The Virtues of the Continuous Value Operating Model

October 10, 2018 Andy Anguelo
"No problem can be solved by the same consciousness that created it. We need to see the world anew."  — Albert Einstein
 
Regardless if your company is operating a strategic platform through a delivery team or a Center of Excellence, the current trend is shifting toward better-operating models than those of years past. Traditional operating models focus on taking requests and making changes. 
 
Relying on these antiquated models foster problems like internal alignments, adoption, and loss of value to technology investments. Let’s review the traditional model devaluation and compare it with the virtues of the continuous value operating model.

Qualifying the trend

The Appirio CRM Strategy Services team often sees the damage from traditional operating models by way of client platform assessments. In-depth analysis of environments and architectures often reveals problems, requiring costly remediations and commonly indicating a lack of business readiness and internal alignment challenges. The root cause of these problems can be traced to the decisions going into technology investments. Unfortunately, for these organizations, continuous delivery does not equate to continuous value.
 
Closing the Experience Gap to Achieve Long-Term Value Chart
 
A company’s traditional operating model deteriorates through a reactive or tactical cycle, an ineffective methodology consisting of reactive requests followed by tactical responses. Under market and operational pressures, it’s understandable why business requests are focused on solving pain points instead of increasing operational value. This lost value can be identified through enhancement requests and underutilized improvements.
 
The best illustrations of a reactive and tactical cycle include limited-use functionality, excessive customizations, and overly complicated assets. When these requests are characterized as business needs and driven through to delivery, the reactive and tactical cycle disrupts and misaligns the business and IT stakeholders. This assures that unhealthy decisionmaking continues and damaging practices fill the work culture. Negative effects mount up over time and can result in operating environments gaining clutter, resource capacity drains, and lost time to low-value activities. 
 
But can an organization redirect themselves once they’re stuck in this damaging request-and-response cycle? Fortunately, yes.
 
Shifting toward a true continuous-value operating model requires a mindset change across the entire organization. Leaders from both business and IT functions need to agree to a proactive and strategic posture meant to produce the inverse effect of reactive and tactical. When proactive and strategic decisions are enabled by executive leaders, and the right operational structures and processes are put in place, the resulting synergies begin to nudge the organization toward a healthier operating culture. Continuous Value is achieved when leadership and actionable strategy enable a best-practice culture reinforced by a value-focused operating model.
 

Key Benefits of a Continuous Value Operating Model

Alignments
True collaborative partnerships between business and IT are enabled and fostered.
 
Simplicity
Business processes and technology begin to complement each other, resulting in simpler processes and enhancements.
 
Stability
With reduction of operational noise, better business and IT alignments, and the right tools comes fewer defects and change impacts.
 
Predictability
Business change planning aligned with IT objectives becomes possible. Capacity forecasting and elastic capacity also become concrete.
 
Efficiencies
When enhancements are based on capability gains that are arrived at through a collaboration between business and IT, there are significant cost and productivity gains.
 

Virtues of a Continuous Value Operating Model

Although this model can be implemented as a program with operational elements, it is best structured as an operating Center of Excellence (CoE) with key executive stakeholders involved.  When a CoE is properly structured and, most importantly, enabled to provide leadership, shape strategies, drive operations, and foster a value-driven culture, it becomes a powerful mechanism for long-term success. Before we explore these value virtues, we must define “value” in this context.
 
Value is the implementation and adoption of capabilities that support corporate objectives in a way that fosters simplicity of process and technology while minimizing disruptions and unnecessary costs. 
 
This definition of value fundamentally challenges the way many organizations operate today and implies real alignments, actionable strategy, efficient operations, and a Specific, Measurable, Achievable, Results-Focused, Time-Bound (S.M.A.R.T.) corporate culture. These are the supporting virtues of a value-based operating model.
 

Leadership

From an operational perspective, leadership helps identify value and the best ways to deliver and maintain that value. A strong collaborative working relationship between business and IT, along with onboarding the right resources and implementing the necessary experience to be credible produces successful continuous value leaders. For example, domain business experience lends credibility to the individual making operating decisions. 

Strategy

Too often, strategy is mistakenly seen as some unattainable pie-in-the-sky concept. This is far from reality. Continuous value strategy involves forming the right internal partnerships and alliances, setting S.M.A.R.T. goals, thinking through ways of supporting leadership and culture development activities, and optimizing operations in ways that foster balance between business and IT objectives. When a CoE or operating group performs with planned intent, it is able to derive value continuously.

Culture

Old methods for controlling change include implementing rigid rules, regulations, and approval approaches. These methods lead to loss of agility, increased costs and long delivery cycles. Value-based operating models rely on the key premise that informed and engaged stakeholders foster a best practices culture and, to an extent, self-govern. When an operating group makes budget and time available for certain corporate culture-shaping activities, change and quality improve more than any other form of governance. 

Operations

There is no question that operations activities are critical. However, value-based operations need to be effective and empowered beyond DevOps. Managing requests through a service management or backlog model can only account for a portion of successful operations — a well-developed environment, established release processes, and tools are all necessary for operational success. 
 
Setting expectations for success and simplifying things isn’t achieved during development or delivery activities, but rather before requests are even made. When processes are in place for a strong value-based operations model, the tone is set for the right value-based thinking. Effective operations include engaging business stakeholders at the processes level and keeping technical talk to features and functions, thereby shielding stakeholders from technical complexities.
 
These virtues come together in a simple operating model that spans lines of businesses and functional groups. Actionable strategy, driven by a team of business and IT leaders with decision making and budgetary authority, is the cornerstone of a strong value-based operations model. Capability and value are mutually arrived at through a joint effort between business and IT in a way that results in simpler processes and maximizes the use of technology. This CoE is empowered to own and drive key activities that foster a S.M.A.R.T., culture based on best practices, and these activities are funded by executive steering. Change is strategized, planned, and carefully managed to minimize disruptions and foster adoption. Operations are made efficient through the right tools and processes to enable smooth work intake, prioritization, and delivery. When these elements are in harmony, a CoE can successfully drive proactive continuous value into an organization.
 
Experience-driven strategy to close the gap between business and IT chart
 
To find out more about organizational best practices and strengthening your business capabilities, please find more resources on the Appirio Hub, or reach out to our CRM Strategy team.

About the Author

Andy Anguelo

Global Managing Consultant CRM Strategy at Appirio

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