Successfully Responding to Change

Business and Enterprise architecture are the hot topics today. Enterprise architecture dealing with the IT infrastructure and its relationship to the business and Business architecture dealing with the structure of the business and its alignment with the digitization of the business including IT. However, the architecture framework encompasses a broader scope starting with the business environment defined by the business landscape and ecosystem to the detailed execution of the business to respond to that environment. A more complete picture of the architecture and their relationships is shown below:

Organizations are faced with high-demand response to changing business conditions in their environment. The interoperability of organizational components depends on how well the business architecture is known, documented and analysed with various types of business analytics. In the past, this depended on the corporate knowledge in people’s heads. The economic situation today has pressured organizations to merge operations, consolidate, divest and re-arrange their basic components. Loss of staff also means loss of knowledge of how the organization works. Assessing impact of changes depends on the preparation of models used to describe the organization and the analytics available to conduct an assessment of changes.

Enterprise (IT) architecture is perhaps the most common architecture developed today. The reasons for this are simple. Many of the architecture techniques have been developed by IT to cope with the explosive growth of the use of digital technology, the large cost of digitization, the complicated structure of enterprises and the rapidly changing structures that are needed to respond to market changes and economic impacts.

The business and IT architectures must be linked and understood to manage business change and address the demands of contemporary business. Businesses today are required to develop their architecture skills and capabilities to successfully respond to the changes in their environments.

• Architecture Resources
• Architecture Professional Education

Achieving Goals through Innovation and Change

Business analytics today Business analysis depends on successful application of three different types of analytics, financial, quantitative and descriptive. These three analytics form the legs of the analysis triangle.

The 3 analysis legs provide a guideline for understanding analysis types. Business analysis today has a business execution perspective and is tied to operationalizing analytics and intelligence into processes.

Real advantage comes from applying the analysis techniques to external and strategic interests. Business analysis also leads to the development of requirements for process change, application acquisition and various application development, package deployment or services articulation.

Analytical techniques are applied to external or ecosystem views such as for merger, acquisition, divestiture, privatization, consolidation and outsourcing.

The implications of business analysis leads to the assessment of change that impacts the organization. Business analysis also includes topics of operational due diligence, performance measurement, knowledge management, product architecture, process architecture, competitive intelligence and business intelligence.

With business analysis being at the forefront of change, the business analysts use business analytics to improve business performance. Knowing more about business analytics provides the basis for driving innovation and change

• Business Analysis Resources
• Business Analysis Professional Education

The goal of enterprise performance management is to improve the performance of the enterprise in a manner consistent with the strategic intent of the management. To do this the enterprise must address both the external and internal impacts through methods such as competitive intelligence and business intelligence. The external view is supported by disciplines such as the 5 forces and competitor cross impact analysis. The internal view is supported by performance disciplines such as balanced scorecard, value chain and other methods. KCI provides services in support of realization of the goal of performance management especially as relates to:

• Business intelligence
• Competitive Intelligence
• Balanced Scorecard
• Five forces assessment

In addition to providing services in this area, training courses are available to help transfer knowledge to key people in your organization to ensure they are ready to implement the changes and meet any new challenges.

Effectively managing organizational strategy & risk during a downturn

In today’s global market, there are areas that have downturns other have upturns. It is during these chaos periods that companies have realized that standard solutions will not solve issues that have risen out of the macro economic situation.

This is because there are two types of issues at hand, i.e. strategic issues, as well as operational issues. Most operational issues can be addressed with standard task-oriented management approaches, but organizations need to address strategic issues and to focus on the big picture to effectively managing organizational strategy & risk during these times, especially, in a downturn.

Elements, such as inflation, business cycles and risks should be evaluated to allow the management to take concrete steps to steer their business to success. In most cases, these steps will revolve around the following seven approaches:

1. Focus on the core competencies of the business
2. Remain close to your customers
3. Timely & Reliable Management Information
4. Identify and Manage risks
5. Re-visit and refocus your strategy:
6. Manage Costs
7. Identify & retain talent

Let's discuss some of these seven approaches.

1. Focus on the core competencies of the business: This is easier said than done, as in most large organisations, the reporting system and information flow, does not easily allow the management to identify those areas of the business which are of the most value, and those which are marginal contributors. QPR ScoreCard allows management to clearly define the strategic drivers for the organisation and identify the underlying processes which drive these strategic objectives. QPR ProcessGuide allows organizations to clearly define core processes which drive the core value of the business. By linking performance indicators to these processes from QPR Scorecard, at all relevant levels, it becomes easy for the management to focus on those process areas which realize the most value and monitor these processes closely to ensure delivery of strategic goals and objectives.

2. Remain close to your customers:

Ensuring that customers remain satisfied, will ensure loyalty during hard times, especially in a downturn, as customers will be channeling funds into those partnerships which provide the most value. Ensuring that customers continually see the value provided by the organization will lock in future revenue streams. QPR ScoreCard allows the creation of strategic themes. As an example, the Customer Value proposition theme, extracts the Value proposition drivers from the strategy map, and co-relates this with outcome objectives to clearly show cause and effect impact of the organization's strategy. This allows the management to periodically diagnose their strategy execution, and ensure that key business drivers such as product image, customer satisfaction, etc. are closely monitored to ensure that the organization is close to its customers. QPR also provides seamless drilldown functionality to get to the root cause of non-performance. Drilldown can be by multi- dimensions, and can be viewed along with action plans put by mid-tier managers to improve performance of critical elements. QPR ProcessGuide allows clear and accurate documentation of all customer facing processes (and other organizational processes) to enable organizational members to effectively interact with customers in a manner which provides them the highest value, while also meeting organizational requirements.

3. Timely & Reliable Management Information:

It is at times like these, that it is crucial for a CEO to know what is happening on the ground. Ensuring a system which enables transparent internal communication on matters of operations and strategy will ensure that the management is well-informed and can take appropriate and timely decisions. The QPR portal provides a complete overview of operations and strategy execution ("What’s New" View). Sections displayed include performing indicators, non-performing indicators, actions being taken by the management team, as well action plans which are due, their deadline, and the responsible person for executing the same. To ensure that only reliable information is acted upon, QPR ScoreCard provides the option to visually mark information which has been validated and approved by the data steward. Other information is also displayed, but can be marked as non-validated. There are also certain critical elements which the management would like to track very closely. Under normal circumstances, the management is dependent on receiving updates on these key elements from middle & lower management, and often, when these elements perform poorly, there is reluctance and delay in providing these figures to the management. With QPR ScoreCard, the management can set up exception alerts for any measure, objective or initiative and choose to be alerted via email when performance goes bad. This puts the control back into the hands of the management. They can take immediate decisions and actions to correct performance. It is also possible to view a summary of all alerts on a single screen and get a reminder of the last date the alert was triggered.

4. Identify and Manage risks:

This is the time to document and address risks across the organization as well as external to the organization. Having a system to document,and control risks will ensure that timely preventive and corrective action can be initiated to mitigate risk in some cases, and eliminate risk in other cases. The following are the usual challenges associated with risk management in organizations:

1. Risk and compliance are managed reactively
2. Risk and compliance are managed in functional silos
3. Lack of a systematic approach for the whole organization
4. Multiple regulations are overlapping, causing duplicate work · Regulations and business operations change constantly · Risks are viewed as threats, not as opportunities · Reacting in an isolated way to each and every risk and regulation is inefficient and is becoming a huge cost driver · Management cannot obtain a clear view of risks, compliance and the status of internal control and this hampers decision making, leading to lack of solutions to the problem. The QPR Risk Management solution, which is created for each organization using QPR ScoreCard & QPR ProcessGuide, provides a comprehensive framework for risk identification, assessment, control & reporting as under:

   Risk Identification

   Step 1, Model Processes into the desired level of details. This is done using QPR ProcessGuide. QPR ProcessGuide provides an easy-to-use tool to quickly document and detail all processes. It allows the management to involve its entire organization and business partners with an easy-to-use environment, that provides an easy to understand modelling notation, and serves as the central hub for process documentation, related specifications, policies, agreements, document templates etc. QPR ProcessGuide provides all users with the powerful capabilities of a professional process modelling, analysis, and communication tool in an easy-to-use package you would expect from a process drawing tool. Step 2: Identify risks & controls in your processes Once the processes are detailed, it becomes easy to document risks against each process. It then becomes possible to also identify existing controls which are available to mitigate these risks.

   Risk Assessment & Reporting

   Step 3: Perform risk assessment via QPR Portal Risks can be then assessed based on the probable impact and the probable likelihood on different variant of scales as desired by the organization. For example, the scale could be from 1 to 6, or using status options from high-to-low. Step 4: Risks ranked automatically, highest to lowest Once the risk assessment is made by the respective managers of the organizations, the risks will be automatically ranked by QPR, based on the severity of the risk and the likelihood of the occurrence of the risk. The management can then detail the control activities to be undertaken, using the action plan functionality of the QPR Portal. Step 5: Risk Dashboard Risk assessment & reporting is made easy on QPR ScoreCard, with highly configurable Risk Dashboards as shown alongside. This makes risks visible to the management and enables them to focus on exceptional risks very quickly and take control actions appropriately. Step 6: Remember relation to Strategic Objectives & KPI's It is critical to understand the impact which the identified high impact & probability risks have to the Strategic Objectives & KPI’s. QPR ScoreCard allows mapping these risks to the respective Strategic Objectives & KPI’s to give a further, much needed dimension to risk reporting, enabling the management to focus on those risks which impact critical Strategic Objectives & KPI’s. Step 7: Risk reporting, drill-down & consolidate It is also critical for management to be able to drill-down risks from the corporate level, through the hierarchy of departments in the same manner as drilling down financial and other reporting numbers. This allows the management to view corporate risks by dimensions such as line of business and then location, as an example. a: Risk view in more detail QPR ScoreCard allows the ability to drill down to each risk and view the historical progression of the risk profile, to enable the management to assess the effectiveness of risk mitigation activities. Step 8: Dashboard for critical risks QPR ScoreCard allows critical risks to be reported separately from general risks and supports creation of dashboards and drill-downs for these risks. a: Risk reporting, amount of critical risks Available statistical reports on the number of risks by risk categories further enhances the management’s ability to focus on critical risks within the defined risk categories. This can be graphically represented by numbers for easy identification. Step 9: Risk reporting, analyze critical risks in detail QPR ScoreCard allows extensive risk reporting and analysis at all levels. Ø Control Activities Step 10: Create control activities to identified risks Control activities can be added using the QPR Portal against risks identified, by the respective managers. Control activities and then monitored alongside the risks. Finally the management will be able to monitor these control activities through the QPR Portal with status of each control activity and deadlines against the same. 5. Revisit and redraw your strategy: Strategy which has been initiated with a completely different economic backdrop in mind quickly becomes inapplicable and even dangerous under adverse macro-economic situations. A previously applicable competitive advantage may need to be re-invented to ensure the organization remains competitive. QPR Scorecard allows the management to track strategic objectives within highly configurable strategy maps and define the strategic relationships between the objectives. The co-relation function clearly defines the cause and effect linkage and allows the management to diagnose their strategy while it is being deployed. Based on the co-relation generated based on the actual data, the management can take more informed decisions to effectively impact strategy deployment. Strategy can then be quickly refocused and re-deployed as required. 6. Manage Costs: Managing costs does not mean across the board cost reductions. Business structures and business processes need to be closely examined, to ensure the organisation can support customers in the most cost effective way. Non-value adding processes need to be rationalized, and resources freed up from these processes can be redeployed usefully elsewhere. QPR ScoreCard can be used to build a robust budgeting system to ensure that costs are received from bottom-up, and once collated by the system, the management can validate the proposed costs to ensure that only value adding costs are approved. Moreover, on an ongoing basis though-out the year, QPR ScoreCard can be used by the management to track actual costs against budgeted costs, and ensure that costs are closely controlled at all time. 7. Identify & Retain talent: A critical step in survival is to identify talent across the business which cannot be lost. Having a robust & transparent performance management system in place will greatly support quick identification of critical talent, and allow the management to reward them suitably to ensure their retention. QPR ScoreCard supports this objective by supporting creation of personal scorecards which can reflect not only KPI’s, but also competencies to present a complete view of the individual’s performance. Moreover, QPR ScoreCard allows the management to quickly structure and deploy a transparent performance management system by allowing cascade of scorecards, KPI’s, and strategy from the corporate level, through department levels right down to personal scorecards. And finally, personal scorecards can also link the total individual performance directly to compensation and make this available transparently to the managers and the individual. Conclusion Responding to activities in today’s global market requires dynamic, proactive, responding management to business conditions. Especially in a downturn of economic times, management needs to closely monitor strategy, performance, costs, and risks. Using QPR ScoreCard & QPR ProcessGuide effectively equips the organization with a single window solution to effectively plan, monitor and improve its performance.