Strategic Planning with VDML

The OMG (Object Management Group) Business Motivation Model (BMM) defines a framework for the capture of strategic planning information.  This framework reflects widely accepted strategic planning techniques.  The resulting strategic plans define requirements for business changes, but there remains a significant gap between these requirements and the realities of implementation.  VDML (Value Delivery Modeling Language) can help bridge this gap through a more rigorous specification of the current state of the business and the future, desired state. See Value Delivery Modeling Language: An Update for an overview of VDML.

In this article, I will begin with a brief overview of BMM and then discuss the application of VDML to further detail and refine the strategy and to support transformation planning and management.

Overview of BMM

The diagram, below, is an abstraction of the Business Motivation Model (BMM) taken from the OMG specification.  I will briefly discuss the Means and Ends that represent a strategic plan.  Influencers and Assessment are elements of the strategic planning process that provide input for development and refinement of the plan, but they are not, per se, elements of a strategic plan.

End

The End contains elements that define the desired future characteristics of the enterprise including the Vision and Desired Result.

Means

The Means contains elements that describe how the future state of the enterprise will be achieved including Course of Action and Directives.

Vision

A strategic plan, at the most abstract level, is expressed as a Vision of what the enterprise wants to be and how it wants to be perceived.  This is complementary to the Mission.

Mission

The Mission expresses why the enterprise exists--what it wants to accomplish.  Successful pursuit of the Mission should support realization of the Vision.  

Desired result

The desired result consists of Goals and Objectives.

Goal

A goal is a long-term, qualitative result that the enterprise may already be pursuing or that may be advanced as a result of a business challenge or opportunity.  It defines a purpose for the strategy.

Objective

Objectives are specific, measurable results to be achieved by a strategy and support enterprise goals.  While there may be many measures of performance, objectives focus on selected, key measurements that reflect progress toward the strategy and goals from a management and investor perspective. 

Course of Action

A course of action is the approach to implementation of the Mission in pursuit of the Goals and Objectives.  It consists of Strategy and Tactics.

Strategy

A strategy defines how the mission will be pursued and objectives will be achieved.  In conventional strategic planning, it is an abstract description of how the enterprise will operate in the future.  Typically, there will be multiple aspects to a strategy, potentially representing the integration of different ideas.

Tactic                                       

Tactics are incremental changes to the state of the enterprise that lead to the desired future state required by the Strategy.  The distinction between strategy and tactics is somewhat subjective.  Tactics will focus on resolving particular problems and steps toward implementing related changes. 

Directives

Directives are the business policies and business rules that are to be incorporated in the future state of the enterprise.

Business policies

Policies are statements of business operating requirements.

Business rules

Business rules define operating criteria or constraints in specific circumstances.  Business rules implement business policies.

Application of VDML

In my previous post, I gave a brief overview of VDML: Value Delivery Modeling Language: An Update .  Here I will focus on the application of VDML for the refinement and implementation of a strategy.  This is not intended as a standard method, but illustrates how VDML can be used to improve the discipline and rigor of strategic planning and transformation.
VDML does not address all aspects of a business transformation.  I expect that VDML will be used to support strategic planning and transformation program management for the operations and capabilities of the business.  It will be complemented by related efforts such as development of policies, analysis and development of markets, design of incentives and development of contractual relationships. 

Development of a single idea

In this section, I will define an approach for development and implementation of a strategy for one idea.  I the next section I will extend this to consider multiple ideas in an on-going business transformation.
The basis for consideration of changes is a VDML As-Is model.  This represents the current state of the business and will contain measurements reflecting current business operations.  The current set of measurements may be in a VDML scenario with another scenario set of measurements representing target measurements.  The As-Is model may actually be a composite of VDML models representing different parts of the business.  The important point is that the current business design and measurements, including value propositions, are established as a basis for evaluating and planning changes.  It provides a context for understanding problems and assessing solutions.

An idea is a potential strategy at an inspirational stage of development.  When that idea is refined, validated and accepted, it becomes a strategy (or a component of a more complex strategy). We start with consideration of one idea to improve the business.  We will focus on aspects of the idea that involve changing the operation of the business.  This may include the impact of new technology, changes in capabilities, activities, resources (including personnel and their skills), organizational changes and the implications to value propositions (potentially multiple market segments).   The diagram, above, depicts steps of development of an idea through transformation of the business.  I will discuss each of these steps in the paragraphs that follow.

1.      Model alternative implementations

I will assume that there are alternative approaches to implementation of the idea under consideration.  Each alternative should be modeled as a VDML To-Be model.  The VDML model will support analysis of the idea to define a cohesive impact on the organization, capabilities, activities, resources, value contributions and value propositions, potentially including business partners. 
Each To-Be model may include new capability methods, some new activities and stores, elimination of some old activities and stores, changes to existing capabilities, changes to organization structures, additions/deletions and changes to business items, changes to staffing and possibly some new types of value measures.  These To-Be models are both the basis for validation and refinement of the idea and for selection of the preferred implementation alternative.  Note that VDML provides the ability to assess changes from an enterprise perspective such as the impact of changes to a shared capability used by other lines of business.
VDML measurements are based on a unit of production.  Consequently, capacity requirements for resources and facilities must be computed by multiplying such measurements by projected production volumes.

2.      Select from alternatives

Each alternative To-Be model is compared to the As-Is model to identify the changes required.  On the surface, this will likely involve changes to activities and associated capabilities, but these may require organizational changes and training or replacement of personnel to obtain necessary skills.  Capabilities may require new or expanded facilities.  The To-Be model provides the basis for estimating activity value contributions as a result of the changes along with their impact on value propositions.  It also provides the basis for estimation of transformation costs and duration.  These measurements, along with other, non-VDML factors will be the basis for selecting an alternative.  Even if there are no alternatives, this is an essential step for the steps that follow.

3.      Define implementation phases

An idea is now a strategy for which an implementation plan must be developed.  VDML will provide the basis for planning the work of transformation.
A plan should have phases of implementation for partitioning and managing work.  Phases should define incremental development and potentially achieve short-term benefits rather than waiting for full implementation of an idea to evaluate the work and realize the desired benefit.  This also provides the opportunity for periodic re-assessment and adjustment of the strategy for changed circumstances.
The changes identified in step 2, above, must be organized into implementation phases.  Each phase will have a package of changes to be implemented together.  Some changes may be dependent on others—the VDML deliverable flows will help identify these dependencies.  Some changes may achieve greater benefits than others.  The priority of changes may be affected by the benefits as well as the availability of funding or resources.  Each phase should achieve implementation of a stable business state that can be measured.  If possible, each phase should yield business benefit.

4.      Model next phase To-Be

Transformation program management will iterate over the current and remaining steps for each phase of the strategy implementation.
Prior to each phase, a To-Be model is developed or refined for the next phase.  The To-Be model incorporates the activities, capabilities and resources to be developed in that phase.  This, in turn, identifies the organization units responsible for the changed business operations as well as the organization units of related activities that will require collaboration and coordination.
Based on the phase To-Be business design, a project plan is developed for the phase.  This will define cost and duration targets for the transformation work along with a timetable for transformation resource requirements.

5.      Define phase objectives

Each phase should have defined objectives for affected organization units as well as the overall impact of the undertaking.  An idea may affect multiple market segments and thus multiple value propositions.  The phase To-Be model includes measurements for the expected value contributions of activities that are affected by the transformation. 
Changes to value contributions for each affected activity will be targets for performance by the organization unit that provides the supporting capability.  Where capabilities are engaged through delegation, organizations responsible for each level of delegation will have target measurements to meet.  The impact on aggregated values will be targets for the overall undertaking for the enterprise or the targeted line(s) of business.

6.      Implement the phase plan

This step involves doing the work of transformation.  Each phase may be managed as a separate project with a detailed plan.  The project must address all aspects of the transformation for that phase including changes in products, technology, organization, personnel, facilities, information systems, and activity inputs and deliverables.  Some aspects are beyond the scope of a VDML model, but the VDML model will help identify them.

7.      Evaluate objectives

At the end of each phase, an As-Is model is created as a new baseline.  This model should be very similar to the To-Be model for the phase, but the measurements are actual value measurements.  These measurements are compared to the To-Be expected value measurements to evaluate success of the phase.  The As-Is and To-Be models may be two VDML scenarios since they should have the same structure but with actual vs expected measurements. 
While the implementation effort may be completed, there may still be work required to stabilize and optimize the capabilities, so there may be some additional time allowed to achieve the targets.  In the meantime, work may proceed on the next phase, returning to step 4, above.
When the last phase is completed, the overall success of the strategy and transformation can be evaluated by comparing actual measurements of the final As-Is model to the expected measurements of the final To-Be model.

Transformation as a continuous process

In the real world, enterprises do not focus on the implementation of one idea at a time.  As some ideas are being implemented, other ideas will emerge.  These new ideas will affect some of the same business elements undergoing transformation.  Some ideas will be completed while work on other ideas remains to be done.
Consequently, a strategy may include multiple ideas that must be reconciled, and it may evolve to include new ideas over time.  A VDML model supports analysis of the application and integration of these ideas to achieve a coherent strategy.  The definition of tactics and assignment to teams could result in different interpretations and implementations of the strategy, but a VDML model can provide a shared context for identification and resolution of potential inconsistencies. 
The following paragraphs extend the above transformation steps to reflect on-going, continuous transformation for implementation of multiple ideas.  The numbers in parentheses indicate the affected steps in the above diagram.

Evaluate To-Be alternative models (2)

A new idea may be evaluated and change requirements identified based on the current As-Is model, but the overall evaluation should also consider changes already planned for other ideas that affect some of the same business elements.  This extension effect can be assessed by using the To-Be model for completion of the current, composite strategy so that any planned changes are included in the baseline for the new idea.  Note that there may be trade-offs with the implementations of adopted ideas to be considered in solutions for each new idea.

Align changes to phases (3)

The changes for the new idea must be reconciled with the To-Be models of pending phases of the current strategy, and the program plan must be updated to reflect these changes.  If there are no related changes, then implementation of the new idea may be considered as an independent effort.  When changes affect some of the same activities and supporting capabilities, there must be a determination if they should be included in an existing phase or will require a distinct phase.  This may be affected by the priority of the idea, funding, resource requirements, or other factors such as risk and scope of change.  Changes to the work of existing phases may result in new dependencies and thus require changes to the order of pending phases.

Revise phase To-Be model(s) (4)

Based on the alignment of new changes to pending changes, a To-Be model must be developed or adjusted for the current phase or at least the next phase.  To-Be models for additional phases may be deferred, particularly if the work of pending phases or new ideas are likely to result in adjustments to the model.
The next phase To-Be model is important, as before, for development of expected value measurements for the phase.

Revise phase objectives (5)

To the extent the next phase is expected to achieve different results with the newest idea, it will be necessary to reconsider which value measurements are key to evaluation of success of the phase.

Ideas completed (6)

In a continuous transformation environment, implementation of some ideas will be completed while work on other ideas continues.  When the changes for an idea are completed, the result should be evaluated against the To-Be expected value measurements of the original idea.  The targets should be at least achievable in the near future (allowing for stabilization of operations), or exceeded if changes for other ideas have contributed improvements.

Conclusion

A VDML To-Be model for a strategy and the series of To-Be models for each phase of the implementation define requirements for transformation of the business.  The phases reflect priorities and dependencies between changes.  The To-Be model for a phase reflects the expected impact on the value measurements, activities, capabilities, organizations and resources affected.  Value propositions provide the basis for consideration of the competitive impact of the phase.

The effort to implement these phases must be defined in a transformation plan.  This plan might be defined as a program plan with plans for phases defined as project plans.  The requirements defined by the strategy To-Be model are the basis for the more detailed design and development of resources, business processes, organization roles and responsibilities and performance measures.    

VDML also provides the basis for definition of BMM Objectives.  Implementation phases as well as the final To-Be model provide a basis for estimating costs and durations, and the expected value contributions and impact on value propositions.  Key measurements or milestones should be identified as strategic planning Objectives of the BMM Desired Results.

The To-Be VDML models provide insight on requirements for IT support and system changes, for application of business policies and rules, and for consideration and mitigation of risks.

Application of VDML will bring a change to the way strategic planning and business transformation are performed.  Not only will it enable better planning and monitoring, but it will enable more effective management of complex and multi-faceted transformations needed to keep up with rapid changes of business and technology.

Acknowledgements 

My work on alignment of VDML with BMM and support of strategic planning has been in collaboration with Henk de Man, Director of Research at Cordys.