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Companies strive to build a competitive advantage in a world obsessed with DigitizingDigitalization, and they find that it's all about getting products out the door. Their top people must be able to transform the organization into a more Agile delivery model, where both speed and quality are achieved. That means a fundamental change in leadership culture, and executives need to get their hands dirty in the strategic building of an organization made for Product Development Flow.
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This article will touch on typical challenges when transforming a business and how Enterprise Modularization can reduce the complexity of a legacy structure to enable success in the new digital era. This is a description of how well-known architectural patterns can be used at the highest management level.
Background
Large organizations that produce complex cyber-physical systems have, like all other organizations, a need to transform their ways of working. Industries like Automotive, Aircraft, Aerospace, Defense, and more have an increasing need to deliver with both speed and quality. New competitors with less legacy are just around the corner to introduce entirely new services. The all too well-known disruptive pattern will play faster in the digital age. increasingly compete with advanced digital services in changeable business models. Under the hood of these large organizations, there are many systems are needed to control the entire operational value streamstreams, which typically consists consist of the supply chain, production, development, finance, sales, distribution, and aftermarket. All tighs together in a product structure which is the backbone for making it all work. Especially companies with long-lived consumer products have a substantial legacy of supporting systems.
To unleash innovation and get a new product out the doorcreate new attractive products, it is not just the product development in itself that needs to must become faster and more reliable. It is also the long long tail of supporting systems that must need to be upgraded. But, there is no time to investigate what new operative structures are needed nor or how the supporting systems should work. The focus needs to be on exploring what customers want.
The legacy structure , including supporting systems, is a huge obstacle to reaching cross-domain alignment. Especially in large organizations that produce complex products, the development of supporting systems is a challenge. Regardless of how well you succeed in Agile abilities, the tale of legacy is far too long to be organized around value with effective Development Value streams that can execute in Cadence and Sync.
New competitors with less legacy are just around the corner to introduce entirely new services. The all too well-known disruptive pattern will play faster in the digital age.
Cadence and Sync
If you have been involved in an Agile transformation, you have likely seen the struggle to deliver working Features within a short period. It can be hard enough for an Agile Release Train to finalize Features within a Program Increment. But, in a sizeable Lean-Agile organization, the ability to quickly deliver working Features across several domains in multiple Release Trains is needed to accomplish Cadence and Sync.
Cadence and Sync is the way to create alignment through short feedback loops that provide the necessary learning. Without the fast and frequent feedback, the dream of Business Agility flies out the window.
Modularization
The solution to a very complex enterprise setup cannot be to work harder on defining value streams and continue to accelerate the Product Development flow. Instead, a macro-level view on value streams and the formation of modularized business entities can clarify business targets and create far better options for a successful Lean enterprise.
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By taking a high-level view of value streams in a typical automotive business we can explore the challenges in business architecture.
The right decision level
The power needed to rebuild fundamental organizational structures belongs to the highest level of decision-making. Determination to form new business entities is often for the board to engage in organizational design and decide about the business model and principles for operations.
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An Enterprise's foundational structure, Macro Structure, is the strategic prerequisite that controls the workings of an organization. form Business Models, Value Streams, and other fundamentals needed to develop and operate a business.
Industries like Automotive, Aircraft, Aerospace, Defense, and more have an increasing need to deliver with both speed and quality.
At most companies, IT support for business processes has been cobbled together in a series of unrelated IT projects. Some projects build application silos; others link them together. The result is a highly inflexible IT architecture. Most IT and business executives agree that a more modular architecture—where IT-enabled business processes are plug-and-play components that can be used to meet changing business demands—provides far more capability for companies to grow rapidly and profitably. But inflexible legacy systems and processes are impeding progress in building modular IT and business capabilities. Firms wanting to move toward a modular enterprise architecture face a multi-year evolutionary process.2 Building modular capabilities is a gradual process and is often slowed down by the tendency to invest in immediate business needs rather than long-term capabilities. As a consequence, few companies have achieved a modular IT and business environment.
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