James McGovern asked an interesting question on LinkedIn: “What Methodology Should BA Use to Determine Applicable Blockchain Use Cases For Their Organization?” In this sentence, BA means Business Architecture rather than British Airways! It got me thinking – what methodology should operating model analysts use to determine what technology is used to execute any work in the organization.
My first reaction was that this is not a question that is addressed in operating model work. When doing an operating model design for a restaurant, we do not decide what type of cooker is used by the chef or what type of lighting is used in the restaurant entrance. These are level three or four decisions (level 1 being design principles and level 2 being a high-level operating model design). But, I then began to think some more.
Operating model work involves deciding what sort of people you need to do the work, what sort of information support the work needs, where the work will be done, what external suppliers or partners are needed and how the work will be governed. The answers to all of these questions depend at least in part on the technology that is used. If an accounting ledger is kept in a large book with each entry hand written, you need different people, different IT support, different suppliers and different governance processes than if the ledger is held on a blockchain. In other words, once you have defined the work that needs to be done – the value chain needed to deliver a particular value proposition – you also need to decide, in broad terms, the technology that will be used to do the work in order to be able to address all the other operating model questions.
You may not need to decide what type of cooker the chef uses, but, if the cooking only involves microwave ovens, you will need a different kind of chef and different suppliers, than if the cooking involves Cordon Blue cuisine. To give one more example, if you are designing an organization to make holes, you need to know whether the technology you will use is picks and shovels, a mechanical digger, a drill or dynamite before you can design an operating model.
This raises the question of whether this “high-level” technology choice should be part of strategy or part of operating model design. Should the operating model designer say, “I know you want to make a hole, but until you tell me what technology you want to use, I can’t design an operating model for you”; or should the designer say “I know you want to make a hole, tell me a bit more about the type of hole you want and I will tell you what technology is most suitable and give you an operating model design as well”. Personally, I think the latter is more practical, if only because, in operating model work, it is hard enough getting the client to give a clear articulation of the strategy, let alone getting clarity about technologies.
Putting my academic hat on, though, I think the answer to the riddle is dependent on whether the technology choice is a source of advantage/excellence or not. If it is, then it should be defined in the strategy. If not, it can be left to the operating model designer.
So we come back to James’s question “what methodology should operating model designers use to choose technologies for doing the work?” The answer, as with most operating model design, is to ask those who know. Find an expert at “making holes of this kind” and ask him or her what is the best technology, what kind of people are needed to use this technology, etc. When a new technology comes along, like blockchain, ask someone who understands the technology to explain what the technology is good at doing, and then consider each “work step” to assess whether the technology is likely to significantly improve the cost or quality or speed or … of the work step.