Translate strategy into execution

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Use business architecture to drive agile business transformation.

Our ever-changing and increasingly complex business environment rewards companies that can effectively address new challenges and opportunities. However, aligning the organization behind a single, agreed-upon plan for change remains an elusive goal.

One of the top 10 opportunities identified by CEOs in our Business Pulse report concerned “improving execution of strategy across business functions,” in addition to “innovation in products, services and operations.”

Business architecture provides a set of techniques to actively manage the business so that it can take full advantage of opportunities afforded by new technologies, partnerships, regulatory change or other market factors.

By providing transparency across traditionally siloed and opaque business assets, COOs, CFOs and CIOs can drive performance improvement across business functions, optimize the use of business resources and focus attention where it is most needed. Additionally, the strategic perspective offered by business architecture allows organizations to more effectively exploit technology and overcome historical IT constraints on business agility.

1. What’s the issue?

Businesses that embrace change can obtain significant competitive advantage by being first to market while maintaining cost-efficient and sustainable operations. Yet, to thrive in this environment, businesses must be able to identify the right strategic direction, prepare a sustainable response, and execute in an integrated fashion across the organization.

Such an approach is necessary given the way that different strategic drivers result in conflicting demands on the organization, in both the public and private sector. Executives need to keep up with the accelerating rate of change, yet many challenges in their organization need immediate attention and cannot be deferred.

2. Why now?

Digital technology is fundamentally shifting the way that organizations approach strategic transformation. Change activity today is more technically involved and more integrated, and it is taking place at a faster pace than ever before:

  • Digital customer-facing capabilities are providing direct, external access to what used to be back-office systems and processes.
  • Cloud technologies have created an environment where new solutions can be delivered in weeks rather than months or years.
  • Integrated information has become central to making operational decisions and providing good customer service more effectively.
  • Core enterprise resource planning (ERP) is evolving to support more efficient, integrated and automated execution of finance and supply chain processes.

3. How does this affect you?

Without the tools and techniques to align disparate change activities to an integrated strategic end-state, organizations lose their ability to effectively execute new strategies.

They end up making investments in misaligned solutions that do not realize the expected business benefits, generating additional business complexity and risk.

4. What’s the fix?

EY chart – Business reference model

To understand the business model and construct current and desired operating models, organizations should consider using a reference model to identify areas of opportunity and focus. Organizations can use a reference model to generate highly agile digital business models to drive transformation.

Business architecture offers organizations a set of tools and techniques to describe the way that external factors and strategic objectives impact their business. It provides a clear picture of “what is” and “what could be” that organizations can then use to evaluate strategic options and to agree on the direction for change.

Organizations need to develop new approaches to culture, governance and strategy execution:

  • Culture
    Companies need to develop a culture and mind-set to address strategic issues across the organization, rather than within individual units and silos. Organizations should meet challenges with the specific intent that any activity, no matter the size, can be traced clearly back to business imperatives and an agreed-upon target state.
  • Governance
    Organizations need to place greater emphasis on governing how to achieve strategic objectives in addition to what to achieve. Strategic objectives have many cross-organizational dependencies that require close collaboration on execution and a deeper understanding of the shared outcome to be achieved.
  • Strategy execution
    In a world where strategic priorities are constantly changing, the business must construct and maintain visibility of the current and desired states of the operating model. These views allow the impact of changes to be quickly assessed, allowing decision makers to evaluate options and prioritize investment opportunities.

5. What’s the bottom line?

Within this environment of constant, technology-enabled change, business architecture provides the tools to optimize and align change investments for the good of the entire organization, rather than specific units or silos.

Specifically, business architecture can help companies to:

  • Translate strategy into execution by describing how strategy will impact the business in a way that can be understood by a broad audience
  • Enable transparency options, impacts and change initiatives to provide senior stakeholders with the information needed for decision-making
  • Formalize collaboration across the organization to better understand and manage opportunities, dependencies and risk
  • Quickly respond to new opportunities and challenges, and maximize leverage of available assets and resources