A PICTURE IS WORTH A THOUSAND WORDS

WHITE PAPER

OPERATING MODEL CANVAS

CONTENTS PREFACE 1

AUTHORS 2

1. INTRODUCTION 4

2. COMMUNICATION AND COLLABORATION 6

3. THE OPERATING MODEL CANVAS 10

4. STRUCTURE AND DESIGN OF THE OMC 18

5. DEVELOPING THE CANVAS 26

6. APPLICATION OF OMC: ASPECT LAYERS AND EXAMPLES 30

7. CONCLUSIONS 36

ABOUT ANDERSON MACGYVER 38

ADDITIONAL RESOURCES 40

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One of the most important tools we use at Anderson MacGyver is the Operating Model Canvas (OMC). The OMC is at the base of most of our client assignments. It draws a single picture of the organiza-tion in terms of its customers, business partners, other stakeholders, channels, value propositions, products and services, all primary and supporting activities The OMC has proved to be an excellent basis for effective discussions about the impact of strategic choices, and for setting the digital agenda. The OMC is inspired by the Business Model Canvas of Alex Osterwalder and the value chain concepts of Michael Porter. It is an intuitive, simplified and comprehensive visual representation of the organization. The OMC is developed with a clear eye on the creation of busi-ness value. With the OMC, digital land-scapes, digital roadmaps, and enterprise architecture can be strongly and logically related to the shared business perspec-tive. Building an OMC proved not only to improve the collaboration between business, tech and data but building an OMC also brings business, tech and data on a shared level of understanding the business.

PREFACE The OMC supports organizations to reflect on the most effective and value-added use of tech and data, and to help design the digital landscape. Our clients actively use and maintain (or propagate) their OMC to show the impact of digital transformations, to visualize digital road-maps, project portfolios, or new business models.

In 2018 a scientific article has been published about the OMC approach.We hope you will be inspired as much as we are, and that the model will provide you with a powerful means to visualize the workings of your organization from both a business, tech and data point of view, to steer the design of your tech and data organization. •

Albert Sprokholt, Fabian Haijenga, Crystal ReijnenAuthors

AUTHORS ALBERT SPROKHOLTAlbert, MSc, is a principal consultant at Anderson MacGyver in the field of strategy, governance, information management, architecture and sourcing of technology and services. He has over 30 years of experience in various sectors such as logistics, manufacturing, techni-cal services, financial services, utilities and government. He worked as CIO managing complex organizations (Bührmann-Tetterode and AEGON) and was an executive member of the board of Morgan Chambers and the European Executive Committee of EquaTerra.

He is a lecturer at Nyenrode Business University, the Academy for Information Management on digital services, govern-ance and sourcing. He is an arbiter for the SGOA (Stichting Geschillen Oplossing Automatisering [foundation for the reso-lution of IT disputes]). •

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FABIAN HAIJENGAFabian, MSc, is a senior consultant at Anderson MacGyver in the field of stra egy, business architecture and sourcing. He has over 15 years of expe-rience in various sectors such as field services, engineering, and financial service both in the Netherlands and Internationally. Fabian has an MSc in Management, worked as a consultant within KPMG and EquaTerra and as an enterprise architect within Hewlett Packard EMEA. Within Anderson MacGyver, Fabian is the Lead Product Management. •

CRYSTAL REIJNENCrystal, MSc, is a consultant at Anderson MacGyver, focusing on digital strategy, sourcing, organization design, and enterprise architecture modelling. In the past few years, she has worked in several industries ranging from energy and natural resources to retail and higher education. Prior to becoming a consultant, Crystal completed her MSc in Business Informatics by researching the role of the Operating Model Canvas in the formulation of a digital strategy. The research paper written afterwards in collaboration with Albert and Fabian was published in 2018 by the Association for Information Systems (AIS). •

CHAPTER 1INTRODUCTION

The success of investments in tech and data strongly depends on the collabora-tion between business, tech and data. Too often it appears that tech and data are unable to deliver the services that the organization expects, because of misunderstanding and misinterpretation of what is really needed. Today’s products and services are designed based on data, algorithms, technology and depend on high-quality technical infrastructures. Decision-making for these investments requires that business, tech and data decision-makers share the same view on the business and the way it should be prioritized, planned and organized in terms of digital infrastructure, data and organizational capabilities. Getting business and technology on the same page is therefore important.

The fact that the business sometimes works round the internal IT-department to obtain services (known as shadow-IT) is symptomatic. Business operations do not have the knowledge to understand all the intricacies of managing tech and data in meeting their demands and expecta-tions, like how to maintain service levels and to deliver changes in time. On the other hand, tech and data staff often has no insight into the root causes of busi-ness problems, or what a technology

solution should entail to create value further downstream in the value chain. Tech and data staff strongly believe in their own skills and capabilities, are convinced that solutions for business problems can be found in using more or different applications, and typically come up with solutions they feel are best for the organization. Users are asked for their requirements and are kept at a distance whilst the tech and data department is building the solution. Major issues why technology projects fail are non-alignment between business and technology, changing needs due to changing user insights as a result of people learning during development and business being convinced that any tech-nical solution can be built to solve their needs. All these issues are caused by a lack of working together or mutual understanding. Agile working has been an answer to these issues on an opera-tional level, but agile does not address the strategic issues in making the right decisions for changing the digital land-scape, investments in digital and devel-oping digital capabilities, technologically as well as organizationally.

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Anderson MacGyver helps you to break through this vicious circle. This white paper introduces a tool to build bridges between board, directors, business units and technicians by placing tech and data directly into the business context. For this purpose, Anderson MacGyver has developed the Operating Model Canvas, in short: OMC.

The structure of this white paper is as follows. Chapter 2 addresses the neces-sary alignment and collaboration of business, tech and data. Subsequently, the OMC is placed in relation to other analysis models such as the Business Model Canvas and the Value chain. Chapter 3 describes how the OMC combines the concepts of other analysis models into one visualisation that contributes to the alignment of business, tech and data. Chapter 4 and 5 explain the structure and the way of working. Chapter 6 describes how the results of the OMC can be used in practice and in chapter 7 our final conclusions are presented. •

CHAPTER 2COMMUNI ­CATION AND COLLABO­RATION

2.1

THE WAY PEOPLE THINK

Good mutual understanding requires excellent communication between busi-ness operations and tech and data organ-ization. Daniel Kahneman, an Israelian psychologist and Nobel prize winner, has developed several theories about how people think, absorb information and how they come to decisions. The basis of Kahneman’s work is the separation of our thinking into System 1 and System 2. System 1 is our automatic pilot and can be described as quick, automatic, emotional, stereotypical, and uncon-sciously. System 2 is the opposite and equals slow, occasionally, logical, calcu-lating, consciously and demands effort and energy.

In-depth research shows that people have a strong preference to approach their daily activities with System 1. This system requires little effort, is fast and our automatic judgements are often right. Do you know the feeling that you arrived at work for example not remem-bering how you got there? That is typi-cally System 1. An important element of System 1 is that we use the information

that is directly at hand. Searching for other information takes a lot of effort and is not considered. System 1 is so effective that people do not realize that they are using limited information to come to a decision or judgement. People come to conclusions based on their intuition (gut feeling). Kahneman describes this as ‘What You See Is All There Is’: WYSIATI.

In System 1, people naturally tend to apply their own perspective and will not auto-matically place themselves in the shoes of others, which requires another way of thinking. System 2 is only activated when one needs to think about an answer, such as in calculating the sum of 314 x 405. The answer (127.170) is formulated by System 2. System 2 is the only one that can follow rules, compare objects on several attributes, and make deliberate choices between options. The automatic System 1 does not have these capabilities (Kahneman).

As long as each party communicates from within their own comfort zone of thinking, they will continue to talk past each other. The tech and data organiza-tion often prefers to adopt an approach that ensures thoroughness, a clear scope, structure and a strong focus on

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the current systems and way of working. Albeit with all good intentions, they still miss the point because they are often insufficiently open to new insights, new requirements, learning experiences and feedback from the business owners and their users. It creates a comfortable but imaginary world, that is more and more overtaken by the fast pace of the real world. Business will take their own view for granted (also System 1 thinking) and assume that their view will be understood by the tech and data organization.

A new and shared vision can only be created if both parties think according to System 2 to resolve this discrepancy. Building a shared model and equal under-standing is a very good start to solve this issue. The OMC addresses exactly this discrep-ancy. Building an OMC together forces participants to apply System 2 thinking. The OMC invites people to think logically, calculated, and consciously, and helps to build a common picture of the business based on a shared means of communica-tion. It offers people a solution to come to a mutually shared understanding of the problem situation.

2.2

COLLABORATION AMONG BUSINESS, TECH AND DATA

One should not underestimate the impor-tance of effective collaboration between business, tech and data. Tech and data are an essential and strategic part of the business activities in any organization. In the past, tech and data were mainly used to automate business processes. Today technology is an increasingly important part of the product and service offerings, like mobile banking, web shops, leisure, cars and consumer electronics. More and more often it creates completely new business models through the digital transformation of the service offering. In addition, tech and data support organiza-tions to become faster and more result-oriented, more agile by digitizing business processes. With one caveat: this only works when business, tech and data work well together.

There are plenty of tools available to provide insight into business activities and processes and to increase under-standing among others. Architectural overviews depict the often complex interaction between parts of business

systems. The tech and data organization is using information planning methods and architecture (section) overviews, based on for example TOGAF, ArchiMate or alternatives. These approaches are developed within the realm of the technology world and not from the perspective of business stakeholders, decision-makers, and users of their solutions. The main objective of these models is to clarify the cohesion of all kinds of systems and subsystems and to support decision-making about technol-ogy investments based on roadmaps and action plans. The deliverables of these methods are not really suited for proper communication between tech and data organizations and decision-makers. The deliverables are typically a tool of the tech organization, showing numerous technical details, and thus not suited for strategic interaction with the average business manager or user. In other words, the tech and data organization works with its own tools and deliverables without making the translation to the world of business managers and users. For the latter, it remains a complex topic that is difficult to understand and because the business messages from the material presented are difficult to distil.

When the tech and data organization and the company misunderstand each other, there can be several causes. First of all the background of the two groups is entirely different. The tech and data organization is solution-oriented; most businesspeople are market-oriented. Secondly, everyone has the tendency to think according to System 1 thinking. Not taking the interest, time, and effort to truly understand what is going on and what is meant by what is said by the people from the other department. The approach of developing the OMC helps to overcome this issue because both tech-nology and business are discussing the intricacies of both worlds, maintaining the focus on the business side of things, contrary to information planning tech-niques which are IT-driven. •

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‘A shared vision on a model of the business can only be achieved if it is understood and supported by all involved.’

CHAPTER 3THE OPERATINGMODEL CANVAS

The Operating Model Canvas (OMC) visu-alizes the organization’s customers, busi-ness partners, other stakeholders, channels, value propositions, products and services, all primary and supporting activities. The model promotes the adap-tion of one common language. Through the business activities, the OMC links the business perspective on one hand; and the tech and data on the other hand. The setup of the OMC is from a business perspective, not from an IT-perspective. This helps to simplify and improve the communication because the OMC repre-sents the way the business operates and the environment everyone in the organi-zation is working in. The OMC visualizes the essence of the business in a single view, e.g. like an A0 poster. The power of visualisation in communication has been well described in the books ‘The back of a Napkin’ and ‘Bla Bla Bla’ written by Dan Roam. Figure 1 shows the positioning of the OMC in comparison to the other tools we often use.

The OMC does not depict the organiza-tional structure, like locations or legal constructions and it does not show any hierarchy. The focus is on the business activities and the most important actors: consumers and business partners with-out the implications of the organizational

or legal structures or information systems. The OMC is more stable over time than the organization running the business operations. Typically 3 – 5 years. Most reorganizations do not directly influence the operating model of a company as such. The activities will remain more or less the same. It might be that responsibilities shift, or that activi-ties will be outsourced, but the activities still need to be done, albeit in another way or provided by an external partner.

The business model defines the OMC (see Figure 2). The ValueWeb, as described in White paper ValueWeb, shows the rela-tionships with external actors, including where the value for the consumer is created. The OMC visualizes the value propositions and the business activities that an organization performs to realize its mission and vision. The OMC provides a detailed view of the business activities, on which the information-services, data and organizational models can be depicted.

FIGURE 1 UNDERSTANDING YOUR BUSINESS MODEL, STRATEGY AND ITS CONTEXT

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VALUEWEB BUSINESS MODEL CANVAS OPERATING MODEL CANVAS

• The purpose of the ValueWeb is to analyze and determine the characteristics of the relationships in which organizations operate and value for consumers is created and delivered

• Anderson MacGyver(inspired by Parolini)

• Business Model Canvas is a strategic management and lean startup template for developing new or documenting existing business models

• Osterwalder

• The Operating Model Canvas visualizes the organization’s customers, channels, goods and services, primary and supporting activities. The canvas promotes the adaption of one common language

• Anderson MacGyver

3.1

PROVEN MODELS AT THE BASIS OF THE MODEL

Anderson MacGyver uses concepts and ideas that find their origin in the Business Model Canvas by Alexander Osterwalder and the Value Chain by economist Michael Porter to develop the concept of the OMC. For the theoretical framework, we have deliberately chosen models and theories that are widely known and have been proven in practice.

3.1.1

BUSINESS MODEL CANVAS

In recent years, the Business Model Canvas (BMC) has been the commonly used method for organizations to model their business strategy. It provides a structure to develop and visualize the value proposition of a business. The result of the BMC is a shared view for every actor showing the delivery of the value proposition and the preferred busi-ness model. Customers and the value proposition are key. Only the activities that are key for the delivery of the value propositions are included in the BMC. The collaboration with key partners and suppliers is highlighted, as well as identi-fying the key resources to realize the propositions. The BMC is primarily a means of communication to ensure all parties involved think from the same context and value proposition. The BMC ensures that everybody knows what is important and what is not, that it is clear who the stakeholders are and that every-one has the same goal in mind. The BMC ensures that everybody thinks from the same strategic business perspective, and not from a specific problem definition that often limits potential solutions.

Working from the perspective of the value proposition also increases the number of possible solutions (see Figure 3).

The BMC stimulates, or forces, every participant to think within the same context and sharing the available back-ground information. It helps to eliminate differences in interpretation or in the background in an early stage. Those involved will better understand what is going on in their environment and are encouraged to think about what could be improved. At the strategic level, this offers additional support in making substantiated decisions.

3.1.2

VALUE CHAIN MODEL

Centrally in the development of the OMC is the term ‘activity’ or ‘business activity’. A business activity is something an actor (human, system, machine) performs by using resources (capacity, capital, exper-tise, data) in order to achieve a certain result (product, service, profit, informa-tion). Execution of a business activity requires resources and information.

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ORGANIZATION TECHNOLOGY DATA

Figure 2POSITIONING OF THE OMC

VALUEWEBCREATION OF VALUE FOR THE CONSUMER

BUSINESS MODEL CANVASVALUE PROPOSITION

OPERATING MODEL CANVASBUSINESS ACTIVITIES

STRATEGIC PARTNERS

VALUEPROPOSITIONS

CUSTOMERSEGMENTS

KEYACTIVITIES

KEYRESOURCES

COSTSTRUCTURE

CUSTOMERRELATIONSHIPS

CHANNELS

REVENUESTREAMS

Figure 3 BUSINESS MODEL CANVAS BY OSTERWALDER

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Figure 4 VALUE CHAIN BY PORTER

INBOUNDLOGISTICS OPERATIONS OUTBOUND

LOGISTICSMARKETING AND SALES SERVICE

SUPPO

RT A

CTIVITIES

PRIMARY ACTIVITIES

MA

RG

INFIRM INFRASTRUCTURE

HUMAN RESOURCES

TECHNOLOGY DEVELOPMENT

PROCUREMENT

Activities can be grouped into domains by their nature or function, like procure-ment, marketing or production. Porter differentiates between three types of business activities to indicate their meaning, characteristics and importance for the business execution:

• Primary activities that cover the crea-tion of the product or service, the sales and delivery to the customer, including after-sales activities.

• Support activities required for primary or other support activities that help with the delivery of services that are not specifically aimed at the customer, like resource procurement, technology and human resources.

• Firm infrastructure is not directly related to specific primary or support activities but supports all activities, not only product creation, sales and deliv-ery but also administration, finance and IT infrastructure.

The primary activities directly support the delivery of products and services to customers and are in that respect often distinctive in comparison to other organi-zations. Support activities will normally have a more generic character. They will be very similar within different organiza-tions, especially in the same industry.

The firm infrastructure supports the whole organization, whilst providing a shared context for the primary and support activities. The firm infrastruc-ture needs to be configured in such a way that it offers the appropriate setting for the other activities to function optimally like tech and data platforms.

Business activities deliver results (products, services, and/or data) to other business activities in the company value chain, or to the business activities of customers. In the case of consumers, it will mean a product or service delivered directly to the consumer. The way business activities of the organization are executed (how), is dynamic and is continuously influenced by changes in the business context or in the demand of the customer/consumer. It is therefore important to map the business context and analyse the related characteristics.

These characteristics include – among others – the dynamics in external trends, dependency on time and location, variety and number of specific requirements (e.g., legal, compliance, knowledge) and the degree of diversity of the customer groups that are being served. The processes that are performed within the primary activities produce and deliver the products and services to the customer (see Figure 4). •

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‘The OMC of an organiza-tion shows its value propositions, activities and actors, and offers a common language for business, tech and data.’

CHAPTER 4STRUCTURE AND DESIGN OF THE OMC

The Operating Model Canvas visualizes the foundation of an organization: in essence it shows what the organization does and for whom. This information is called the base layer of the OMC. The base layer does not change much over time, as it depicts the right of existence of an organization. It shows the core of the organization. The base layer can be enriched with one or multiple aspect layers. Aspect layers show more volatile information of the organization, such as financial data, characteristics of busi-ness activities and organizational struc-tures. Aspect layers thus provide a snapshot of a certain moment in time, whereas the base layer provides the film of the organization for the next three to five years. Using this distinction secures a single foundation for communication between business and technology while leaving room for adding situational infor-mation when required. The basis for all specifications remains the same: one mutually supported OMC. This chapter describes the several building blocks of the OMC’s base layer and dives into its overall structure and design. Aspect layers and their application are elabo-rated upon in Chapter 6.

4.1

SCOPE OF THE OMC, CHAIN AND ORGANIZATION

The scope and size of the Operating Model Canvas are determined by identify-ing which products or services the organization delivers to which customer groups and who the most important part-ners are in the chain. To not overcompli-cate the OMC, other actors in the organization’s ecosystem are not displayed. For such analysis, Anderson MacGyver uses the ValueWeb.

Figure 5 ELEMENTS OF THE OMC BASE LAYER

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COMPANY LOGO

STRATEGY PLANNING

CUSTOMERSEGMENTS

VALUE PROPOSITIONS

PARTNERNETWORK

OTHERSTAKE­

HOLDERS

SUPPORTINGBUSINESS ACTIVITIES

CHANNELS PRIMARYBUSINESS ACTIVITIES

CONTROL

VISION MISSION CORE VALUES

4.2

STRUCTURE OF THE OMC – ACTORS, CHANNELS, ACTIVITIES & VALUE PROPOSITIONS

The base layer of the Operating Model Canvas shows the organization’s custom-ers, partners, and stakeholders (actors), the means of interacting with them (channels), the products or services delivered to them (value propositions), and the business activities required to realize these products or services. These items are logically grouped into ten build-ing blocks (see Figure 5).

• Value Propositions: A value proposition is a product or service to the customer. The delivery of this service takes place through interaction between the organ-ization and the customer, in which the organization offers a solution for a customer problem (Grönroos, 2000). Often customers have to perform some activity themselves to experience the service. For example, when a customer withdraws money at an ATM, the deliv-ery of the service takes place where the customer meets the bank system (the ATM). The value of the service is ulti-mately determined by the customer’s experience and judgement: what is the

effort required, is the service adequately delivered, is it secure and reliable, and how is the service appre-ciated? These are typically the areas for further service improvement;

• Primary Business Activities: Primary business activities concern those activities directly contributing to the realisation of the value propositions of the organization;

• Supporting Business Activities: Supporting business activities are activities that support the primary business activities of the organiza-tion, for example by providing the required data to deliver a value propo-sition (e.g. Financial administration) or by hiring employees to perform the business activities (e.g. Human Resources). Firm Infrastructure, as described by Porter (1985), are considered Supporting Business Activities as well;

• Channels: Channels are the means of interaction the organization uses to communicate with customers, part-ners, and stakeholders. Channels can include elements that are digital, physical, or both and are depicted in segments, such as social media, call centre, physical store, corporate website, and portals;

• Customer Segments: Customers are the purchasers and/or consumers of the products and services the organiza-tion offers. Customers can either be consumers (B2C commerce) or other organizations (B2B commerce). Prospective customers can be included in the OMC as well. Customers are depicted in segments, such as business segments (SME, Large, Private, Public), individual segments (age, gender), and personas;

• Partner Network: Partners are external organizations that contribute to the value chain of the organization. Prospective partners can be included in the OMC as well. Similar to Customers, Partners are visualized in categories, such as suppliers, advisors, supply chain partners, and research partners;

• Other Stakeholders: A stakeholder is anyone who has some kind of interest in the business activities conducted by an organization, either internal or external. The OMC depicts external stakeholders because their influence on the organi-zation and/or its value chain should be taken into account by the organization. Prospective external stakeholders can be included in the OMC as well. Examples of stakeholders include governmental organizations, sponsors, non-profit organizations, and unions;

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• Strategy Planning: Strategy planning concerns formulation of the corporate strategy and strategic decision-making. It comprises activities that affect the entire organization, such as, business development, forecasting, enterprise architecture, and portfolio manage-ment;

• Control: Control activities support stra-tegic planning activities by assessing what goes well and what should be improved. In addition, control activities monitor if the organization meets legis-lation or stakeholder demands. Examples of control include govern-ance, reporting, risk management, compliance, and quality management;

• Mission, vision, core values, and client logo: The top building block of the OMC represent the purpose of the organiza-tion and its objectives.

The Value Propositions are placed at the centre of the OMC, as they represent the core purpose of being for the organiza-tion and together with the Channels, connect what the organization does to the recipients of these activities.

The Primary Business Activities occupy the largest part of the OMC. A logical flow of activities is maintained with this build-ing block, by positioning externally

oriented activities such as Sales and Marketing on the left side of the building block. The most prominent activities are shown in the core of the building block and activities are logically grouped together, based on their nature or output. Supporting Business Activities are displayed separately underneath the primary activities, emphasizing their supporting nature. In this block, the externally oriented activities, such as Procurement, are positioned on the left side as well, as close to the external actors as possible. Outsourced primary or supporting activities are visualized on the OMC as well, for the OMC depicts what the organization does, not how the organization does this (for more informa-tion on outsourcing business activities, please refer to the White paper Governing Market Services). It should be noted that Supporting Business Activities are not supportive for every organization. Human Resource Planning, for example, might be a Supporting Activity for a retailer but a Primary Activity for a secondment agency.

Left of the Value Propositions and Channels, the external actors of the organization are listed, creating a mean-ingful link between the outside world and the organization’s products and services.

The placement of Customer Segments, Partner Network, and Other Stakeholders symbolises their importance, since, with-out customers, partners, and stakehold-ers, the remainder of the OMC would cease to exist. The building blocks Strategy Planning and Control are normally placed at the top of the OMC to symbolise their organization-wide impact. To demonstrate the chronologi-cal interaction between the two, Strategy Planning is placed on the left and Control on the right side of the OMC. Strategy Planning purposefully reaches over all other building blocks, stressing its influence on them.

Depending on their size, many organiza-tions will have multiple and diverse value propositions. These are visualized as separate streams of primary activities. Activities that are shared, like firm infra-structure and supporting activities, are displayed independently from these streams. Unlike the Business Model Canvas, the OMC does not only display the core activities but all business activi-ties. The main reasons for this are:

• To create insight into the relation and connectivity between activities, the exchange of information and the stake-holders involved;

• To create insight into the interaction with activities of partners in the chain and of customers – the different chains are mapped and displayed;

• To create a complete inventory and to be able to match business and technol-ogy properly, since technology normally interacts with multiple or even all busi-ness activities;

• To create a grouping of IT services into logical sections based on the charac-teristics of the business activities.

The OMC is meant to visualize what an organization does, not how the organiza-tion does so. Therefore, it is important to realize that the base layer of the OMC does not display the organization of busi-ness activities, nor the processes that lay beneath them. Such information can however be shown using an aspect layer. More on this in Chapter 6.

4.3

DESIGN OF THE OMC – RECOGNISABLE AND PLEASING TO THE EYE

The Operating Model Canvas is a means to develop understanding and a shared vision between the business and technol-ogy of an organization. Therefore, the

OMC needs to be clear, concise, and recognisable for its audience. The look and feel of the OMC are thus almost equally important as its structure and content.

An OMC is designed on an A0-size poster (118.9 cm x 84.1 cm). Using this size ensures an easily legible and visible final

As stated in section 4.1, the base layer of the OMC visualizes the business activities of an organization, not its processes. The rationale for this decision lays in the nature of the difference between the two. Business activities describe what an organization does, i.e., what results the organization delivers to its customers. Processes, on the other hand, describe how these results are delivered to the customer. A business activity is thus supported by one or multiple processes. Since the base layer of the OMC serves to provide an overview of what an organization does, using business activities is the logical way to go.

ACTIVITIES VS PROCESSES

Another reason for choosing business activities over processes is found when looking beyond the initial purpose of the OMC. The base layer of the OMC can be used as a basis for improving the technology landscape of an organization. Business activities can easily be translated to functionality (the what) providing room to find a fitting technology solution without being restricted to a fixed process (the how). This allows implementation of a modular landscape which subsequently can lead to improved flexibility and agility. Using business activities as a basis for analysis therefore yields better results than using processes.

result, whilst allowing to model each of the organization’s business activities, actors, value propositions, and channels. The poster presents the complete organ-

Figure 6 EXAMPLE OF AN OMC FOR A FICTIONAL NON-GOVERNMENTAL ORGANIZATION (NGO)

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Naturally, an actual OMC contains substantially more details as does the reference model (see Figure 6). Details that logically belong together, such as a set of marketing activities, are indicated to be of the same nature using their visualisation. Similarly, equal levels of abstraction across the OMC can be indi-cated by using similar linings and/or by using icons. A group of customers, for example, can be accompanied by an icon of a group of people. Consistency is key here, as it quickly helps the audience to understand granularity and the different levels of business activities on the OMC.

It is important that the organization depicted on the OMC recognises itself in the model and feels it truly represents their company. To that specific end, every OMC is designed using the corpo-rate colours and branding of the organi-zation. Depending on the depth of the corporate style available, the organiza-tion’s colours, logo and even specific visuals are included. Additionally, the texts used on the OMC always adhere to the organization’s jargon. For example, the activity ‘IT Management’ can appear as ‘Technology Management’ on one OMC, as ‘Information Management’ on another, and as ‘IT Management’ on the next one, while basically having the same meaning.

To ensure an OMC is pleasing to the eye, three rules of thumb are always taken into account:

• All elements on the OMC must be mutu-ally exclusive and collectively exhaus-tive. Overlap among elements cannot exist as it has a confusing effect and every (group of) actor, business activity, channel, and value proposition must be represented;

• Visualisations must have meaning and a purpose. Logos support recognisabil-ity, shapes and lines can indicate a group of elements, and icons can prevent the OMC from overflowing with text;

• Consistency in design helps to increase rapid understanding. Using for instance the same shape for all business activi-ties leaves no room for doubt all of them are business activities. Using another shape or even icon for all channels clearly distinguishes them from the aforementioned business activities.

Key in creating a shared vision between business, tech and data is the process of how the OMC is developed. The next chapter elaborates upon this approach and how it contributes to creating busi-ness, tech and data alignment. •

ization at a single glance, which is key in the workshops used for developing the OMC. As an increasing number of work-shops are organized digitally nowadays, alternatives for a printed A0-size poster are found in online collaboration tooling. Both the use of the physical poster and the digital tooling are elaborated upon in Chapter 5.

Any OMC is a cohesive collection of shapes, texts, and icons. The shapes, mostly squares and rectangles, are structured in line with the reference model shown in Figure 5. Not only the relative placement of the building blocks supports the meaning of the OMC’s content. When designing an OMC, the proportion and relative importance of business activities, actors, channels, and value propositions are considered as well and shown via the size and ratio of the building blocks. Just like in the Business Model Canvas, customers for example are segmented in the model based on their importance, like revenue, volume or added value of the segment. If 80% of revenue is with consumers and 20% with business customers, this division is also displayed on the OMC.

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‘The use of corporate colours and branding strengthens the identification of the organization with its OMC.’

CHAPTER 5DEVELOPING THE OMC

The process of developing the OMC is just as important as the OMC itself. Using a method based on co-creation, interac-tion, and discussion ensures that the final product is supported by both busi-ness, tech and data. The process contrib-utes to the development of a shared vision between representatives of busi-ness, tech and data and subsequently business and technology alignment (see Figure 7).

5.1

A FIRST DRAFT OF THE OMC

When developing an OMC, Anderson MacGyver starts with providing the first draft based on its industry expertise, data gained from exploratory surveys sent to representatives of business and technology, and the organization’s docu-mentation. Sources are, for example, the organization’s strategic plan, a Business Model Canvas from the industry or even the organization itself, and architecture documents. If no such information is available or to complement any docu-mentation received, key stakeholders from business, tech and data can be consulted in addition to the data gather-ing described above. All gathered infor-

mation is then analysed for key statements; declarative wordings expressing the corporate and digital strategy or strategic direction. These key statements are used as input for the OMC, since both the key statements and the OMC (aim to) express the client’s vision on strategy and organization. All of the above leads to the first draft of the OMC, which is the focal point of the first workshop.

Figure 7 THE APPROACH FOR DEVELOPING AN OMC

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PREPARATIONAND FIRST DRAFT

PHASE

ACTIVITIES

RESU

LT

COLLECTING DOCUMENTATION_

CONDUCTING EXPLORATORY SURVEYS

_CONDUCTING INTERVIEWS WITH KEY STAKEHOLDERS (OPTIONAL)

_ANALYSE DOCUMENTATION FOR

KEY STATEMENTS _

DRAFT THE FIRST VERSION OF THE OMC BASED ON COLLECTED DATA

WORKSHOP PREPARATIONS (IN ACCORDANCE WITH

STAKEHOLDERS WHEN NEEDED)_

EXECUTION OF WORKSHOPS UNTIL STAKEHOLDER AGREEMENT HAS

BEEN ACHIEVED_

ITERATIVELY DEVELOPING THE NEXT VERSION OF THE OMC BASED

ON OUTCOMES OF EACH WORKSHOP

_UPDATING A BOOKLET WITH

DESCRIPTIONS OF ALL ELEMENTS OF THE OMC

FINALIZE THE OMC_

PRODUCE FINAL BOOKLET WITH ALL ELEMENTS OF THE OMC

EXPLAINED_

DEMONSTRATION AND EXPLANATION OF THE OMC TO

OTHER STAKEHOLDERS (OPTIONAL)

SHARED VISION ON BUSINESS ACTIVITIES

_FINAL VERSION OF THE

OPERATING MODEL CANVAS_

BOOKLET WITH OMC DESCRIPTIONS

GROWING UNDERSTANDING OF STRATEGY AND BUSINESS

ACTIVITIES AMONG BUSINESS, TECH AND DATA

COLLECTION OF DOCUMENTATION_

COLLECTION OF KEY STATEMENTS DEMONSTRATING THE (DIGITAL)

STRATEGY_

FIRST DRAFT OF THE OMC

DEVELOPING THE OMC FINALISATION

5.2

THE FIRST WORKSHOP

Workshops are key in the development approach of the OMC. They ensure direct involvement and contribution of partici-pants and facilitate room for conversa-tion and discussion. During the workshops, business, tech and data collaborate to develop a shared vision and model of all business operations. From the first workshop on, the OMC is set to support this collaboration.

After getting acquainted and briefly reca-pitulating the purpose and principles of the OMC, the workshop truly starts by validating the key statements that were extracted from the client’s documenta-tion. This is an important step since the key statements are the main representa-tion of the organization’s strategy and the main source of input for the OMC. They help to understand the strategic interest of activities and stakeholders. Generating support for the key state-ments is thus a prerequisite for generat-ing OMC acceptance. Once the key statements are discussed, the first version of the OMC is validated with the workshop participants.

The large A0-size poster allows for a group of ten people to actively stand in front of it to discuss. This way, the group members can effectively debate the content, providing everybody with the opportunity to use the OMC to support his or her views. As such everyone is using the same context to communicate and discuss. Additionally, participants are asked to make their remarks on the poster, using post-its or permanent marker. This ensures all participants can voice their opinion and everyone is heard. Alternatively, the workshop can be conducted digitally. Especially when not all participants are able to join the work-shop physically, this provides a fitting solution. In a digital workshop, all partici-pants join from their respective devices, and the OMC is presented by utilizing online tooling. This enables participants to add digital stickers and notes to the OMC, thus securing the interaction part of the workshop. Asking the participants to place their input on the OMC does not only facilitate a discussion that enables alignment among business, tech and data. It also generates a feeling of contri-bution and ownership of all participants. The OMC becomes a shared result of business, tech and data. Outcomes of the workshop discussions are captured in a booklet providing the agreed upon defini-

tions for all elements on the OMC. This prevents miscommunication among the participants and provides a common ground for further discussion.

The OMC, either physical or digital, provides concrete context and quickly facilitates discussions about the content. Common grounds and shared views develop since all participants continu-ously see the complete picture. People do not get the chance to fall back into System 1 thinking, or to limit their discus-sion to their own domain. The complete organization is displayed on the OMC which stimulates employees to think about it as such.

5.3

ITERATIONS & FINALISATION OF THE OMC

Inputs given by the participants during the first workshop are used to improve the original draft OMC and increase its fit with the organization in terms of the content and corporate branding. Terminology is sharpened, activities are moved around, and actors are specified more in-depth. These adaptations result in the next version of the OMC and its

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accompanying booklet, which are taken to the second workshop. Preferably the same participants of business, tech and data attend the session to prevent the repetition of discussions. The process of revising the OMC and conducting a work-shop is repeated a couple of times. The first few iterations will usually contain large modifications, influencing the structure, visualisation, and content of the entire OMC. Over the course of the development of the OMC, however, modi-fications will become less significant, often solely addressing small textual adjustments. Often three workshops, including iterative improvement of the OMC and its booklet, suffice for a good result. This enables a high level of partic-ipation of those involved, rapid improve-ment of the quality of solutions through the different perspectives and strong delivery of shared results by effective communication and common under-standing.

The final OMC is created in accordance with the client. This wrap-up entails that final touches, mostly layout-related, are applied to the OMC. The final result is an approved and supported overview of the business activities of the organization in their context.

Often during the last workshop(s) time is spent to start creating relevant aspect layers on top of the almost finished base layer of the OMC. The next chapter demonstrates the various applications of these aspect layers. •

CHAPTER 6APPLICATION OF OMC: ASPECT LAYERS AND EXAMPLES

The OMC has not only proven itself as an effective tool that can be used by differ-ent departments to talk with other stake-holders about issues regarding the activities a company deploys. It is a valu-able means to develop a tech and data strategy driven by a business perspec-tive. This digital strategy can be used to make the proper decisions about tech-nology investments and the incorporation of tech and data in the business. To build strategies the OMC can be used to further analyse specific aspects in separate layers on the base layer of the OMC. These additional layers are called aspect layers and show a specific in-depth anal-ysis on the base layer of the OMC. Each strategic endeavour requires its own specific analysis and so there is a variety of aspect layers possible dependent on the strategic challenge. We present some examples, but these are not limited to:

• Multimodality characteristics: the modality of an activity shows two important characteristics of a business activity. It helps an organization to see at a glance which activities are directly creating value for the customer and which activities merely support the business operations and have a focus on efficiency and results. Secondly, it shows whether the activity has a

generic nature or if it has a specific nature for the organization. Specific activities distinguish the organization from other companies and these are typically the areas for investments, or activities that are de-facto specific due to specific business requirements, compliance to legalities or specific circumstances. The concept of modal-ity is described in White paper Organizing Data and Technology. An example of the activity modality analy-sis aspect layer is provided in Figure 9;

• Organizational aspects: with an addi-tional layer on the OMC, the allocation of staff and skills among business activi-ties can be highlighted; another exam-ple is showing the differences in dynamics of different activity domains. Some are relatively stable over time, others are highly dynamic. Such an analysis can be used to structure a digi-tal organization (sizing of the organiza-tion and roles) or to show the impact of reallocating staff due to changes in business activities by making an over-view of the actual situation or the to-be situation;

• Application aspects: creates an over-view of systems and applications mapped to the business activities they support. This analysis gives a graphic insight into redundancies and other

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inconsistencies in the application port-folio. It helps to make decisions from a business value point of view on stand-ardization of the application portfolio and to direct investments in new devel-opments. If the application rationaliza-tion is done in combination with enterprise architecture, this will help to set up a roadmap for the renewal of the tech infrastructure in line with the business perspective;

• Grouping and clustering of activities: an aspect layer showing logical group-ings of business activities (e.g. applica-tion or functional domains) to support for example the selection of tech and data solutions. Based on the multimo-dality characteristics of business activ-ities, investment decisions can be made for solutions fitting the modality of each business activity. For example, a generic business activity is best served by a standard solution; high-value im -pact activities might be best suppor ted by bespoke solutions and run in-house. An example of an OMC with functional domains is provided in Figure 11;

• Portfolio management aspects: a visualisation of projects or programmes mapped on the business activities, clar-ifies for all parties involved where the focus lies and what the dependencies and interconnections of projects are;

• Data aspects: a data layer as an addi-tional layer on the OMC shows which activities are using what (master) data sets, which activities have ownership or are creators and how data governance is organized over the various business activities. In addition, data quality aspects can be added;

• Financials aspects: cost figures and investments can be displayed on a financial aspect layer This will give a graphic insight into how the money flows and – in combination with finan-cial targets – where the managerial focal points are. In relation to the port-folio layer, it is easy to see if the alloca-tion of financial means is in line with the importance of the business activity and its targets;

• Resource and sourcing aspects: For each type of resource (capabilities, personnel, company assets, IT infra-structure, applications) the model can demonstrate which resources are required for the execution of the busi-ness activities. In combination with the modality characteristics of each activ-ity (or group of activities) the impor-tance of each resource is made visible. The result shows clearly which business activities are strategically important to keep in-house (value-creating, highly specific), potentially with the help of

business partners for additional exper-tise, and what resources could be resourced externally (generic, common);

• Opportunities and Issue aspects: an additional layer to summarize the main opportunities and issues within the business, typically clustered by activi-ties domains in showing their tech, data, and organizational issues and opportunities. •

Figure 8 (page 32)THE OMC OF A HOUSING CORPORATION

Figure 9 (page 33)THE OMC OF A HOUSING CORPORATION WITH MULTIMODALITY CHARACTERISTICS

Figure 10 (page 34)THE OMC OF AN ORGANIZATION IN THE CON -STRUCTION & INFRASTRUCTURE INDUSTRY

Figure 11 (page 35)THE OMC OF AN ORGANIZATION IN THE CONSTRUCTION & INFRASTRUCTURE INDUSTRY WITH FUNCTIONAL DOMAINS

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CHAPTER 7CONCLUSIONS

Anderson MacGyver has often used the Operating Model Canvas with many clients in a wide variety of industries. The OMC makes it clear to everyone what the company mission is, what the business does, what it produces and what its services are, and where and to what extent tech and data support this mission. The OMC provides insight into required investments in tech and data, in what those investments should yield, and how this can best be organized by making use of the opportunities offered by tech and data. The tech and data organization must primarily support the corporate vision and ensure that tech and data function as a driver for the company. In order to find the best solutions, an inten-sive collaboration between business, tech and data is of utmost importance.

The most important contribution of the OMC is that the OMC provides a tool for a better understanding and collaboration between business, tech and data so that the opportunities to deploy tech and data in a valuable and strategic way can be increased. The creation of an OMC shapes the right preconditions to achieve the required collaboration and ensures that business activities and tech and data are interconnected, builds a shared understanding of the business, and

develops one vision. It provides essential information to determine a strategic agenda in using diverse aspect layers for tech and data; all founded on the shared business strategy and envisioned busi-ness operations for tomorrow: business drives tech and data and not vice versa.

An OMC is always developed together with our clients who, afterwards, strongly feel it is truly their organization, their business, that is represented in the model, especially when brand style and colours of the company are used. Together with our clients, we have been able to experience in practice what results can be achieved by bringing busi-ness and technology together: the outcomes keep amazing us every time! •

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‘The strength of the OMC is a shared vision of the operational model of business for all involved.’

ABOUTANDERSON MACGYVER

Anderson MacGyver supports its clients in creating business value through estab-lishing digital strategies, implementing business focused and agile technology organizations, and selecting the right ‘fit for purpose’ solutions and technology partners. By doing this, we help our clients with their digital transformation.Essential to the digital transformation is a clear roadmap for a future where companies use data and technology to create a competitive advantage. Anderson MacGyver challenges the busi-ness strategy of clients and helps define their strategic digital agenda.

NEW BUSINESS MODELS

Markets are changing rapidly; existing business models are under a lot of pres-sure and put to the test by radical new business models delivered by new digital organizations (e. g. ‘Uber’ or FinTechs). During the last decade, the increasing pressure on efficiency has caused IT environments to become outdated resulting in business managers being dissatisfied with their internal IT organi-zation. Smarter use of information becomes the key enabler of new busi-ness models.

PARTNERING WITH THE BUSINESS

At Anderson MacGyver, we believe that IT organizations should primarily act as a business partner and continuously think and act in terms of added value to the business and its clients. As a result, opportunities involving technology and information will be seized more effec-tively. No longer ‘IT and the business’, but working together in multimodal teams towards a single vision and strategic approach to the client.

DIGITAL TRANSFORMATION

Anderson MacGyver is dedicated to helping clients with their transformation towards the digital future. A future in which organizations leverage data and technologies to create new opportunities and gain a competitive advantage, and possess the organizational adaptability to respond to and grow with the develop-ing society and markets. Anderson MacGyver operates as a change agent throughout all stages of digital transfor-mations.

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ANDERSON MACGYVER AS A TEAM

Anderson MacGyver supports organiza-tions with its own authentic approach to achieve the envisaged goals. We initiate innovation with true passion and establish a challenging and exciting strategic digital agenda together with our

clients. The business is ready to become a leader in the digital world of tomorrow thanks to the resulting modern and focussed organization. We are commit-ted to helping our clients and making the necessary changes to their organization.We are recognised for the seniority, drive,

and experience of our teams and their commitment to making an impact. Applying our methodologies, based on the latest scientific insights, we are passionate about initiating innovation and helping our clients transform. •

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ADDITIONAL RESOURCES

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‘The process of co- cre ation, interaction, and discussion is key to realizing shared understanding among business, tech and data.’

‘The OMC builds bridges between business, tech and data.’