• You are a CIO, head of EA, or chief architect who needs to improve their organization’s understanding of business capabilities and how IT can support them.
• You work for an organization that wants to sharpen their alignment and focus on organizational outcomes and value by using architecture to better inform their IT governance, stakeholder management, and IT strategy capabilities.
• Before executing any strategic initiatives, use this blueprint to understand how the organization creates value and the underlying capabilities and processes of the organization.

• You don’t know where or how to begin, or how to engage the right people, model the business, and drive the value of business architecture.
• The business and IT often speak in their own languages without a holistic and integrated view of the mission, strategies, goals, processes, and projects.
• The business and IT often focus on a project, ignoring the holistic value of an overarching value stream and business capability view.

• Build your organization’s capability map by defining the organization’s value stream and validating the retail industry reference architecture.
• Use business capabilities to define strategic focus by defining the organization’s key capabilities and developing a prioritized strategy map.
• Assess key capabilities for planning priorities through a review of business processes, information, and application and technology support of key capabilities.
• Adopt capability-based strategy planning by ongoing identification and road mapping of capability gaps.

Overarching Insight

Using an industry-specific reference architecture is central and has many benefits to organizational priorities. It's critical to understanding, modeling, and communicating the operating environment and the direction of the enterprise, and more significantly, to enabling measurable top-line business outcomes and the unlocking of direct value.

Determine your organizational priority.

Many organizational priorities are dependent on an understanding of how the organization creates value and the organization's capabilities and processes.

Examine organizational opportunities through the lens of business, information/data, applications & technology.

Your understanding of your organization's business capabilities, processes (rules & logic), information/data, and architecture will identify organizational opportunities to create value through reduced costs or increased revenues and services.

Follow Info-Tech's methodology to enable organizational outcomes and unlock direct value.

Your approach indicates the scope of your modernization initiatives.

Build your organization's capability map by defining the organization's value stream and validating the industry reference architecture.

Use business capabilities to define strategic focus by defining the organization's key capabilities and developing a prioritized strategy map.

Assess key capabilities for planning priorities through a review of business processes, information, applications, and technology support of key capabilities.

Sustain capability-based strategy planning through ongoing identification and roadmapping of capability gaps.

Industry Overview: Retail

The retail industry comprises companies that sell goods and services to consumers. While physical or in-store retail is a dominant channel in this market, forms of non-store retailing are gradually becoming popular. E-commerce channels have already carved out a major share in many global markets. Many retailers operate an omnichannel model, which integrates offline and online channels in a seamless way. In 2019, the global retail market generated sales of nearly 25 trillion US dollars, with a forecast to reach close to 27 trillion US dollars by 2022.

Despite the retail market's promising growth globally, the industry was severely impacted during 2020 amidst the COVID-19 pandemic putting pressure on the supply chain.

Nevertheless, all changed in 2021, and for the better. Effective vaccine deployment and greater general knowledge of COVID-19 increased consumer confidence, which resulted in an uptick in consumer spending with new innovative contact-less payment and customer fulfillment models.

Social commerce and influencer marketing have been some of the most popular retail market trends worldwide. Additional retail trends, which include Metaverse, Web3, NFTs, engaging in-store technologies including virtual reality, hands-on encounters, and in-store app functionality, are gaining momentum. (Sources: NRF 2022: 4 Key Trends From This Year’s Big Show (forbes.com); Retail market worldwide - Statistics & Facts | Statista 2022)

Business value defines the success criteria of an organization as manifested through organizational goals and outcomes, and it is interpreted from four perspectives:

• Profit generation: The revenue generated from a business capability with a product that is enabled with modern technologies.
• Cost reduction: The cost reduction when performing business capabilities with a product that is enabled with modern technologies.
• Service enablement: The productivity and efficiency gains of internal business operations from products and capabilities enhanced with modern technologies.
• Customer and market reach: The improved reach and insights of the business in existing or new markets.

Business Value Matrix

Download the Retail Industry Business Reference Architecture Template

1.1 Define the Organization’s Value Stream

1.2 Develop a Business Capability Map

2.1 Define the Organizations Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

• Defined and validated value streams specific to your organization
• A validated Level 1 business capability map
• Decomposed Level 2 capabilities

• Identification of Level 1 cost advantage creators
• Identification of Level 1 competitive advantage creators
• Defined future state capabilities

• Identification of capability process enablement
• Identification of capability data support
• Identification of capability application and technology support

• Prioritization of key capability gaps

DIY Toolkit

Guided Implementation

Workshop

Consulting

Phase 1

Phase 2

Phase 3

Phase 4

Call #3: Model Level 1 business capability maps.

Call #5: Model Level 2 business capability maps.

Call #7: Introduce Info-Tech's capability assessment framework.

Call #9: Discuss and review prioritization of key capability gaps and plan next steps.

2.1 Define the Organization’s Key Capabilities

2.2 Develop a Strategy Map

3.1 Business Process Review

3.2 Information Assessment

3.3 Technology Opportunity Identification

4.1 Consolidate and Prioritize Capability Gaps

Value
Streams

• Retailers need to plan the customer value proposition and retail brand and format profiles that ensure successful retail operations.
• Strategic planning provides guidelines for assortment and pricing and ensures coherent operations
• Sets the criteria for desired amount and type of stores and channel presence. Outlines financial targets, ensures funding, and monitors financial performance.

• Retailers need to purchase the products they are going to sell to customers from manufacturers or wholesale distributors.
• A retailer’s success depends on its ability to source products that customers want and are willing to buy.
• In addition, the retailer needs to purchase the right amount and assortment of products based on anticipated demand.

• Optimizing distribution activities is an important capability for retailers. The right inventory needs to be at a particular store in the right quantities exactly when it is needed. This helps to maximize sales and minimize how much cash is held up in inventory.
• Proper supply chain management can not only reduce costs for retailers but also drive revenues by enhancing shopping experiences.

• Once produced, retailers need to sell the products. This is done through many channels including physical stores, online, the mail, or catalogs.
• After the sale, retailers typically have to deliver the product, provide customer care, and manage complaints.
• Retailers can use loyalty programs, pricing, and promotions to foster repeat business.

“The business context encompasses an understanding of the factors impacting the business from various perspectives, including how decisions are made and what the business is ultimately trying to achieve. The business context is used by IT to identify key implications for the execution of its strategic initiatives.” (Source: Business Wire, 2018)