I’ve been working on getting all the pieces together for my second book project. Now the book is starting to come together under the direction of some visual guides. If you have followed my posts throughout the years you will certainly recognize some of these guides.
The major thought
There are only two ways to increase profit known to man, one is to sell more and the other is to lower costs. Whatever action one may take it is geared towards a goal aiming to achieve one of the two increases in profit. Of course one can take parallell action trying to maximize both goals, but that generally has the efffect of not reaching satisfactory levels of any one goal. In a whole system approach as is the one I write about here, the optimum is a balance between the two forces. The result one would find generated by a perfectly balanced system would be greater than the sum of its own and the interacting systems parts taken together. To take it in terms of economy we are balancing Opex and Capex with Stratex (the budget that secures your future and funds innovations in business models ). Most managers find it in their hearts to go for portfolio management as a way of managing the the future. This focus on CAPEX would in general give them a controlling stake of somewhere between 5% and 20% of the overall budgets. Another interesting trait of portfolio management is that it is in effect run as a single year investment process much like OPEX.
Anywhere between 95% to 80% of the total budget is dead set in OPEX. This contains most of the actual power over the company. OPEX can be seen as a blocking force or a stabilizing force depending on culture and position.
The long term investments needed to ensure a rich future is most often unalocated for and are left to wither as long as major crisis is off the radar. In the end this may add up to more than the running operations of today just to fix the immediate problems.
What I intend to explore in this book is how to balance the three forces manifestated as OPEX, CAPEX and STRATEX by the use of an architected approach.
The foundation of the book are the thoughts that I expressed in the first book The art of Enterprise Architecture. I’ll merge the thoughts from the first book with the one-liner tweets collected in the post One year with #TheArtOfEnterpriseArchitecture.
The five E’s
The book follows the five E´s as a way of pulling together the thoughts and concepts into a set of coherent views. Each view contains subset views that could be used as a default guide towards what need to be known from a particular portfolio point of view.
Some elaborations of the Envision view