Pioneering Business Models through Business Architecture Transformation BMT 3.0 Overview

© 2015 Cordial Business Advisers AB Cordial’s framework for Business Architecture 2 Business Strategy Business Processes Business Models IT Service Application Information OrganizationManagement Q2 Q4 Q1Q3

© 2015 Cordial Business Advisers AB Cordial deploys a holistic methodology framework to analyze, innovate and realize business models. Our approach is based on a conviction that competitive and flexible business models are deployed by grasping the significance of the entire business architecture, including industry dynamics, strategic choices and the structures underpinning a modern organization. Cordial’s approach to defining, analyzing, innovating and realizing competitive business models has been deployed within leading companies in the telecoms, energy, banking, insurance, travel, retail and forestry industries. We know – and consider – that sustainable results are a function of both the quality and the acceptance of the solution. Our approach enables operational execution 3 R=  (S,A)

© 2015 Cordial Business Advisers AB Sustainable results are a function of the quality of the solution (S) and its acceptance within the deploying organization (A) 4 R =  (S,A) 4

© 2015 Cordial Business Advisers AB We compress the time to realize the desired transformation by deploying a structured and ”battle tested” approach 5 5 TRANSFORMATION DESCRIBE END STATENAVIGATE JOURNEY Value Year 123 END STATE REALIZE EFFECTS CURRENT STATE Desired journey Actual journey Our promise BMT enables you to lead successful transformations by deploying a structured and ”battle tested” approach that ensures: Time compression of the journey Time compression of effect realization by improving organizational acceptance (more people changing working practices and behaviors)

© 2015 Cordial Business Advisers AB The Business Architecture Framework creates a holistic platform for successful transformation The need for a transformation can be triggered by many factors, e.g. changing industry dynamics and customer behaviors/needs, changes to shareholders` agendas and directives, new strategies, cost pressures or significant IT replacements. Regardless of the triggers, a transformation has consequences for all parts of the business. The business architecture framework helps us understand the consequences of the transformation in all relevant areas, as well as the changes needed to arrive at a new end state. 6

© 2015 Cordial Business Advisers AB The business model is the unique structure that realizes a business idea 7 A business model is a conceptual tool that contain a set of components and describe their relations and interconnections in a way that makes the business logic of a specific firm visible and concrete. It is a description of the value a business activity offers one or several segments of customers, and a description of the value the business architecture and the partner network create, market and deliver and which generates profitable and lasting revenue streams. Processes, competences, structures Value proposition Customer segments, channels, relations CostProfitRevenue

© 2015 Cordial Business Advisers AB How big a transformation is necessary to realise the desired end state? 8 TRANSFORMATION

© 2015 Cordial Business Advisers AB The transformation to the desired end state is the sum of the gap in each dimension of the business architecture 9 STRATEGY BUSINESS MODEL MANAGEMENT PROCESSES ORGANISATION IT

© 2015 Cordial Business Advisers AB ANALYSIS OF BUSINESS MODELS INNOVATION OF BUSINESS MODELS DESIGN OF BUSINESS ARCHITECTURE REALIZATION OF BUSINESS MODELS BMT3.0 Business Model Transformation in four phases 10 ANALYSISINNOVATIONDESIGNREALIZATION

© 2015 Cordial Business Advisers AB BMT3.0: Structural clarity, improved agility 11 ANALYSISINNOVATION DESIGN REALIZATION

© 2015 Cordial Business Advisers AB High level description of the four phases 12 ANALYSIS OF BUSINESS MODELS Based on a solid understanding of industry dynamics, the analysis phase builds a platform for fact based innovation. With a structured analysis of market forces and the current portfolio of business models, we can identify key areas for innovation. It is necessary to fully understand the strategic intent and how it may need adjustment as a consequence of the desired end state. INNOVATION OF BUSINESS MODELS Successful innovation of business models presumes a deep understanding of the true needs of prioritized customer segments and how to meet these needs with attractive value propositions. The chosen value propositions are realized through carefully crafted business models. The new portfolio of business models must be capable of achieving the desired end state as well as delivering the overall strategic objectives. DESIGN OF BUSINESS ARCHITECTURE Clearly defined strategic business requirements are the centerpiece for the effort of designing the enabling structures that will operationalize the revised portfolio of business models. The design phase zooms in on business processes, capabilities, organization, competencies, governance models, information, IT and other infrastructure. Based on the strategic business requirements, we describe a target architecture for the enabling structures. This becomes the baseline for design a realistic, realizable solution architecture. REALIZATION OF BUSINESS MODELS Realization presumes a structured approach that understands and includes three main elements: the newly designed business architecture, the receiving line organization and the transformation organization. The sustainable result of a business model innovation is a function of the quality of the solution and the level of acceptance among all relevant stakeholders. ANALYSISINNOVATIONDESIGNREALIZATION

© 2015 Cordial Business Advisers AB Transformation of business models in four phases 13 Analyze the market and the competitive landscape Verify & update the strategic intent and the desired market position Identify and describe the current business model portfolio Analyze the identified business models and business model portfolio Define the desired position and strategic goals per business model A1 A2 A3 A4 A5 Segment customers and understand their needs, behaviors Define concrete and attractive value propositions Identify enablers for future business models Suggest new or redesigned business models Detail and prioritize new and redesigned business models I1 I2I2 I3I3 I4 I5 Define and prioritize strategic business requirements Survey existing supporting structures Determine the required degree of transformation in each structural dimension Design ideal architecture Design solution architecture D2 D3 D4 D5 D1 ANALYSISINNOVATIONDESIGN Build a change strategy and design its implementation Organize and mobilize the available organizational resources Establish structural preconditions for the change Drive execution of the change. Reinforce the change to secure sustainable results R1 R2 R3 R4 R5 REALIZATION

© 2015 Cordial Business Advisers AB ANALYSIS OF BUSINESS MODELS Market and industry analysis Strategic intent and desired market position Identified and analyzed business models and business model portfolio Objectives and desired end state per business model Deliverables per phase 14 INNOVATION OF BUSINESS MODELS Customer segmentation Customer needs analysis Crisp and attractive value propositions Designed and tested future business models DESIGN OF BUSINESS ARCHITECTURE Strategic business requirements Survey of existing supporting structures – processes, capabilities, organization, competencies, governance, information, IT support and other infrastructure Analysis of the necessary degree of transformation in each structural dimension based on each business requirement Target architecture for the enabling structures Solution architecture for the enabling structures REALIZATION OF BUSINESS MODELS Program directive including business case and other documentation needed for executive decisions Program organization Project plans for the various projects/initiatives Change strategy Selected methodologies and tools to drive the change program Realized initial change Sustainable change ANALYSISINNOVATIONDESIGNREALIZATION

© 2015 Cordial Business Advisers AB Developing capabilities and mobilizing enablers for successful transformation of business architecture 15 Initiate the transformation Provide architectural support for the transformation Lead the transformation Develop capabilities that can drive successsful transformations