The new Business Suite 7 requires us to look outside the core applications to plan an implementation – because of the services infrastructure of most supporting functions. We aim for agility for our propositions, and flexibility in our processes, while still aiming for a low-cost operation. So what is the trick to make this balance work for us?
The new services architecture sure is a key ingredient. So how can we reap the advantages of it. In this blog we discuss a model of deciding what services matter. In the next blog we will review the way to manage the services. And finally we will have a look into an example of implementing the new Transportation Management solution.
TechnoVision and the Business Suite 7
Technovision is an IT strategy framework that provides clarity on information technologies and their future value, and also shows the fit of business and technology in a sector. It is not just a framework to show the better strategies for growth. Also in a gloomy times, it provides guidance on how to perform better.
In this blog we will discuss the way that implementing Business Suite 7 can provide the essential ingredients to have a successful IT strategy.
In a downturn, leaders win: so what is their secret?
We all see some form of “the end of business as usual,” and admit that the years ahead will be different from those that have recently passed. For many, the economic downturn dominates the vision; though some will see the opportunity to gain market share because other parties – that for example were cost-leaders, now cease to exist (their low cost was based on financial models that did not hold). Others will need to rearrange their business models and cut certain activities that are underperforming.
This leads to two generic business strategies:
1) be able to expand business effectively at a low cost in new markets and segments
2) reduce the cost of delivery of products by streamlining and cutting the cost of services and be able to rearrange activities smoothly.
In a series we will discuss how it can now be possible to balance agility plus flexibility with cutting costs: getting more for less. Investing pays off!
To make that clear, I will first look at the drivers that are behind Capgemini’s TechnoVision; subsequently I will look at the services that are available on the background to make the business more agile; and finally I will have a look on how all these elements – many more aspects come into the equation now – can be managed.
From strategy to vision
Strategy making can be phrased as a continuous struggle to find a balance between cost reduction and investing for innovation. Therefore, the market expresses an interest in innovating the core capabilities of IT as a source for rationalization and equally for obtaining agility. What happens if both goals can be obtained in one?
There is a trend to adopt large, enterprise-wide business platforms that cover all business functions. These platforms tightly integrate primary functions like sales, operations and manufacturing, logistics and other delivery capabilities with supporting functions like HRM, finance, purchasing – and of course with the firm infrastructure: the functions for managing the enterprise. A Business Process Platform is the key enabler to both cost reduction and innovation. Because it contains a wealth of facilities, it is the key asset that helps organizations move from strategic intent to delivered change, specifically in those cases where services thinking and re-use over buy over make are (becoming) leading principles.
But then – there is a downturn. Does all that strategic vision have any importance now? Common theme: these are perilous times.
Why act now?
The downturn leads to significant shifts in business priorities:
- Access to capital is more difficult, so financing new business initiatives or even the working capital becomes an issue. Lean Organising capabilities are important and get a new strategic importance. Understand the cash-related bottlenecks where your monies are tied up.
- Collaboration across your borders in the ecosystem with valuable goods in the pipeline (costs or revenues) must be better tracked and you must be more responsive to any changes.
- Retailers and manufacturers alike are facing much larger than expected drops in demand. You need to analyze patterns better and faster, use a ‘new radar-screen’ in your financial cockpit.
- The habits of consumers change rapidly, closing existing opportunities and opening new ones. Are these permanent shifting patterns or just volatile behavior like ‘going short on your supplier’? The epithet is that mere discounting doesn’t help. Managing new sales strategies and emphasizing different value drivers does work. Give sales the freedom to act swift, like with functionality on tap and services from a cloud, to access channels without disrupting IT. You need to have an understanding in the shift in preferences. As well, you need a smart and effective way to test new concepts in the new channels, such as with rapid innovation .
- If survival becomes the main objective – “without a short term, there is no long term”, then yes, you need to know what to cut down, where to slash. Is it on the sell-side (slack, ‘dogs’) or in the buy-side (ineffective supply chains or development lines).
Such issues might be solved.
TechnoVision becomes the right instrument to explore the new questions the downturn raises – notably:
- Can IT be managed as an enabler or smart – what does the new contribution of IT look like ?
- Changes in business priorities mean changes in business drivers and the need for new business drivers – which change? Which new drivers?
- IT costs are a tempting target for cost cutting – but do cuts make sense? Where can IT save money?
TechnoVision is Capgemini’s strategic framework to help you respond to current changes in the economic climate and addresses the demands and expectations of you as client. With it, Capgemini aims to help to answer important questions. It is a way to map the world of technology capabilities and to determine which technologies are related to the needs of a particular business or industry. This provides clarity in order that business and technology executives can focus their efforts on solving the ‘crisis’. The concept of TechnoVision was formulated by Ron Tolido, CTO of Capgemini NL and Pierre Hessler, member of Capgemini’s Board of Directors, as a method to determine the business priority areas of a firm, see this video .The concept is relevant even more in our current state of economic affairs, because it points to a path to implement various strategies, whether aiming to create added value for the market or now one with cost cutting as top priority. Of course there are a lot of trends, that for some these are mere hypes. For that reason, the trends have been grouped into seven clusters. In that way, TechnoVision differentiates common topics and typical patterns with what is relevant in the IT strategy per sector, as in this way is catered to the needs of a particular business or industry.
Specifically TechnoVision helps right now to answer:
- Can IT help the business in the radically changed environment?
- Which business drivers change? Are there new ones?
- Do we have the capabilities for changing our business model and what do we need to get there?
- Fast paced change is needed. This means that in certain (IT . . .) environments, the capabilities to change must be improved.
Let me make a bold statement:
The adoption of Business Suite 7 will help to achieve just that: enhance the core competence of lean and mean change will improve the future value of the company because the cost of IT will be reduced.
How TechnoVision can help build a mission statement for IT
Capgemini has developed a vision on IT that also helps to implement the new Business Suite 7:
- The requirements can be mapped into the services framework of the Business Suite 7 with ease by leveraging the new role of Business Process Experts. What services of the Business Suite 7 fit into the framework and actually for the layer of enabling technology?
- Implementation is still the hardest task. So, why can’t we simplify such a task? Well, to simplify this, an architecture method has been developed to expedite project – while at the same time on-boarding corporate management into the transformation. In our new concept, architects are not some nerds happily defining interfaces in a remote location, but boardroom consultants with a grasp on the while enterprise aspects of change plus having a grip on projects.
Why is the thought about the Business Suite a strategic issue?
The purpose of strategy is to ensure a sustainable position in the market and enable business growth by making the purpose of the organisation clear, by setting the goals and identifying the collaboration models on markets. Strategy shows where to innovate, where to do things differently – and why to innovate, such as to grasp market shares. It provides the rationale to reduce costs of operations relentlessly. Strategy-making today is a not static, top-down exercise done once a year but one that continuously allows reframing a problem and selecting viable alternatives.
One of the elements of reframing is stating what the impact is to the existing business infrastructure. Because the Business Suite must take in a central position in large enterprises, it is important to span strategy, delivery and operations when judging the alternatives. It is also important to evaluate details like the services capabilities of the platform. After reframing the future (smaller or different), the new architecture concept for SAP that unites business strategy and IT strategy by allowing services thinking. ArchitectedSAP provides steps for going from a formulated enterprise strategy to a successful (multinational) implementation.
The SAP Business Suite 7 supports essential business processes:
Customer relationship management (sell-side of the business)
- Supplier relationship management (buy-side of things)
- Product life cycle management (managing the portfolio in all stages)
- Supply chain management (including development, production, logistics)
- Enterprise resource planning (all resources, of course financials but including people and assets that are part of the equation behind the production function)
The value is of course in the business functions, but that is just an incremental improvement, The hidden value is in the services framework. This allows for agility and flexibility: two things that the CIO needs most. The holistic support offering accelerates innovation and decreases implementation cycles.
TechnoVision: a comprehensive model of the firm
TechnoVision is the result of the outcome of the CIO surveys of Capgemini. The model drafted a new way of managing the organization based on leveraging an Integrated Platform to derive new business propositions and enhance the value to the market. It shows the way how to create the space and culture to foster innovation. Merely focusing on cost drivers puts any organization in the position of a laggard. Bringing innovative concepts of collaboration to the table, even changing the game on the market will secure a place among the leaders. The key enabler to innovation is – apart from the people dimension – a wealth of facilities that we are embedded in the corporate backbone.
And that – a corporate backbone – is exactly what we should call the new Business Process Platform – the Business Suite 7: it allows the fundamental IT services to be delivered well, in an integrated way.
TechnoVision provides a framework to be innovative and provide maximum added value to the business. Two parts are taken out: the business process side of the Front Office that provides sophisticated methods to interact with customers; and the Back Office that ensures smooth delivery and execution of the business transaction.
When looking at the corporate backbone, we can make a distinction between facilities that support the Front Office and those in the Back Office.
The Front Office
The Front Office is the place where the enterprise connects to the environment. So this is where we see the direct impact of all those WEB 2.0 features. But in order to implement such capabilities, we need a wide array of services. In fact, we would not be able to implement WEB 2.0 if we would not have services stacks ready at our hands. To show where some important features are, we like to identify three areas that will be impacted. The business capabilities that provide agility and flexibility to the Front Office fall into several categories for which now three can be mentioned:
- Customer Intimacy. Putting clients and citizens up front: a transparent organization improves the information exchange, supports two way active dialogues. It has the capabilities to reach out to customers and clients in line with all the contract types and delivered products and services. Intimacy goes hand in hand with having oversight, even being able to have the power of negotiation. The agent at the contact center thus might use feeds from corporate intelligence frameworks.
- Supplier Value Network – Having the capabilities to streamline the information exchange with suppliers and partners, two-way also. Here we see the effect of a collaboration framework in the value chain.
- Knowledge Worker – Enabling the sales person, call agent or civil servant to use the wealth of tools that are available and work with all knowledge assets like Frequently Asked Question lists, Cookbooks, diagnosis schema’s or other features like analysis capabilities.
The Front Office is about all kinds of interactions with the environment: clients, but also partners. It has a large array of services that allow fast paced change to take place.
The Back Office
The Back Office is the capability to support transactions. An enterprise is built around the purpose it has for the environment: customers expect a service or product against a cost, citizens expect a service or payment (and rather not expect a tax of course J). All these services that are delivered are registered in transactions. If we want to change a transaction, for instance because we change the business model, then we need to do so in a simple and effective way.
The secret ingredient of change is the fact that there is a dormant layer of corporate services that provide the intimate control about changes. The business capabilities of the Back Office that come into play when we change our transactions, can be divided into those that provide for instance:
- Operational Excellence – Support organizational and process improvement to achieve maximum efficiency and cost control.
- Compliance – Receiving clear and unambiguous information to be able to be in control and the capability to comply to legal requirements
- Integrated Planning – Assure effective administering of resources, money, people and assets, to realize the mission and goals
- Enterprise Analytics – Management information to guide business and forecast developments or have a clear picture in hindsight
Of course, we can identify more capabilities, but these will do for now to make clear how services enable change.
The Back Office supporting the transactions, comes with a large set of integrated services that make changes in the structure of the transactions, of changes in the business models, a breeze.
We have seen that the Front Office and the Back Office both are an environment that contain a large set of services that enable interactions to take place in new ways on the one hand; while leveraging the capability to reuse the existing transactions on the other hand. Such services must be analysed from the perspective of business needs and fit in with the strategy and outlook. TechnoVision helps to formulate how the pieces fit together.
On the other hand, the large array of services must be managed in a concise way, in order to have the correct interoperability between these two identified domains. In the next blog, we will discuss how the Business Suite 7 can be used to create the infrastructure for these services.
Albert Kuiper Capgemini The Netherlands