.

But let's try it out. My advise is to use these three steps to find your way to the rumble - once there you will have to navigate on your own.

• Business driven. Whatever you do, make sure there is a clear business case based entirely on business benefits, not IT benefits. Once there are clear business benefits, then the business will make sure those benefits are realized and that the complexity is in line with the business' strategy. Your responsibility is to ensure that the resulting IT Systems are not adding complexity not introduced by the business.
• Business verticals. Break down the problem into verticals and implement them one-by-one. Yes, it adds costs. Yes, it reduces risks and time. This can be done both using a best-of-breed and a best-of-suite strategy. Just do it one vertical at a time. Then you will faster learn, faster get something valuable out there and get cashing in on the business benefits.
• Business information. Information is a strategic asset in any enterprise. Decouple business verticals from an information standpoint. Then they can live their own life and evolve according to the business needs they support. Have clear ownership, clear structure and clear interfaces. Who's owning which information, for what purpose is it used and when is it updated. 

Thus you can have the business drive your architecture through verticals where information is exchanged for the benefits of the entire enterprise.

Makes sense? Let me know what you think.

More to read:

• HBR June 2011: Learning to live with complexity

Insight generating questions that brings science to the art of strategy

One thing that's bothered me in many strategy discussions is that you very easily end up in locked positions throwing oral hand grenades at each other. Even if it doesn't go that far, it's hard to get an open and curious strategy climate. I've seen top-level strategy discussions to contain much more energy and openness when moving from finding "What is the right answer" to looking for "What are the right questions".
Let's look at a set of questions that will help you find the right questions that, once answered, sets the direction and involves stakeholders in embracing the decision.
We'll go through the four most important questions: Inside-out; Outside-in; Far-outside-in; Opportunity evaluation. Note the openness in the reasoning. We're not looking for the answer, we're looking for opportunities and choices.

Inside-out: Start with your assets: activities, resources, brands, partnerships, etc and then reason outward. What are we especially good at that some segments of the market might value and that might produce a superior wedge between buyer value and our costs?

Outside-in: Start with looking at markets. What are the under served needs, which needs do customers have a hard time to express and which gaps have competitors left?

Far-outside-in: Start with analogues reasoning. What would it take to be Google, Apple, P&G or another successful organizations in your industry and context?

Opportunities generated. The result of asking these three types of questions: Inside-out, Outside-in, Far-outside-in, are a lot of questions that opens up for new opportunities once answered. Do any of them make you feel uncomfortable? If so then they posses the possibility for new opportunities that differs enough from the status quo.  Then it's time to evaluate and decide.

Opportunity evaluation: Evaluate each opportunity by asking the question "What must be true for the opportunity to be valid?". Don't ask "What is true" - that only causes heated head-on discussions - instead asking "What must be true" - you open for all sorts of opinions to be expressed.

Now you have generated a large set of opportunities and the conditions governing their validity. Once they are answered, you have gained a lot of new insights - regardless if the answer was true or false.

More to read:

• HBR September 2012: Bringing Science to the Art of Strategy

What is the key customer value proposition that is supported? - Third question in Stress-testing your Enterprise Architecture

It's time for the third of seven questions in stress testing your enterprise architecture: What is the key customer value proposition that is supported?
Your customers turn to you because they perceive a very specific value offered. Align your architecture to support that value. Never find yourself in a situation where the architecture is considered state-of-the-art and the business struggling.
What is a customer value proposition? Here's a starting point:

• Which jobs-to-be-done are solved?
• What is the correlation between the benefit offered solving the jobs-to-be-done and price?
• How does the customer value proposition differ from the competition?

It can be a daunting task to do it for the entire company. A good starting point is then to start within a sub-domain, division or geography to limit the workload and be able to get to some sort of results quickly.

Once you have broken the workload into manageable pieces it's time to start analyzing from the key customer value proposition aspect. The following areas are covered from an Enterprise Architectural point-of-view:

• Top-line factors: 
• Jobs-to-be-done. How do we collect and generate insight into our customers? How do make that insight available to everyone within our organization and partners? 
• Channels. How do we support our channels in promoting the value and jobs-to-be-done that we help with? How do we analyze the performance and profitability of our channels? 
• Pricing. How do we make price and discount information transparent? How can we analyze correlation between insight into value and price?
• Bottom-line factors:
• Customization. Which customizations and flexibility do we offer to tailor to customer needs? How do we manage that information all the way from engineering through manufacturing to sales?
• Supply-chain. How well have we integrated the information flow from customer behavior all the way to our suppliers? What is our agility in terms of managing sudden changes in demand or supply?
• Sourcing. How have we balanced between in-house and external supply in order to have flexibility and cost-control? How well is our sourcing integrated with engineering and sales in order to create variants to meet customer demand?

Do you have other areas to be added and more questions to ask?

More to read:

• Jobs-to-be-done: Interview with Clayton M. Christensen
• HBR November 2010: Stress-Test Your Strategy: The 7 Questions to Ask