Enterprise Landscape

The Enterprise Landscape is a "blue marble"– Earth as seen from the Moon – view of the Enterprise. Its purpose is to provide an overview of 1) the nine principle variables that define the Enterprise as a "trade space" and 2) the key analytic strategies operating on those variables for the primary purpose of maximizing the yield on cost for the trade space as a whole.

Simply put, yield on cost is the result of making trades among resource alternatives [right side of the Landscape] that maximize the value received by a constituency [left side of the Landscape]. "Good" resource trades, say between new technology investments and incremental people costs, are trades in which marginal value delivered by the trade space to its constituencies exceeds marginal cost. The "best" trades are those that increase marginal value while decreasing cost.

The Enterprise Landscape is also referred to as the Strategic Capabilities Framework (SCF), because it introduces "core capabilities" or "core competencies" as a pivotal variable for effecting the yield on cost. The purpose of this variable is to focus trades on those areas of operation which have the greatest impact on performance of the trade space as a whole.

Interpreting the Framework:

The Landscape is divided into two Divisions: the Description Division and the Analysis Division. The Description Division describes the internal organization basically as a "trade space." The Analysis Division describes the analytic processes which are used to optimize trades. Together, they define the organization's "management doctrine."

Description Division:

There are three interrelated aspects to the Landscape Description Division – Demand, Supply and Yield – each of which comprises specific variables.

The Demand side of the Landscape identifies the organization's Customers – those who receive value from the Enterprise and aligns Customer Requirements with Lines of Business (LOB) created to satisfy a specific set of those requirements. Satisfying Customer Requirements provides specific metrics for each LOB. Each LOB has a set of processes comprised of Tasks/Activities that are engineered specifically to service its assigned Customer Requirements.

On the Supply side, Enterprise Resources and Cost are organized into Systems and Systems of Systems. These supply System Functions and Services to meet the Task/Activity demands and performance requirements of the LOB processes.

Yield is the ratio of Value Delivered (Demand) to Cost Incurred (Supply). It is measured in terms of Core Capabilities which specify those high payoff skill areas required to maximize the yield on cost. The Value assigned to a Core Capability increases with the number of LOB's and associated Customer Requirements it supports. Each Core Capability is "value costed" based on the totality of the resources it employs. The result is an overall performance management roadmap which uses Core Capabilities as a primary variable for effecting the yield on cost.

Analysis Division:

The Landscape Analysis Division is typically constructed by synthesizing specific analytic tasks into a coherent "trading system" which produce "analytic products" [sometimes called "reports"] whose purpose is to "inform" decision-makers regarding the optimum trades.

Typically, the principle "analytic tracks" in a trading system include in some form: Operational Effectiveness Analysis, Functional Efficiency Analysis, Yield Analysis, Risk Analysis, Capital Planning, Budget Analysis, and Acquisition or Outsourcing Analysis.

The optimum structure for any trading system is as a Repeatable Analytic Process (RAP). Repeatability is critical to ensure quality of result. Repeatability is achieved by means of two primary rules: 1) Each analytic product must be documented with Analytic Lines of Sight (ALS), and 2) All Analytic Lines of Sight must be constructed on a common data "protocol."