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Enterprise arkitektur – Innovation fra teori til praksis

Nytænkningsprocessen Case 1: Udvikling af forretnings arkitektur i en

service organisation Case 2: Top-down: Udvikling af applikations

arkitektur med udgangspunkt i forretnings strategien

Case 3: Bottom-up: Process optimering på tværs af en stor kompleks organisation

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Nytænkningsprocessen

Nytænkning – tre forskellige tilgange: Top-down: Design med udgangspunkt i strategiske

analyser, fx. Porters generiske strategier / Five forces.

Bottom-up: Inkrementelle forbedringer med udgangspunkt i evaluering af eksisterende processer, fx. Via lean / Forbedrede handoffs

Outside-in: Inspiration til kreative løsninger fra lignende organisationer

Case 1 Udvikling af forretningsarkitektur i en service

organisation

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Background GSS was a division in the “Group Operations” organisation with about

300 employees in the following units:• PPM – Premises and Property (physical workspace, desks, chairs,

building maintenance, etc)• ISaS – Internal services and support (canteen, cleaning, meeting

rooms, switchboard, travel, etc)• Sourcing – supporting outsourcing and procurement throughout

the organisation• COS – Office tools (mail, communicator, MS-office, etc)

GSS services were fragmented and didn’t have a “customer” perspective

GSS Target Picture 2013 was initiated in 2010 to set direction for the development of the services provided

Focus was on efficiency and effectiveness of the users, more than efficiency of GSS

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Target Picture - Definition

GSS Target Picture 2013: A description of a target state for 2013 expressing the GSS vision

as a set of service concepts - including objectives, KPI’s and measures - enabling creation of an implementation roadmap for reaching the defined target state

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A service concept is a shared understanding of the service provided and received, which encapsulates information about the customer experience and the service outcome. A service concept summary is a high level description (3-10 lines) of a service concept, indicating customer experience and outcome.

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An example service concept – filled templateService concept name:

GSS - Meeting facilities and hospitalityService concept area: Service to support the daily work

Service Concept driver:

User motivation: User need to have a meeting

GSS motivation and KPIs:Limited Amount of user complaints (less than x%)Utilisation rate never higher than x%End user survey satisfaction index > x%

Summary Service description:We ensure that Nordea employees and their external partners are able to meet in well equipped meeting facilities with appropriate services delivered

Service experience – Nordea employee: Conference centre:Professional reception and lobby area to

meet the visitors High quality conference centre to meet

colleagues and external visitors Access to support to technical equipment if

needed Refreshments and food available

Meeting room:Access to different kind of meeting rooms

supporting the way of workingVideo, round table, lap tops etc available

when needed Access to support to technical equipment if

needed Refreshments available

Service experience – Nordea management:N/A

Service outcome - Benefits:Different meeting places for different needs Access to all meeting room

and to book the services in one place (time)Standardised meeting rooms Access to support for all

Service outcome - Emotions:Functional Comfortable Reliable Easy to use

Service outcome - Values: You know what you get (standard) Less time consumingEasy access to rooms and servicesRefreshments available every where if

wanted

Tasks included in service concept:

Initiatives needed to implement Service Concept: Identity need for meeting facilities (number, size, equipment, etc.)Clarification of roles and responsibilities

–Development–Operation

Get mandate outside GSS to take chargeEstablish dialogue forum (e.g. Users, HR, IT, etc)

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Input to target service concept definition

Approach to ensure innovation: Top-down from GSS unit guiding

service principles and vision Bottom-up from AS-IS services Taking input from users and

internal partners Taking input from best practices

and benchmarks

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The Top-down approach

Overall vision: “Great European bank, acknowledged for its people, creating superior value for customers and shareholders”

Group Operations vision: “Becoming customer centric through innovation and productivity improvement”

GSS vision: “We make it possible for our partners to concentrate on their core business”

GSS Guiding principles:• One GSS – no silos• Demand driven• Competent and service minded• Time to market

GSS Vision & Principles

Nordea and BP&GO Visions,

Target picturesand initiatives

Unit Interpretation Target

Picture2013

GSSEM

Given

To-Be Service concepts and KPIs

Core deliveriesand team targets

Units / L3 & L4

Managers

All GSS employees

Nordea

BP&GO

GSS Vision & PrinciplesGSS Vision & Principles

Nordea and BP&GO Visions,

Target picturesand initiatives

Unit Interpretation Target

Picture2013

GSSEM

Given

To-Be Service concepts and KPIs

Core deliveriesand team targets

Units / L3 & L4

Managers

All GSS employees

Nordea

BP&GO

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The Bottom-up approach

All GSS employees participated via team-meetings to:

• Describe As-Is situation

• Set team targets

• Suggest improvement Templates and facilitation was provided from project team

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Input from Users/internal partners

Team leaders and managers were encouraged to collect input from their “customers”

This was not coordinated/supported further by the project team

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Benchmarks/best practices

Team leaders and managers were encouraged to investigate benchmarks and best practices from the industry

Project team provided inspiration, e.g. value disciplines:

• Operational excellence• Streamlined processes• Cheapest price for specific quality• Example: Ikea

• Product leadership• Product development• Bleeding edge products, little price

sensitivity• Example: Apple computer, Pixar

• Customer intimacy• Customer interaction• Tailor made solutions• Example: Consultancy

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The Result

About 20 service concepts About 50 projects organised in 10 initiatives Example service concept and resulting project:

Employee Lifecycle Management: • Previously, a manager needed to contact 20+ units to

get a new employee started (access cards, mobile, desk, PC, welcome flowers, …)Service concept goal: one interface

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Case 2Top-down: Udvikling af applikations arkitektur

med udgangspunkt i forretnings strategien

The IT-strategy pitfall

Each unit may have thought through their IT requirements. But an apparently well-aligned Business- and IT-strategy may in reality be a collection of individual functional strategies with no coordinated prioritisation

Source: CSC Perspectives – Business and I/T fusion14

GSS business strategies and priorities

Thus, from the business side the GSS IT strategy takes input from:

GSS vision and Guiding Principles

GSS Target Picture 2013 Service Concepts

GSS Target Picture Initiatives (business development projects)

The GSS IT strategy is driven by the GSS business strategy as defined by the GSS Target Picture 2013 and its derived business development initiatives

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IT-Strategy tools - Fusion Tree (strategic view partly filled in)

One GSS – no silos

Service concepts

Required Business

Capabilities

We help our

partners concentrate on their

core business

Travel

Required ITCapabilities Technology/

Architecture

Applications

Organisation

Strategic ViewLeft-to-Right

As-Is IT ViewRight-to-Left

Application Quality

Missing

Good

Fair

Poor

Demand driven

Competent & service

mnd

Time to market

Guiding service

principles

Archive

Physical deliveries

Switchboard

Catering

Buy and payment

Meeting facill &

hospitality

GSS SPOC

…

Vison

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IT-Strategy tools - Application portfolio assessment matrix

4R Model

LOW

LOW

Tech

nic

al C

on

dit

ion

Business Value

Reassess

Can we increase business value?

Renew

How to maintain this condition?

Retire

Don’t Bother

Redevelop

What is the most cost-effective approach ?Low

Low High

High

Source: CSC Perspectives – Business and I/T fusion17

Value discipline

Type IT impact

Operational excellence

Best total cost

Standardized, efficient, cost-effective systems

Product leadership

Best product Creative use of technology to accelerate and support product development efforts, while other functions are treated as secondary processes requiring limited IT investment

Customer intimacy

Best total solution

Flexible but simple, standardised IT applications that can be reconfigured to meet individual customer needs

Alignment of the IT operating model with the enterprise’s value discipline is key to effectively exploiting the power of information technology

IT-Strategy tools- Value disciplines impact on IT

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Case 3Bottom-up: NNCR - Process optimering på

tværs af en stor kompleks organisation

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New Normal Cost Reduction (NNCR) 2013 initiative - Objectives

• Identify significant Group-wide cost reductions with full impact in 2013, by end of March 2012.

• Cost reductions must be on top of reductions included in Q4.2011 RFF, and each Business Area & Group Function (BA/GF) includes the additional cost reductions in their RFF as part of the Q1.2012 RFF process.

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A non-compensation cost baseline constituted a fact-based guide for discussions

B1

B2

B3

B4

Utilities

Rent

Repair & Maintenance

Other3

Total 2010Other expenses1

PremisesB

1,906EURm

X

X

X

X

D1

D2

D3

D4

D6

D5

IT consultants

Production,NP (IBM)

Production, Other

Software

Other4

Communication

ITD

763EURm308EURm

A1

A2

A3

A4

A7

A6

A5 Security

Postal services

Office material & expenses

Cleaning

Newspapers & Literature

Waste handling2

Catering

Facility services

A

193EURm

E1

E2

E3

E4

E5

E7

E6

E8

Information systems

Advertising & Marketing

Meetings & Events

Membership fees

Sponsorship

Market research

Other6

Gifts & Donations

Marketing & Information

E

233EURm

Other admin, Hypotek Sweden

F1

F2

F3

F4

F5

F7

F6

F8

F9

Temporary employees

Business & Project cons.

Collection & Collateral

Insurance

Auditing & accounting

Financialsupervision7

Transportation of cash

Other admin8

Legal advice

Professional services

F

F10

278EURm

C1

C2

C3

Training & Conferences

Travel

Leased cars

Personnel services & ben.

C

C4 Other5

131EURm

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

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Scope and structure of NNCR discussions

All non-FTE costs are in scope:

• BA costs that are managed by GO

• Direct BA costs

GO managed costs

Direct BA costs

IT

1 2

Premises

Facility Services

1

2

Marketing & Information

Professional Services

Discussion structured around a number of

defined cost categories

Personnel Services & Benefits

A

B

C

D

E

F

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Parameter Description Low Medium High

Savings potential

Preliminary estimate of savings potential for 2013 run-rate, understanding cost base,

flexibility and savings potential Below 1 EURm 1-10 EURm Above 10 EURm

Level of investment required

Level of financial investments or resources required to implement the change

Large investments (>5 EURm) and/or man-hour

resources (>1000)

Medium investments(<5 EURm) and/or man-hour

resources (<1000)

Small investments(<500 EURk) and/or man-hour

resources (<100)

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Skills and competencies

required

Required competencies and skill set present in the organisation to execute the change

No internal competences to execute the project available

Some internal competences to execute project available

All internal competences to execute project available

Time to impactExpected time frame from decision to pursue

initiative till savings is realized and recognized in P&L 12+ months 6-12 months 1-6 months

Stakeholder complexity

The amount of people involved from different departments

Many stakeholders involved from different organisational

units

Some stakeholders involved from few different parts of

the organisation

Few stakeholders involved within same organisational

unit

Transparency on cost and driver

The extend to which the costs and cost drivers can be easily understood by the

'receiving business area', i.e. actual transparency in cost category

Limited visibility into the costs and drivers of those

Some visibility into the costs and drivers of those

High visibility into the costs and drivers of those

Transparency on consequence and

complexity

The extend to which the consequence and complexity of implementing potential

solutions within a cost category is well understood

Limited transparency to the consequences and

complexity

Some transparency to the consequences and

complexity

High transparency to the consequences and

complexity

Assessment framework based on 7 parameters

Attractiveness score for each parameterAttractiveness score for each parameter

If possible, actual savings potential range – if not then;

If possible, actual time at which project is complete

If possible,, investments required – if not then;

1. Savings potential defined as 2013 actual earning impact

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• Collect user requirements and suggestions (interviews)

• Develop gross list of potential savings scenarios

• Assess saving scenarios on• Impact• Investment• Timing

Detailed idea-to-business-case process for each ideaOverview of key objectives, activities and deliverables

January 17(Latest)

End of February(Latest)

March 10

• Ensure team alignment on idea scope, ambition and key activities

• To establish a detailed overview of spend and cost drivers

• Substantiate preliminary savings estimates

• To analyze possible solutions and estimate savings potential of those solutions

• To ensure buy-in fromall relevant stakeholdersand formal approval from sponsors

• Prioritize list of opportunities/scenarios

• Draft High level Business Case

• To identify and prioritize ideas for which to completea high level business plan

• Set team for chosen projects

• Consolidate all approved initiatives and prepare GEM presentation

Ob

ject

ives

• Confirm required resources have been allocated to team

• Prepare and conductkick-off workshop with project team

• Detailed planning of key activities for solution development phase

• Establish data requirements to create transparency and send data request

• Analyze relevant cost categories to identify• Cost receivers/users• Primary cost drivers

• Meeting to understand base line and relevant drivers

When relevant• Conduct supply market

analysis• Collect and review

contracts• Conduct internal

benchmarks

• Further substantiate the quantification of savings potential by BA

• Conduct prioritisation workshop and decide on most feasible solution

• Determine RFF implications for relevant BAs

• Write High-Level Business Case

• Conduct approval meeting with all decision making stakeholders

• Implement final iterations to business case

• Outlining cost structure through spend cube

• Idea generation workshops to identify potential ideas

• Preliminary deep dives in relevant cost categories

• Evaluate Nordea performance via external BCG benchmarks

• Workshop with key stakeholders to evaluate gross list of ideas

Act

ivit

ies

• Final High-level Business Case

• Activity plan for solution development phase

• Detailed fact base incl. types, receivers, and drivers of costs.

Validated idea assessment including target cost savings split per impacted BA

• Gross list of savings scenarios assessed on impact, investment and timing

• Idea assessment • Team structure and

governance• Description• Idea attractiveness

• GEM presentation of recommended savings initiatives

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Key

Del

iver

able

s

Key deliverable(see next page)

x

• Task Force to consolidate portfolio of business cases into final proposal for GEM

• Task Force to drive preparation of GEM update materials• Alignment

process with BAs and within Task Force

• Receive sign-off of GEM update materials by Torsten H. Jorgensen

1 2 3 4

Consoli-dationTransparency and

fact base (as-is)Substantiate and

prioritise

Mobilise

Solution development

Teaming and Planning

Decide and Approve

Proposal generation

2 weeks 3 weeks 1 weekEach idea

A B C

• Draft High Level Business Case

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Dea

dli

ne January 17

(Latest)

January 24(Latest)

January 31(Latest)

February 8(Latest)

February 15(Latest)

February29(Latest)

Deliverable to be sent to Task Force mailbox (costideas@nordea.com) at noon on delivery date – Signed off by Sponsor

A1

A2

A3

A4

A5

A6

B1

B2

B3

B4

B5

B6

B7

C1

C2

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The result

About 10 initiatives yielding significant yearly savings across the organisation

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