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Urbanism and strategy
Chapter 5
Urbanism and strategy
This chapter describes the "how to" for the business strategy gathering phase of the methodological approach to the urbanisation of an IT system.
5.1 Harnessing the strategy This is a matter of putting the IT system urbanisation project in the general context of the enterprise or organisation's strategy in such a way as to define a target for the IT system which is in phase with the business processes, which themselves are in phase with the enterprise's strategy. The gathering and comprehension of the strategy are therefore essential upstream from any IT system urbanisation approach. An enterprise or organisation may be regarded as following a top down approach as shown in Fig. 5.1.
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The Enterprise Architecture IT Project Scope of the study for the IT urbanisation project
Vision
Fig. 5.1 Scope of IT urbanisation
So the enterprise or organisation complementary points of view: • • • •
is visualised
according
to
five
the mission, which is in fact the reason for its being an enterprise or organisation; the vision, comprising all the high level objectives of the enterprise or organisation; the strategy, which is the means for carrying out the vision and which is expressed by a set of strategic objectives and sub-objectives; the IT system, which includes: - the business processes which support the strategic objectives, - the software system which implements the business processes.
Urbanisation, and consequently, the practical approach proposed does not include a method to determine the enterprise's mission, vision or strategy. These are considered as being defined and are used as they are. The strategy is modelled by a hierarchy of objectives which are broken down into sub-objectives. The breaking down of the objectives into sub-objectives is stopped when all the objectives can be achieved by at least one process.
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IT systems urbanisation projects have their origins in strategic decisions taken by the enterprise or organisation. The activity of comprehension of the enterprise's strategy is intended to define a reference framework common to the enterprise's managerial staff, IT managers and the team responsible for the urbanisation study of the general enterprise or organisation's strategy. This is a matter of showing the strategic choices most constructive for the IT system. This activity allows for the understanding and validation of the various strategic orientations of the IT system, taking into account: • • •
the point of view of the IT department; the point of view of the departmental heads; the point of view of the users.
Using this shared framework, the team responsible for the urbanisation can clearly define the limits of using urbanisation. Once the limits of the scope of the study are defined and shared among the actors, the team responsible for the urbanisation will establish, along the broad lines of the first conclusions, that it can find the enterprise or organisation's strategy in terms of developing the IT system. More specifically, the objectives of the harnessing of the strategy are as follows: • • • • • • •
to take in and understand the general policy and enterprise or organisation's strategy; to provide the study team with a deeper understanding of the enterprise's choices and directions; to get the management to formalise and/or specify default choices; make the IT managers aware of the strategic stakes of the enterprise; evaluate their consequences in the short, medium and long term at the level of its IT system and software system; explain the short, medium and long term vision of the IT systems development; find out about any major malfunctions in the current situation.
During this phase of the approach, the management and the IT managers must explain through discussions, meetings or documents that are already available, the main principles under which the study is taking place.
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The Enterprise Architecture IT Project
The enterprise or organisation's strategy has short, medium or long term consequences on the IT system and software system. So it is desirable to keep the distinction between each group of impacts. This classification will be used when establishing the hierarchy of updates and the scheduling of the implementation of the urbanisation. In this phase, development requirements independent from the strategy will be shown, which arise from external constraints, like, for example, changes in the regulations of the business studied (new liability to VAT, loss of bonus/penalty for automobiles insurance etc). The management must be involved in the approach. It must at least formally approve the documents produced.
5.2 M o d e l l i n g the strategy
The objectives diagram is based on the Ishikawa diagram. This shows causes and their effects. The first element is a central arrow corresponding to the main effect looked for, while the causes engendering this effect are represented by arrows pointing towards the central axis (arrow indicating main effect). The arrow indicating the cause is in its turn considered as being an effect to be achieved, and the causes bringing about this effect are represented by arrows pointing towards this arrow of cause/effect, etc. Here we are using the Ishikawa diagram to model the enterprise's strategy, expressed in the form of main objectives and sub-objectives. 5.2.1 Presentation
In this activity, the following actions should be taken: • • •
• • •
analysis of the available documents showing the enterprise's strategy; preparation of a discussions guide; holding of discussions. Discussions are held with: - management (strategic vision), - IT structures (methods, costs etc) managers, - user managers (vision with regard to service provided etc); analysis of discussions; consolidation of results; first classification and establishment of requirements hierarchy.
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The summary document drawn up after this task must include responses to the following matters: • • • •
what are the business developments planned? what developments are there in terms of IT services (specific software applications development, user support)? what are the quality objectives (delivery time for a piece of software, zero defects, etc.)? what are the lines of development envisaged for the technical infrastructure (new development tools and methods, new technical architecture, etc.)?
If the profession supported by the IT system has "on-site" restrictions (regulations linked to the business), an enquiry must be made to the governing bodies and the planned developments must be identified for the coming years. These improvements, which are sometimes major, may cause major structural modifications within the IT system. Any external restrictions not directly linked to the strategy but that must be taken into account must be learned of. The development requirements will be classified by order of priority. In particular, the development requirements in terms of performance of the key management events are made clear. If possible, a macroscopic estimate of the work load incurred is made. If any logical constraints are identified, they must be recorded. 5.2.2 The objectives model
Objectives of the objectives model An objectives model is used at the start of a process reconfiguration project. Its purpose is to model the enterprise or organisation's strategy, which is supposed to constitute a starting element for the methodology. The description of the objectives is the natural complement of the objectives diagram. It generally comprises a few pages of text description.
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The Enterprise Architecture IT Project
Urbanism rules for an objectives diagram Rule no. l" Each objective appears only once in the diagram. Rule no. 2: I f an objective is broken down into sub-objectives, the list of subobjectives must be exhaustive to achieve the objective. Rule no. 3." A more precise objective must be able to be associated with one or more realistic and significant KPIs (Key Performance Indicator).
Graphic representation of the objectives model Example of an Ishikawa diagram- SSll Operate worldwide
Offer all types of services (advice,products, systems integration, outsourcing)
Operate as a single enterprise
Invest in Invest in~ ~ \ China USA \ \ Developthe advice \ "'- \ . -. \ focus nroun Greatlyimprove \ \ \ \ |nvest,n ____._._>~" ° " collaboration >\ ~( ~( \ prooucts \-< ~ with the subsidiaries ~ \ Invest where we are absents or '~ have a weak presence
~
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Getasecuityr" consultancy firm
.
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Increase the reuse of software components
Specialise in production units in a single environment
.._ /
_/
Maintain quality
standards Increase cooperation with certain . . . . )i+,-,rs ~
/
._ /
Reduce production costs
Reducestaff costs '~ x
/
/.4 Increase the ~- ...... advertisingeffort
Support the image
Delocalise certain activities
Fig. 5.2 Graphic representation of objectives m o d e l - Ishikawa diagram
Rules of good practice for an objectives diagram Rule no. 1: An objective starts with a verb. Rule no. 2." The wording of an objective does not include "and" which could obscure two objectives.
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There are several ways of modelling the main and intermediary objectives of an enterprise or organisation. We suggest the Ishikawa diagram because it is both visual and synthetic (generally any model fits on an A4 format page), and both these characteristics make an excellent tool for presenting and communicating a strategy. Nevertheless, other representations can be just as acceptable.
5.2.3 The enterprise diagram Graphic representation of the enterprise diagram Example of an enterprise diagram: SSll Customers existing customers - new clients -invitations to tender - over-the-counter transactions - extension of existing business transactions
prospect Commercial
Staff recruitment - universites
- negotiation ..
"
rec
~
- collection
........
Technical partners
pre-sales advice - production on contracts lobbying personnel
- staff reporting - following-up contracts - supplies (general and dedicated)
training, p~rcha~e
independent]., trainers
Operational department
|
,,~
communication
Internal logistics
ntMembers of staff
...........
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~ pmsentation and follow.up~.
- head hunters
- publishers - consultants
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- canvassing
- schools - press
- Web
I
LF - strategy (offer and recruitment)
- sector target - development logic - external/ internal growth
I
~..1 ~
dedicatedpurchases
purchase (oeneraland dedicated) evaluation supplies
~partnership
t
Suppliers logistics (hardware, software, office equipment), training other service providers
Fig. 5.3 Graphic representation of enterpr&e diagram- Ishikawa
Objectives of the enterprise diagram The enterprise diagram is an "aerial" view of the enterprise showing the various functional entities that make up the organisation (sales and trade, administration and finance, production and logistics, technology and research monitoring, marketing) and details the activities and information flows exchanged between these entities. A summary of customers and suppliers is also shown in this diagram, as well as partners; exhaustiveness is
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The Enterprise Architecture IT Project
not necessarily the objective sought, but rather clarity and comprehension "at first glance" and by the whole of the business activity in the enterprise. The enterprise diagram allows for: • • • •
proposing a synthesised vision of the enterprise's activity; showing and positioning customers, suppliers and partners, in relation to the organisation business activity; understanding the links between the internal functional entities; communicating to the managers and staff a kind of"process" orientated vision which is no longer straight from "diagrams".
It is recommended to produce such a diagram when harnessing the strategy and as a step prior to the control of business strategy coherence- functional organisation - enterprise-flows synthesis diagrams - business processes cartography.
Rules of good practice for an enterprise diagram Rule no. 1: Use clarity and readability. Rule no. 2: Show, in the commentary that goes with the diagram, the flows between primary level processes which have not been shown on the diagram for reasons of readability.
5.3 Case study: urbanism and strategy This section shows the file for the end of the business strategy gathering phase of the tour operator's IT system urbanisation project. 5.3.1 Introduction
The purpose of the tour operator's IT system urbanisation project can be expressed in a single phrase: "To redesign and align the architecture of the IT system to the enterprise strategy and to provide it with the means to progressively evolve through independent projects."
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The objectives that correspond to this purpose are to make target business, functional, software and technical architectures: aligned to the strategic stakes of the enterprise; allow for the progressive non-overlapping of the existing software; allow for he control of the evolutions in successive stages, using relatively independent projects which are mutually coherent and of a size reasonably within budget and duration. In this framework, this business strategy gathering phase is intended to put the urbanisation project in the general framework of the enterprise strategy. The management and IT managers should explain the principal lines along which the study takes place. This activity has therefore been carried out on the basis of discussions, collection and analysis of documents (the list of people interviewed and analysed documents are attached to this document). This document shows: • • •
the restitution of the strategic business objectives; the setting of the IT system objectives and the definition of an initial list of KPIs (Key Performance Indicator); a diagnostic on the expression of the strategy as it is, and in particular, on the points to be specified.
The validation of this setting of the comprehension of the strategic lines by the study is important as it provides the starting point for working out the target which will be justified by its contribution to the expectations of these objectives.
5.3.2 The strategic business objectives
Ishikawa diagram The strategic business objectives are represented by the Ishikawa diagram (Fig. 5.4).
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The Enterprise Architecture IT Project Strategic business objectives
Increase the number
Increase the rate of converting contacts
of contacts
into reservations
Develop alternative channels
~<1-t~ta Devel°pa " contacts- - I ~ Guide . . .avauaole .. Allow sales staff to \ \ rgeted marketing to ~,~ ~, . . . \ -rodu'\'~---focus more on sales \ . , Have pmaucts \ Develop a detailed o tan ~ ~ distributed by partners \knowledge of the . . . . . ~ Processrequests \ customers P
/ _.._~/
Invoice quicker..
Optimise human resources at the registered
off.Ice exchange /4R_.e_duce communications Eliminate double / " costs entries and errors - - ~ / arising from them / Distribute I:~.rtners[ Detect bad p a y e ~
/,_
=_/
~/
1 tour operator in France again
/
,nroa,,mo ;'
Reduce operation costs
Improve the cash flow
Fig. 5.4 Strategic business objectives represented on Ishikawa diagram
Notes on the strategic business lines
To increase the number of contacts To become the leading tour operator in France again, sustained growth absolutely must be generated. This happens firstly by increasing the number of contacts, and secondly, by increasing the rate of turning contacts into reservations. As for increasing the number of contacts, more visitors must be attracted (current and future) to the distribution channels. The success of this objective cannot be left to chance and therefore takes a voluntary approach which requires a detailed knowledge of its customers and prospects in order to design and implement marketing plans that are well targeted and efficient. Increasing the rate of turning contacts into reservations The other means of speeding up growth is the improvement in the rate of turning contacts into reservations. Currently, this rate stands at 68%. An 80% rate would increase turnover by about 12%. In order to achieve this 80% target for turning contacts into reservations, the following must take place: •
direct the customers towards available products;
Urbanism and Strategy • • •
79
drastically reduce lost reservations due to customers leaving because of the size of the queues; allow the sales staff to focus on sales by reducing their administrative tasks to a minimum; process all requests in real time.
Develop alternative channels To deal with the increasing competition, the traditional distribution channel, even if it is likely to still remain the main source of sales, is not enough. Now it must: •
•
set itself up in e-commerce by using another brand name in order to win over another type of customer base which could be strongly developed in the near future; have products distributed by partners.
Apart from their contribution to the development of the market share the effect of these objectives will have a direct impact on profitability as an increase in the volume of business will allow for improving the profitability of the enterprise by virtue of the additional negotiation capacity that it would have vis-/l-vis its suppliers.
Reducing operating costs The stagnation in profits over the last three years and even the slight fall in 2000 is no longer acceptable to the shareholders. Furthermore, they mean the enterprise is losing ground to one of its competitors because the share price has been lower for over a year. The way out of this situation is through growth and gains in the market share already available, but also through good profitability in line with the best enterprises in the sector. What is needed here is the reduction of operation costs coupled with a continued quality of service. Four paths have been identified to achieve this reduction in operating costs: •
• •
optimising human resources at the at the head office switchboard, which is currently staffed by 80 people who make work without creating value for the tour operator. This therefore involves removing these activities and replacing them with activities that create value; the elimination of double entries, which not only lead to lost time, but also errors, which result in high costs; the reduction of communications costs linked to incessant telephone calls between the agencies and the organisation department and faxes sent daily to the agencies;
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The Enterprise Architecture IT Project the distribution of the products of partners that complement what the tour operator has to offer and which needs no particular channel, or specialised skills, or management (which remains the responsibility of the partner).
Improve the cash flow Lastly, cash flow must also be improved, firstly by the real-time detection of bad payers so as not to start making reservations which could be given to good payers, and secondly by quicker invoicing. 5.3.3 Objectives of the IT system Ishikawa diagram The strategic business objectives of the IT system are represented by the Ishikawa diagram in Fig. 5.5. IT system objectives Improve the productivityof the sales staff \ \
Proposea targeted Open for sales 24 and ergonomicGUI Optimise the value Allow for access of customers hours a day to product / / Recovercustomerdata \ \ 41--- and customer references Record all 24 hours a day /~1~ if an existing customer \ \ contacts / Proposean Establisha Ioyalty~ Establish a~ \ ~ applicationto program --II~\\ management\ Allow for access ~ , aid efficient sales \ \ ~ - - toolfor customer \ ~1~ --~ \\ relations ~ - to reservations z4 \ \'~ ~ hoursa day Check . avadabdlty ! "" ~ . . "" Establisha targeted ~_ ,n real time " ~ marketing ~ Allowfor q ~ " ~ achievingthe business strategic objectives Open a direct sales portal on the We utomate applications Convert the ~ " for paymentby instalments/ call-centre exchange
I
Allow for direct sales
Approve or decline applications for paymentby instalments in real time
Integratethird-party products into the brochure
Fig. 5.5 Strategic business objectives of IT system represented by Ishikawa diagram
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Notes on the objectives of the IT system In order to properly respond to the business objectives, the IT system must have set the objectives described below. These objectives have been taken from the business objectives, and the link between the strategic business objectives and the IT system objectives is described in Section 5.3.4.
Improve the productivity of the sales staff This involves making computers available to sales staff in the agencies or main agencies, freeing them from having to check daily faxes as to availability and making telephone calls to the head office to check availability in real time to make the reservations. Furthermore, the GUI (Graphical User Interface) will be particularly looked into so as to guide the customer as to the products available. Data conceming an existing customer can be recovered so as to avoid both lost time and the risk of error.
Optimise the value of customers This is a matter of getting the maximum from customers and identified potential customers. The setting up of a loyalty programme aimed at making a customer spend more of his holiday budget on the enterprise's products, while currently it has been noted that the same customer may go on holiday three times a year but only go to the tour operator once. It must therefore move on from the ideas stage to that of certainty and be given the means for analysis to implement a targeted marketing which would allow this objective to be achieved. It must therefore record all its contacts (without harming the productivity of the sales staff) and install one of the best customer relations management tools on the market.
Opening for sales 24 hours a day, 365 days a year The competition, the necessity to position oneself in e-commerce, and also the worldwide dimension of the tour operator, leads to the need for opening the sales system nearly 24 hours a day and 365 days a year. This opening essentially concems the product and customer references and reservations. Allow direct sales Direct sales correspond to a market demand and allows for a significant reduction in management costs.
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The Enterprise Architecture IT Project
It covers: • •
sales on the Web; sales via a telephone call centre.
For the Web, it is a matter of opening a sales portal for some of the enterprise's products and partners' products, under a specific commercial brand name. As for the telephone calls centre, it is a matter of selling all the products of the enterprise under the usual commercial brand name. It is therefore an additional agency, but virtual. What is also involved is converting the organisation department administrators to a tele-consulting role. Of course, a specific training programme for this changeover will be designed and implemented for the changes of skills of these future tele-consulting administrators.
Approval or declining in real time of requests for payment by instalments The approval in real time of applications for payment by instalments will mean the system will no longer be clogged up with pre-reservations which are later cancelled and will reduce operation costs.
Integrate the products of thirdparties into the brochure The IT system must allow for the distribution of the products of partners that complement what the tour operator has to offer and which needs no particular channel, specialised skills, or management (which remains the responsibility of the partner).
5.3.4 Correspondence of business objectives~IT systems objectives Table 5.1 gives the overall view of the contribution of the objectives chosen for the construction of the future IT system to the strategic business objectives. It only shows the main objectives of the Ishikawa diagrams. An exhaustive correspondence table is given in Section 5.3.7.
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Table 5.1 Contribution of objectives chosen for construction of future IT
system Business objectives IT system objectives Improve the productivity of sales staff
Increase the number of contacts
Increase the rate of turning contacts into reservations
Develop alternative channels
X
Reduce running costs
X
Optimise the value of customers
X
X
X
Open for sales 24 hours a day
X
X
X
X
Allow direct sales
X
X
X
X
X
X
X
X
Approve or decline requests for payment by instalments in real time Integrate the products of third parties into the brochure
improve the cash flow
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The Enterprise Architecture IT Project
Key Performance Indicators (KPI) The purpose of this section is to take a look at least one "performance indicator" for each of the objectives identified for the future IT system. These KPI will be monitored regularly to check if the objectives set have been achieved and thus measure the efficiency of the IT system development plan used to implement the enterprise strategy. The KPIs here are provided for illustrative purposes. In reality, each KPI must show at least the current performance and the forecast performance.
Improve the productivity of the sales staff • • • • • • • • •
Number of contacts recorded per agency sales staff per period. Number of contacts recorded per main agency sales staff per period. Number of contacts recorded per tele-consultant per period. Number of reservations recorded per agency sales staff per period. Number of reservations recorded per main agency sales staff per period. Number of reservations recorded per tele-consultant per period. Rate of converting contacts into reservations per agency sales staff per period. Rate of converting contacts into reservations per main agency sales staff per period. Rate of converting contacts into reservations per tele-consultant per period.
Optimise the value of customers • •
Average number of trips per year per customer. Rate of customers from year N-1 also customers year N.
Opening for sales 24 hours a day, 365 days a year • • • •
Availability Availability Availability Availability
of the of the of the of the
reservation reservation reservation reservation
system system system system
to agencies. to main agencies. on the web portal. to the call-centre.
Allow direct sales • • •
Number of reservations recorded by the communications centre. Number of reservations recorded by the web portal.
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Approval or declining in real time of requests for payment by instalments • Number of requests for payments by instalments not processed in real time. Integrate the products of thirdparties into the brochure • Number of third-party products in the brochure. • Turnover generated by the third-party products. • Margin generated by the third-party products. 5.3. 5 Conclusions on the understanding of the strategy
Generally speaking, the trend observed at the time of the interviews of the business strategy gathering phase is that the strategic objectives of the tour operator are known and shared between the actors interviewed. This observation is sufficiently remarkable to be highlighted. The current status evaluation and the target structure should make it easier; moreover, they will allow for the validation of the depth of this assertion to the operational levels of the enterprise. Besides this, the business strategy gatherings phase has brought to light a zone of uncertainty and debate which it is important to look into. Although the sale of third-party products is seen as an undisputed objective for its contribution to the strategy, its outline is even now too vague to be able to derive valid operational objectives from it for the future IT system. Not having been the subject of a detailed analysis, the results of the interviews carried out a priori show that this concept covers a mixed stock of potential products. It is essential that the perimeter that covers this concept of selling third-party products is clarified, because this may make significant impacts on the construction of the target. Failing this, the "third-party products sales" channels will have to be the subject of a separate "zone", without a strong link to the target IT system, to be built later.
Hierarchical structure and prioritising of business objectives The people interviewed gave the following priorities for the business objectives selected:
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The Enterprise Architecture IT Project
Table 5.2 Interviewees stated prioritiesfor business objectives i
....Strategic business objectiVes
To increase the number of contacts Develop a targeted marketing Develop a good knowledge of customers Increase the scope for opening for sales Increasing the rate of converting contacts into reservations Direct contacts towards available products Allow the sales staff to focus more on sales Reduce queues Reduce the administrative workload on sales staff Process all requests in real time Develop alternative channels Have products distributed by partners Set up in e-commerce Reducing operation costs Optimise human resources at the head office Reduce running costs Eliminate double entries and errors arising from this Distribute the products of partners Improve the cash flow Invoice more rapidly Detect bad payers in real time
Maximum priority
,
,,,
,
,,,
,t,
Average Lowest priority ............priority
....
×
×
×
×
× x × × × ×
× × × x × × × × ×
Hierarchical structure and prioritising of IT systems objectives The intersection matrix of business and IT system objectives and j u d g e m e n t have allowed for the easy deduction of the priorities of the IT system objectives using the priorities of the business objectives. The result is shown in the table on the next page:
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Table 5.3 Result from intersection of business and IT system objectives ,,
iT System objectives .... Improve the productivity of the sales staff Propose a support application for efficient sales Propose a targeted and ergonomic GUI Recover customer data if an existing customer Check availability in real time Optimise the value of customers Set up a loyalty programme Set up targeted marketing Record all contacts Set up a customer relations management tool Open for sales 24 hours a day Allow access to product and customer references 24 hours a day Allow access to reservations 24 hours a day Allow direct sales Open a direct sales portal on the Web Change the call-centre exchange Approval or declining in real time applications for payment by instalments Automate applications for payment by instalments Integrate the products of third parties into the brochure
Maximum priority
Average Priority
Lowest Priority
×
× x × ×
x x ×
× × x
5.3. 6 Enterprise diagram The diagram was produced for the current situation of the tour operator and the target situation.
Enterprise diagram: current situation All the flows arc information flows. The financial flows are indicated with dotted arrows. It should be pointed out that this diagram is not exhaustive. For example, the head office is not represented nor is its exchanges with the organisation department as to the validation of the brochure.
t
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The Enterprise Architecture IT Project
Enterprise diagram (current situation) Customers ,
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instalments Approval of instalment payment files Confirmation/cancellation of pre-reservation
Fig. 5.6 The enterprise diagram (current situation)
Enterprise diagram: target situation All the flows are information flows. The financial flows are indicated with dotted arrows. As with the enterprise diagram representing the existing state, it should be pointed out that this diagram is not exhaustive. For example, the head office is not represented nor is its exchanges with the organ,sat,on department as to the validation of the brochure.
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Enterprise diagram (target situation) Customers !
Payment ~ I
Media
,h,
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Applicationforms I (info, ms, Payment tnc lrice nReimbursement of cleposit I payment I I Invoice by instalments) i! Resen I I0 0I deposit envoice I I I I Decision on I ~ J ~ I I paymentby ~V I I Brochure ~ i I Inc price ~ =I, ! Re~,~,~rvationPhysical and virtual file i Financial agencies Organisation i department _Oepsit (Web and Department payment- call-centres) i Reservation Brochure
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instalments
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Fig. 5.7 The enterprise diagram (target situation)
The variance between the existing and target seems to be centred on the following essential points" removal of pre-reservations and the direct making of reservations, which removes flows between the agencies and the organisation department; appearance of a virtual agency via the Web and a call-centre; processing of application forms for payment by instalments in real time; integration into the brochure of partners' products and making the tour operator's products available to partners for marketing. This point generates flows between the organisation department and the partners, and as for financial flows, they are also generated but this time between the finance department and the partners. Aware of the stakes that computing represents for the achievement of this target, the Director General, has decided to create an IT systems department. The target flow chart is as follows and differs from the existing flow chart with the replacement of the IT department attached to the finance department by a real IT systems department.
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The Enterprise Architecture IT Project !
Headofficei ........
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Fig. 5.8 Replacement flow chart
5. 3. 7 Appendices
Appendix 1: business objectives/IT system objectives correspondence The business objectives/IT system objectives correspondence table is shown in Table 5.2. Appendix 2: list of people interviewed The discussions that took place in addition to the analysis of the documents mentioned in Appendix 3 in order to acquire a complete vision of the strategic lines for the development of the tour operator involved the following: •
CEO;
• • • •
Financial Manager; Organisation Manager; Marketing Manager; Commercial Manager;
Urbanism and Strategy
• •
Operations Manager; IT Systems Manager.
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1 1
1
~
Optimise human resources at head office
1
Detect bad payers in real time
Invoice more rapidly
Improve the cash flow
Distribute the products of partners
Eliminate double entries and errors arising from this
Reduce telecommunications costs
Reducing operation costs
1
i Set up in e-commerce
Have products distributed by partners
Develop alternativechannels
Process all requests in real time
Reduce admin workload on sales staff
Reduce queues
Allow sales staff to focus more on sales
Direct contacts towards available products
Increasing rate of converting contacts into reservations
Increase range of opening
Develop a good knowledge of customers
Develop a targeted marketing
To increase the number of contacts
\ \ \
\
X
Develop a good knowledge of customers
\ \ \ \
Detect bad payers in real time
Invoice more rapidly
Improve the cash flow
Distribute the products of partners
Eliminate double entries and errors arising from this
Reduce telecommunications costs
Optimise human resources at head office
Reducing operation costs
Set up in e-commerce
Have products distributed by partners
Develop alternative channels
Process all requests in real time
Reduce admin workload on sales staff
Reduce queues
Allow sales staff to focus more on sales
Direct contacts towards available products
Increasing rate of converting contacts into reservations
Increase range of opening
Develop a targeted marketing
To increase the number of contacts
\ \ \ \
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Urbanism and Strategy
95
Note: all those interviewed were managers. In the event of them being unavailable, they could be replaced by their immediate associates. However, even in this case, nobody in the field was interviewed, as it was not a case of making or reviewing the strategy, but more modestly, understanding and reproducing it. This is why the managers, or lacking them, their immediate associates, were the fight people for these discussions.
Appendix 3: list of documents used The list of the documents studied at the business strategy gatherings phase was as follows: • • • • • •
strategic business plan; reservation organisation audit report; current IT system audit report; work position architecture; flow chart; Year 2000 and Euro current projects study.
Urbanism and strategy
This chapter describes the "how to" for the business strategy gathering phase of the methodological approach to the urbanisation of an IT system.
5.1 Harnessing the strategy This is a matter of putting the IT system urbanisation project in the general context of the enterprise or organisation's strategy in such a way as to define a target for the IT system which is in phase with the business processes, which themselves are in phase with the enterprise's strategy. The gathering and comprehension of the strategy are therefore essential upstream from any IT system urbanisation approach. An enterprise or organisation may be regarded as following a top down approach as shown in Fig. 5.1.
70
The Enterprise Architecture IT Project Scope of the study for the IT urbanisation project
Vision
Fig. 5.1 Scope of IT urbanisation
So the enterprise or organisation complementary points of view: • • • •
is visualised
according
to
five
the mission, which is in fact the reason for its being an enterprise or organisation; the vision, comprising all the high level objectives of the enterprise or organisation; the strategy, which is the means for carrying out the vision and which is expressed by a set of strategic objectives and sub-objectives; the IT system, which includes: - the business processes which support the strategic objectives, - the software system which implements the business processes.
Urbanisation, and consequently, the practical approach proposed does not include a method to determine the enterprise's mission, vision or strategy. These are considered as being defined and are used as they are. The strategy is modelled by a hierarchy of objectives which are broken down into sub-objectives. The breaking down of the objectives into sub-objectives is stopped when all the objectives can be achieved by at least one process.
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71
IT systems urbanisation projects have their origins in strategic decisions taken by the enterprise or organisation. The activity of comprehension of the enterprise's strategy is intended to define a reference framework common to the enterprise's managerial staff, IT managers and the team responsible for the urbanisation study of the general enterprise or organisation's strategy. This is a matter of showing the strategic choices most constructive for the IT system. This activity allows for the understanding and validation of the various strategic orientations of the IT system, taking into account: • • •
the point of view of the IT department; the point of view of the departmental heads; the point of view of the users.
Using this shared framework, the team responsible for the urbanisation can clearly define the limits of using urbanisation. Once the limits of the scope of the study are defined and shared among the actors, the team responsible for the urbanisation will establish, along the broad lines of the first conclusions, that it can find the enterprise or organisation's strategy in terms of developing the IT system. More specifically, the objectives of the harnessing of the strategy are as follows: • • • • • • •
to take in and understand the general policy and enterprise or organisation's strategy; to provide the study team with a deeper understanding of the enterprise's choices and directions; to get the management to formalise and/or specify default choices; make the IT managers aware of the strategic stakes of the enterprise; evaluate their consequences in the short, medium and long term at the level of its IT system and software system; explain the short, medium and long term vision of the IT systems development; find out about any major malfunctions in the current situation.
During this phase of the approach, the management and the IT managers must explain through discussions, meetings or documents that are already available, the main principles under which the study is taking place.
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The Enterprise Architecture IT Project
The enterprise or organisation's strategy has short, medium or long term consequences on the IT system and software system. So it is desirable to keep the distinction between each group of impacts. This classification will be used when establishing the hierarchy of updates and the scheduling of the implementation of the urbanisation. In this phase, development requirements independent from the strategy will be shown, which arise from external constraints, like, for example, changes in the regulations of the business studied (new liability to VAT, loss of bonus/penalty for automobiles insurance etc). The management must be involved in the approach. It must at least formally approve the documents produced.
5.2 M o d e l l i n g the strategy
The objectives diagram is based on the Ishikawa diagram. This shows causes and their effects. The first element is a central arrow corresponding to the main effect looked for, while the causes engendering this effect are represented by arrows pointing towards the central axis (arrow indicating main effect). The arrow indicating the cause is in its turn considered as being an effect to be achieved, and the causes bringing about this effect are represented by arrows pointing towards this arrow of cause/effect, etc. Here we are using the Ishikawa diagram to model the enterprise's strategy, expressed in the form of main objectives and sub-objectives. 5.2.1 Presentation
In this activity, the following actions should be taken: • • •
• • •
analysis of the available documents showing the enterprise's strategy; preparation of a discussions guide; holding of discussions. Discussions are held with: - management (strategic vision), - IT structures (methods, costs etc) managers, - user managers (vision with regard to service provided etc); analysis of discussions; consolidation of results; first classification and establishment of requirements hierarchy.
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73
The summary document drawn up after this task must include responses to the following matters: • • • •
what are the business developments planned? what developments are there in terms of IT services (specific software applications development, user support)? what are the quality objectives (delivery time for a piece of software, zero defects, etc.)? what are the lines of development envisaged for the technical infrastructure (new development tools and methods, new technical architecture, etc.)?
If the profession supported by the IT system has "on-site" restrictions (regulations linked to the business), an enquiry must be made to the governing bodies and the planned developments must be identified for the coming years. These improvements, which are sometimes major, may cause major structural modifications within the IT system. Any external restrictions not directly linked to the strategy but that must be taken into account must be learned of. The development requirements will be classified by order of priority. In particular, the development requirements in terms of performance of the key management events are made clear. If possible, a macroscopic estimate of the work load incurred is made. If any logical constraints are identified, they must be recorded. 5.2.2 The objectives model
Objectives of the objectives model An objectives model is used at the start of a process reconfiguration project. Its purpose is to model the enterprise or organisation's strategy, which is supposed to constitute a starting element for the methodology. The description of the objectives is the natural complement of the objectives diagram. It generally comprises a few pages of text description.
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The Enterprise Architecture IT Project
Urbanism rules for an objectives diagram Rule no. l" Each objective appears only once in the diagram. Rule no. 2: I f an objective is broken down into sub-objectives, the list of subobjectives must be exhaustive to achieve the objective. Rule no. 3." A more precise objective must be able to be associated with one or more realistic and significant KPIs (Key Performance Indicator).
Graphic representation of the objectives model Example of an Ishikawa diagram- SSll Operate worldwide
Offer all types of services (advice,products, systems integration, outsourcing)
Operate as a single enterprise
Invest in Invest in~ ~ \ China USA \ \ Developthe advice \ "'- \ . -. \ focus nroun Greatlyimprove \ \ \ \ |nvest,n ____._._>~" ° " collaboration >\ ~( ~( \ prooucts \-< ~ with the subsidiaries ~ \ Invest where we are absents or '~ have a weak presence
~
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.
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_/
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/.4 Increase the ~- ...... advertisingeffort
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Delocalise certain activities
Fig. 5.2 Graphic representation of objectives m o d e l - Ishikawa diagram
Rules of good practice for an objectives diagram Rule no. 1: An objective starts with a verb. Rule no. 2." The wording of an objective does not include "and" which could obscure two objectives.
Urbanism a n d Strategy
75
There are several ways of modelling the main and intermediary objectives of an enterprise or organisation. We suggest the Ishikawa diagram because it is both visual and synthetic (generally any model fits on an A4 format page), and both these characteristics make an excellent tool for presenting and communicating a strategy. Nevertheless, other representations can be just as acceptable.
5.2.3 The enterprise diagram Graphic representation of the enterprise diagram Example of an enterprise diagram: SSll Customers existing customers - new clients -invitations to tender - over-the-counter transactions - extension of existing business transactions
prospect Commercial
Staff recruitment - universites
- negotiation ..
"
rec
~
- collection
........
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Fig. 5.3 Graphic representation of enterpr&e diagram- Ishikawa
Objectives of the enterprise diagram The enterprise diagram is an "aerial" view of the enterprise showing the various functional entities that make up the organisation (sales and trade, administration and finance, production and logistics, technology and research monitoring, marketing) and details the activities and information flows exchanged between these entities. A summary of customers and suppliers is also shown in this diagram, as well as partners; exhaustiveness is
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The Enterprise Architecture IT Project
not necessarily the objective sought, but rather clarity and comprehension "at first glance" and by the whole of the business activity in the enterprise. The enterprise diagram allows for: • • • •
proposing a synthesised vision of the enterprise's activity; showing and positioning customers, suppliers and partners, in relation to the organisation business activity; understanding the links between the internal functional entities; communicating to the managers and staff a kind of"process" orientated vision which is no longer straight from "diagrams".
It is recommended to produce such a diagram when harnessing the strategy and as a step prior to the control of business strategy coherence- functional organisation - enterprise-flows synthesis diagrams - business processes cartography.
Rules of good practice for an enterprise diagram Rule no. 1: Use clarity and readability. Rule no. 2: Show, in the commentary that goes with the diagram, the flows between primary level processes which have not been shown on the diagram for reasons of readability.
5.3 Case study: urbanism and strategy This section shows the file for the end of the business strategy gathering phase of the tour operator's IT system urbanisation project. 5.3.1 Introduction
The purpose of the tour operator's IT system urbanisation project can be expressed in a single phrase: "To redesign and align the architecture of the IT system to the enterprise strategy and to provide it with the means to progressively evolve through independent projects."
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77
The objectives that correspond to this purpose are to make target business, functional, software and technical architectures: aligned to the strategic stakes of the enterprise; allow for the progressive non-overlapping of the existing software; allow for he control of the evolutions in successive stages, using relatively independent projects which are mutually coherent and of a size reasonably within budget and duration. In this framework, this business strategy gathering phase is intended to put the urbanisation project in the general framework of the enterprise strategy. The management and IT managers should explain the principal lines along which the study takes place. This activity has therefore been carried out on the basis of discussions, collection and analysis of documents (the list of people interviewed and analysed documents are attached to this document). This document shows: • • •
the restitution of the strategic business objectives; the setting of the IT system objectives and the definition of an initial list of KPIs (Key Performance Indicator); a diagnostic on the expression of the strategy as it is, and in particular, on the points to be specified.
The validation of this setting of the comprehension of the strategic lines by the study is important as it provides the starting point for working out the target which will be justified by its contribution to the expectations of these objectives.
5.3.2 The strategic business objectives
Ishikawa diagram The strategic business objectives are represented by the Ishikawa diagram (Fig. 5.4).
78
The Enterprise Architecture IT Project Strategic business objectives
Increase the number
Increase the rate of converting contacts
of contacts
into reservations
Develop alternative channels
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/ _.._~/
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off.Ice exchange /4R_.e_duce communications Eliminate double / " costs entries and errors - - ~ / arising from them / Distribute I:~.rtners[ Detect bad p a y e ~
/,_
=_/
~/
1 tour operator in France again
/
,nroa,,mo ;'
Reduce operation costs
Improve the cash flow
Fig. 5.4 Strategic business objectives represented on Ishikawa diagram
Notes on the strategic business lines
To increase the number of contacts To become the leading tour operator in France again, sustained growth absolutely must be generated. This happens firstly by increasing the number of contacts, and secondly, by increasing the rate of turning contacts into reservations. As for increasing the number of contacts, more visitors must be attracted (current and future) to the distribution channels. The success of this objective cannot be left to chance and therefore takes a voluntary approach which requires a detailed knowledge of its customers and prospects in order to design and implement marketing plans that are well targeted and efficient. Increasing the rate of turning contacts into reservations The other means of speeding up growth is the improvement in the rate of turning contacts into reservations. Currently, this rate stands at 68%. An 80% rate would increase turnover by about 12%. In order to achieve this 80% target for turning contacts into reservations, the following must take place: •
direct the customers towards available products;
Urbanism and Strategy • • •
79
drastically reduce lost reservations due to customers leaving because of the size of the queues; allow the sales staff to focus on sales by reducing their administrative tasks to a minimum; process all requests in real time.
Develop alternative channels To deal with the increasing competition, the traditional distribution channel, even if it is likely to still remain the main source of sales, is not enough. Now it must: •
•
set itself up in e-commerce by using another brand name in order to win over another type of customer base which could be strongly developed in the near future; have products distributed by partners.
Apart from their contribution to the development of the market share the effect of these objectives will have a direct impact on profitability as an increase in the volume of business will allow for improving the profitability of the enterprise by virtue of the additional negotiation capacity that it would have vis-/l-vis its suppliers.
Reducing operating costs The stagnation in profits over the last three years and even the slight fall in 2000 is no longer acceptable to the shareholders. Furthermore, they mean the enterprise is losing ground to one of its competitors because the share price has been lower for over a year. The way out of this situation is through growth and gains in the market share already available, but also through good profitability in line with the best enterprises in the sector. What is needed here is the reduction of operation costs coupled with a continued quality of service. Four paths have been identified to achieve this reduction in operating costs: •
• •
optimising human resources at the at the head office switchboard, which is currently staffed by 80 people who make work without creating value for the tour operator. This therefore involves removing these activities and replacing them with activities that create value; the elimination of double entries, which not only lead to lost time, but also errors, which result in high costs; the reduction of communications costs linked to incessant telephone calls between the agencies and the organisation department and faxes sent daily to the agencies;
80
The Enterprise Architecture IT Project the distribution of the products of partners that complement what the tour operator has to offer and which needs no particular channel, or specialised skills, or management (which remains the responsibility of the partner).
Improve the cash flow Lastly, cash flow must also be improved, firstly by the real-time detection of bad payers so as not to start making reservations which could be given to good payers, and secondly by quicker invoicing. 5.3.3 Objectives of the IT system Ishikawa diagram The strategic business objectives of the IT system are represented by the Ishikawa diagram in Fig. 5.5. IT system objectives Improve the productivityof the sales staff \ \
Proposea targeted Open for sales 24 and ergonomicGUI Optimise the value Allow for access of customers hours a day to product / / Recovercustomerdata \ \ 41--- and customer references Record all 24 hours a day /~1~ if an existing customer \ \ contacts / Proposean Establisha Ioyalty~ Establish a~ \ ~ applicationto program --II~\\ management\ Allow for access ~ , aid efficient sales \ \ ~ - - toolfor customer \ ~1~ --~ \\ relations ~ - to reservations z4 \ \'~ ~ hoursa day Check . avadabdlty ! "" ~ . . "" Establisha targeted ~_ ,n real time " ~ marketing ~ Allowfor q ~ " ~ achievingthe business strategic objectives Open a direct sales portal on the We utomate applications Convert the ~ " for paymentby instalments/ call-centre exchange
I
Allow for direct sales
Approve or decline applications for paymentby instalments in real time
Integratethird-party products into the brochure
Fig. 5.5 Strategic business objectives of IT system represented by Ishikawa diagram
Urbanism and Strategy
81
Notes on the objectives of the IT system In order to properly respond to the business objectives, the IT system must have set the objectives described below. These objectives have been taken from the business objectives, and the link between the strategic business objectives and the IT system objectives is described in Section 5.3.4.
Improve the productivity of the sales staff This involves making computers available to sales staff in the agencies or main agencies, freeing them from having to check daily faxes as to availability and making telephone calls to the head office to check availability in real time to make the reservations. Furthermore, the GUI (Graphical User Interface) will be particularly looked into so as to guide the customer as to the products available. Data conceming an existing customer can be recovered so as to avoid both lost time and the risk of error.
Optimise the value of customers This is a matter of getting the maximum from customers and identified potential customers. The setting up of a loyalty programme aimed at making a customer spend more of his holiday budget on the enterprise's products, while currently it has been noted that the same customer may go on holiday three times a year but only go to the tour operator once. It must therefore move on from the ideas stage to that of certainty and be given the means for analysis to implement a targeted marketing which would allow this objective to be achieved. It must therefore record all its contacts (without harming the productivity of the sales staff) and install one of the best customer relations management tools on the market.
Opening for sales 24 hours a day, 365 days a year The competition, the necessity to position oneself in e-commerce, and also the worldwide dimension of the tour operator, leads to the need for opening the sales system nearly 24 hours a day and 365 days a year. This opening essentially concems the product and customer references and reservations. Allow direct sales Direct sales correspond to a market demand and allows for a significant reduction in management costs.
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The Enterprise Architecture IT Project
It covers: • •
sales on the Web; sales via a telephone call centre.
For the Web, it is a matter of opening a sales portal for some of the enterprise's products and partners' products, under a specific commercial brand name. As for the telephone calls centre, it is a matter of selling all the products of the enterprise under the usual commercial brand name. It is therefore an additional agency, but virtual. What is also involved is converting the organisation department administrators to a tele-consulting role. Of course, a specific training programme for this changeover will be designed and implemented for the changes of skills of these future tele-consulting administrators.
Approval or declining in real time of requests for payment by instalments The approval in real time of applications for payment by instalments will mean the system will no longer be clogged up with pre-reservations which are later cancelled and will reduce operation costs.
Integrate the products of thirdparties into the brochure The IT system must allow for the distribution of the products of partners that complement what the tour operator has to offer and which needs no particular channel, specialised skills, or management (which remains the responsibility of the partner).
5.3.4 Correspondence of business objectives~IT systems objectives Table 5.1 gives the overall view of the contribution of the objectives chosen for the construction of the future IT system to the strategic business objectives. It only shows the main objectives of the Ishikawa diagrams. An exhaustive correspondence table is given in Section 5.3.7.
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83
Table 5.1 Contribution of objectives chosen for construction of future IT
system Business objectives IT system objectives Improve the productivity of sales staff
Increase the number of contacts
Increase the rate of turning contacts into reservations
Develop alternative channels
X
Reduce running costs
X
Optimise the value of customers
X
X
X
Open for sales 24 hours a day
X
X
X
X
Allow direct sales
X
X
X
X
X
X
X
X
Approve or decline requests for payment by instalments in real time Integrate the products of third parties into the brochure
improve the cash flow
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The Enterprise Architecture IT Project
Key Performance Indicators (KPI) The purpose of this section is to take a look at least one "performance indicator" for each of the objectives identified for the future IT system. These KPI will be monitored regularly to check if the objectives set have been achieved and thus measure the efficiency of the IT system development plan used to implement the enterprise strategy. The KPIs here are provided for illustrative purposes. In reality, each KPI must show at least the current performance and the forecast performance.
Improve the productivity of the sales staff • • • • • • • • •
Number of contacts recorded per agency sales staff per period. Number of contacts recorded per main agency sales staff per period. Number of contacts recorded per tele-consultant per period. Number of reservations recorded per agency sales staff per period. Number of reservations recorded per main agency sales staff per period. Number of reservations recorded per tele-consultant per period. Rate of converting contacts into reservations per agency sales staff per period. Rate of converting contacts into reservations per main agency sales staff per period. Rate of converting contacts into reservations per tele-consultant per period.
Optimise the value of customers • •
Average number of trips per year per customer. Rate of customers from year N-1 also customers year N.
Opening for sales 24 hours a day, 365 days a year • • • •
Availability Availability Availability Availability
of the of the of the of the
reservation reservation reservation reservation
system system system system
to agencies. to main agencies. on the web portal. to the call-centre.
Allow direct sales • • •
Number of reservations recorded by the communications centre. Number of reservations recorded by the web portal.
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85
Approval or declining in real time of requests for payment by instalments • Number of requests for payments by instalments not processed in real time. Integrate the products of thirdparties into the brochure • Number of third-party products in the brochure. • Turnover generated by the third-party products. • Margin generated by the third-party products. 5.3. 5 Conclusions on the understanding of the strategy
Generally speaking, the trend observed at the time of the interviews of the business strategy gathering phase is that the strategic objectives of the tour operator are known and shared between the actors interviewed. This observation is sufficiently remarkable to be highlighted. The current status evaluation and the target structure should make it easier; moreover, they will allow for the validation of the depth of this assertion to the operational levels of the enterprise. Besides this, the business strategy gatherings phase has brought to light a zone of uncertainty and debate which it is important to look into. Although the sale of third-party products is seen as an undisputed objective for its contribution to the strategy, its outline is even now too vague to be able to derive valid operational objectives from it for the future IT system. Not having been the subject of a detailed analysis, the results of the interviews carried out a priori show that this concept covers a mixed stock of potential products. It is essential that the perimeter that covers this concept of selling third-party products is clarified, because this may make significant impacts on the construction of the target. Failing this, the "third-party products sales" channels will have to be the subject of a separate "zone", without a strong link to the target IT system, to be built later.
Hierarchical structure and prioritising of business objectives The people interviewed gave the following priorities for the business objectives selected:
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The Enterprise Architecture IT Project
Table 5.2 Interviewees stated prioritiesfor business objectives i
....Strategic business objectiVes
To increase the number of contacts Develop a targeted marketing Develop a good knowledge of customers Increase the scope for opening for sales Increasing the rate of converting contacts into reservations Direct contacts towards available products Allow the sales staff to focus more on sales Reduce queues Reduce the administrative workload on sales staff Process all requests in real time Develop alternative channels Have products distributed by partners Set up in e-commerce Reducing operation costs Optimise human resources at the head office Reduce running costs Eliminate double entries and errors arising from this Distribute the products of partners Improve the cash flow Invoice more rapidly Detect bad payers in real time
Maximum priority
,
,,,
,
,,,
,t,
Average Lowest priority ............priority
....
×
×
×
×
× x × × × ×
× × × x × × × × ×
Hierarchical structure and prioritising of IT systems objectives The intersection matrix of business and IT system objectives and j u d g e m e n t have allowed for the easy deduction of the priorities of the IT system objectives using the priorities of the business objectives. The result is shown in the table on the next page:
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87
Table 5.3 Result from intersection of business and IT system objectives ,,
iT System objectives .... Improve the productivity of the sales staff Propose a support application for efficient sales Propose a targeted and ergonomic GUI Recover customer data if an existing customer Check availability in real time Optimise the value of customers Set up a loyalty programme Set up targeted marketing Record all contacts Set up a customer relations management tool Open for sales 24 hours a day Allow access to product and customer references 24 hours a day Allow access to reservations 24 hours a day Allow direct sales Open a direct sales portal on the Web Change the call-centre exchange Approval or declining in real time applications for payment by instalments Automate applications for payment by instalments Integrate the products of third parties into the brochure
Maximum priority
Average Priority
Lowest Priority
×
× x × ×
x x ×
× × x
5.3. 6 Enterprise diagram The diagram was produced for the current situation of the tour operator and the target situation.
Enterprise diagram: current situation All the flows arc information flows. The financial flows are indicated with dotted arrows. It should be pointed out that this diagram is not exhaustive. For example, the head office is not represented nor is its exchanges with the organisation department as to the validation of the brochure.
t
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The Enterprise Architecture IT Project
Enterprise diagram (current situation) Customers ,
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Fig. 5.6 The enterprise diagram (current situation)
Enterprise diagram: target situation All the flows are information flows. The financial flows are indicated with dotted arrows. As with the enterprise diagram representing the existing state, it should be pointed out that this diagram is not exhaustive. For example, the head office is not represented nor is its exchanges with the organ,sat,on department as to the validation of the brochure.
Urbanism and Strategy
89
Enterprise diagram (target situation) Customers !
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,h,
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Applicationforms I (info, ms, Payment tnc lrice nReimbursement of cleposit I payment I I Invoice by instalments) i! Resen I I0 0I deposit envoice I I I I Decision on I ~ J ~ I I paymentby ~V I I Brochure ~ i I Inc price ~ =I, ! Re~,~,~rvationPhysical and virtual file i Financial agencies Organisation i department _Oepsit (Web and Department payment- call-centres) i Reservation Brochure
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Fig. 5.7 The enterprise diagram (target situation)
The variance between the existing and target seems to be centred on the following essential points" removal of pre-reservations and the direct making of reservations, which removes flows between the agencies and the organisation department; appearance of a virtual agency via the Web and a call-centre; processing of application forms for payment by instalments in real time; integration into the brochure of partners' products and making the tour operator's products available to partners for marketing. This point generates flows between the organisation department and the partners, and as for financial flows, they are also generated but this time between the finance department and the partners. Aware of the stakes that computing represents for the achievement of this target, the Director General, has decided to create an IT systems department. The target flow chart is as follows and differs from the existing flow chart with the replacement of the IT department attached to the finance department by a real IT systems department.
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The Enterprise Architecture IT Project !
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Fig. 5.8 Replacement flow chart
5. 3. 7 Appendices
Appendix 1: business objectives/IT system objectives correspondence The business objectives/IT system objectives correspondence table is shown in Table 5.2. Appendix 2: list of people interviewed The discussions that took place in addition to the analysis of the documents mentioned in Appendix 3 in order to acquire a complete vision of the strategic lines for the development of the tour operator involved the following: •
CEO;
• • • •
Financial Manager; Organisation Manager; Marketing Manager; Commercial Manager;
Urbanism and Strategy
• •
Operations Manager; IT Systems Manager.
91
1 1
1
~
Optimise human resources at head office
1
Detect bad payers in real time
Invoice more rapidly
Improve the cash flow
Distribute the products of partners
Eliminate double entries and errors arising from this
Reduce telecommunications costs
Reducing operation costs
1
i Set up in e-commerce
Have products distributed by partners
Develop alternativechannels
Process all requests in real time
Reduce admin workload on sales staff
Reduce queues
Allow sales staff to focus more on sales
Direct contacts towards available products
Increasing rate of converting contacts into reservations
Increase range of opening
Develop a good knowledge of customers
Develop a targeted marketing
To increase the number of contacts
\ \ \
\
X
Develop a good knowledge of customers
\ \ \ \
Detect bad payers in real time
Invoice more rapidly
Improve the cash flow
Distribute the products of partners
Eliminate double entries and errors arising from this
Reduce telecommunications costs
Optimise human resources at head office
Reducing operation costs
Set up in e-commerce
Have products distributed by partners
Develop alternative channels
Process all requests in real time
Reduce admin workload on sales staff
Reduce queues
Allow sales staff to focus more on sales
Direct contacts towards available products
Increasing rate of converting contacts into reservations
Increase range of opening
Develop a targeted marketing
To increase the number of contacts
\ \ \ \
X
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Urbanism and Strategy
95
Note: all those interviewed were managers. In the event of them being unavailable, they could be replaced by their immediate associates. However, even in this case, nobody in the field was interviewed, as it was not a case of making or reviewing the strategy, but more modestly, understanding and reproducing it. This is why the managers, or lacking them, their immediate associates, were the fight people for these discussions.
Appendix 3: list of documents used The list of the documents studied at the business strategy gatherings phase was as follows: • • • • • •
strategic business plan; reservation organisation audit report; current IT system audit report; work position architecture; flow chart; Year 2000 and Euro current projects study.