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Thursday 9 December 2021
denkmodel strategie 2
When I joined IBM Global Services in 1999 I was given the opportunity to delve into the tremendous amount of Intellectual Capital, I bumped into an article that explained a lot to me: "Dynamic Stability model, Victor, Boynton and Pine – IBM Systems journal volume 32 1993". In my time with AT&T Network Systems / Lucent Technologies I had already been working with the concept without really comprehending the basics. I highly recommend you to read this article (see the weblinks on strategy). In summary it explains business strategic choices that are based on stable vs. dynamic processes that produce stable vs. dynamic procduct / services.

dynamic stability modelA typical development path of a product / selvice delivery organization starts with 'Invention' (pioneering in the garage of mam and dad) to 'Mass production' (fully standardized products that are provided by stable repeatable processes) then comes 'Continuous Improvement' (where continuous process improvement (cost-)optimizes the product / service) to 'Mass Customization' (a customer offering which provides a customer specific configuration of standard components, which are delivered by stable processes).

When we look at the data that describes the product/service structures we can see a similar development path.

In times of pure 'Mass Production' there was a so called 'Bill of Material (BoM)' with a purely hierarchical structure with 'finished goods' as the highest level and 'packaging material', 'semi-finished goods', 'raw material', etc. on the lower levels.

However, for a 'Mass Customization' provider this is not sufficient any more. On top of the traditional BoM structure we need another structure with levels that support defining Customer specific configurations of these products / services, leading to a wide variaty of Customer offerings consisting of a limited number of standard products/services.

business hourglass modelIn my AT&T time I had already met with the 'hourglass model' that was used to explain product/service descriptions. This model has an enormous impact on laying out the business processes.

Due to the difference in key management objectives there are fundamental differences in the 'Customer Facing Process (CFP)' and the 'Order Realization Process (ORP)'.

Next these two main processes there is also the Research and Development process  that provides for 'New product / service introduction' where again different key management objectives lead to a different process structure. We call this the 'Product Realization Process (PRP)'

In practice the product/service providing processes PRP and ORP are litterally 90° on top of each other. From my time with AT&T I have an old picture probably originating form the Philips organization in the time that AT&T Network Systems had a joint venture with that company.

ORP PRP modelThe key to succes in a company is in implementing flexibility in the 'manufacturing process' in such a way, that both ORP and PRP performance indicatoren (PI's) can be met. In particular the interface between 'manufacturing' and 'product & process implementation' is crucial here. Information standardization and information exchange plays a key role.

From all of the above a top level Business Process Model based on a strategy for 'Dynamic Stability' looks as follows:

Top level Business Process Model

Realization of the dynamic stability model implies continuous 'business process re-engineering (BPR)' within all 5 main processes in this model. This requires an IT strategy that enables BPR. In particular a high swithing capacity for implementing new funtionality in IT. This can only be realized managing IT based on an architecture that provides these switching capabillities. (see the articles on architeccture).