HIT Special: Hooking up strategies

	Business, organization and information architecture

Strategy models
There are a lot of techniques and models for strategy management. An overview in one context.

Embedding strategies
Developping your strategy is one thing. Putting it to work in your operations is something else. Is it?

Service Based Costing
Combine the best of both worlds to account and manage the costs of both business and ICT, using one and the same model.

Why modelling?
To manage a modern organization, good modelling is vital to capture, plan and control it's dynamics and complexity.

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About Best Practices
Best practices like ITIL are no guatantee for success, when implementing means copying the outcomes...

Special: Embedding strategies

Developping your strategy is one thing. Putting it to work in your operations is something else. This special shows how strategies can be realized by embedding them in the architecture and organization.

Specifying strategy

On the right you see a basic balanced scorecard strategy map. The business strategy is developped from four different business perspectives: learn & growth, internal, customer and endresults/ financial. The business perspectives are the points of view from which the business strategy is developped. Business perspectives as well relate to the main categories of stakeholders and their concerns. From each point of view various strategic intentions are set by business objectives. The figure on the right does not show business objectives though. Instead you find the main business aspects on which business objectives are commonly stated:

Learn & growth: the organization's compentences (skills and knowledge), work climate (culture/attitude) and technology used to support the strategy.
Internal: the main processes and the way these processes are performed by the organization to support customer and financial objectives.
Customer: the context in which the organization operates. In this perspective the organization aims at a strategic position it wants to achieve in its enviroment. On the listed aspects a value proposition is defined by which the business presents itself and its products to the market (or citizens/society in case of government/non-profit).
Endresults/financial: the main results the organization wants to achieve. The right halve is concerned with the costs and asset-utilization the organization pursues. The left is concerned with the revenues that are to be collected. For businesses this is about the profits and market share. Government and non-profit organizations state their political, idealistic and social objectives here, such as the health, education and security of citizens or the number of whales that are to be saved.

Instead of objectives as well (critical or key) successfactors are used. Or successfactors are put in place to support the objectives. For each objective and/or successfactor measures or performance indicators are defined to set quantified targets. Finally strategic initiatives or actions are defined to support the realization of the targets set. So far this is a basic balanced scorecard.

In a balanced scorecard strategy map interdependent business objectives are related with cause and effect relations. For example: in order to improve our customer relations, customer contacts are to be handled better, for which a more customer oriented attitude is required. These cause-and-effect-relations can be specified with sort of 'if-then'-statements. It's this combination of objectives and cause-and-effect relations by which strategic hypotheses are phrased, put into operation and tested. Strategy maps get down to the essence of strategy by taking the facts and figures of the past and present, to make assumptions of the future.

Architecture and engineering hooks

In literature a lot of authors consider balanced scorecards the implementation of strategy. From an organization management point of view this is very true of course. Business targets are quite tangible as well from an operational perspective. What's not determined by definition in balanced scorecards though is who has to take what responsibilty and gets which resources and authorities to achieve these targets. That still has to be implemented.

Architecture and engineering can be used to translate strategic objectives, targets and initiatives into operations. Architecture blueprints the organization to realize the strategy. Through engineering the architecture is further elaborated into specifications that apply well to operational managers and staff.

This of course is more easily said than done. Here some handles are provided. First of all to retain the same points of view that are used in the strategy all the way down in architecture and organization. All business aspects that substantiate the strategy are positioned within the same business perspectives. In the figure on the left you find the main groups of business aspects within each perspective. Like business objectives these aspects interrelate as well. For example: personnel have a position in the organization for which they perform activities in the business processes to realize services (business use cases) by which service is provided to the customers.

To these aspects the various elements for cost accounting can be related. This Service Based Costing model is HIT's metamodel that defines and interrelates all the managerial aspects and business economical elements that make up the business. Because it includes all the aspects that are used in strategy it's the perfect the landing field to position and concretize business objectives, targets and initiatives.

Strategy hooked up

Within the same business perspectives, the business objectives can be related to the business aspects and elements by which the strategy can be constructed. These relations are showed in the figure on the right. By elaborating these constructs through architecture and engineering all required changes in business operations are identified and specified.

The other way around management information can be derived from business operations:

Current figures for initial strategic analysis.
Operational achievements to measure the performance of business operations against the targets set.

By using one structure for mapping business objectives with operational constructs all management information will be qualified and quantified in a uniform way. Providing more accurate and up to date management information.

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