Perspectives

Flexible consumption [interactive infographic]

Transformation framework and methodology

Transforming to flexible consumption calls for a fundamentally different way of doing business. Companies exploring flexible consumption business model transformation should think through the implications of the complex and interrelated business decisions they will need to make as they transition.

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Flexible consumption: Transformation framework

Our tested and proven flexible consumption transformation framework and methodology guides companies with confidence through all stages of the transition from business strategy through technical enablement. Our systematic, structured, and repeatable approach helps us identify interdependencies and pursue parallel tracks of decision-making and execution throughout the three primary phases of the transformation: decide, design, and deploy.
Business
strategy
Business
model
Business
capabilities
Operating
model
Technology
platform
Business strategy
Overall business strategy to drive flexible consumption business models for the organization
EXAMPLES
What kind of models are needed to drive future growth?
What is the complexity of business transformation?
What should be the pace of transformation? How is the strategy different relative to industry peers?
Business strategy transformation methodology
DECIDE
Should we offer flexible consumption?
How quickly should we transition?
How will the "old" and "new" co-exist?
Which markets and customers will we serve?
What are our flexible consumption revenue goals by product and market and in what sequence?
How will we manage investor expectations?
DESIGN
Leadership accountability framework for flexible consumption strategy
Revised leadership goals with flexible consumption metrics
Product roadmap
Customer transition plan
Investor communication plan
DEPLOY
Secure leadership commitment for flexible consumption
Secure funding and resources
Implement and monitor new flexible consumption goals
Track competitor actions and update plans
Execute product roadmap
Execute customer transition plan
Execute investor communication
Business model
High-level business scenario of "what" is sold, "to whom," and "how"
EXAMPLES
Who are my customers? What is the opportunity size?
What products and offers need to be delivered via a flexible consumption model?
What will be the desired customer and partner experience across the lifecycle?
Business model transformation methodology
DECIDE
What is the optimal business model?
How will we package and sell offerings?
How will we monetize and price?
What routes to market?
What contracting, commercial models?
What payment mechanisms?
DESIGN
Market offerings and solutions
Monetization model and pricing framework
Channel priorities, incentives, and partner program updates
Evolved buying/loyalty/conversion programs
Enhanced payment mechanisms
DEPLOY
Launch market offerings and solutions
Implement new pricing
Recruit new partners, enhance channel programs, and drive partner success
Launch new buying programs
Deploy new payment mechanisms
Business capabilities
Enablement of business capabilities, processes, and policies to support business model and operating model
EXAMPLES
What are the customer-facing capabilities (for example, lead and opportunity, configuration/price/quote)?
What are the operational capabilities (for example, offer lifecycle management, deal and pricing, usage tracking)?
What are the enterprise capabilities (for example, finance GL, revenue management, fixed asset management)?
Business capabilities transformation methodology
DECIDE
What is the target customer experience?
What capabilities do we require to be successful?
What gaps exist in our capabilities and how will we bridge these gaps?
What regulatory and compliance obligations must we meet?
How must we revise accounting and tax policies?
DESIGN
End-to-end customer and partner stories
Capability definitions and heat maps
Gap assessment, disposition, and prioritization
Tax, finance, and accounting compliance review
Process maps, policy updates, and training requirements
Build or buy analysis
DEPLOY
Implement process changes
Implement policy changes
Execute skills training
Execute capability acquisition and integration
Execute investor communication
Operating model
Combinations of people, process, and technology that define how an organization operates
EXAMPLES
How do we configure an optimal operating structure and define interactions between various stakeholders?
What is the appropriate talent model? How do we best incentivize employees and partners?
What will be the global vs. regional operating structure?
Operating model transformation methodology
DECIDE
How will we organize to support operations?
What will be our level of centralization?
What is our talent and compensation model?
What is our governance model?
Who has decision rights, where, when?
How will we manage change?
DESIGN
Future state organizational design
Definition of jobs/roles
Location/network design
KPIs and target operational metrics plan
DEPLOY
Execute changes to organization structure
Execute changes to jobs/roles
Execute changes to compensation structure
Execute new location plan
Implement new metrics and track
Technology platform
Automation of processes via technology platform-applications, infrastructure, data, integration, and security
EXAMPLES
Which applications are required to enable various business processes? (Build vs. buy vs. subscribe)
What is the infrastructure architecture to drive performance?
What should be the data model to support new business models?
Technology platform transformation methodology
DECIDE
What platform architecture best supports our strategy and objectives?
What technology shifts should we anticipate and plan for?
What do we insource vs. outsource?
What vendor(s) solution(s) should we adopt?
DESIGN
Logical architecture
Technical architecture
Business requirements
Technical requirements
Deployment scope and roadmap
Vendor evaluation plan
DEPLOY
Implement solution
Test solution
Execute technology adoption training and drive solution adoption
BUSINESS STRATEGY
Overall business strategy to drive flexible consumption business models for the organization
BUSINESS MODEL
High-level business scenario of "what" is sold, "to whom," and "how"
BUSINESS CAPABILITIES
Enablement of business capabilities, processes, and policies to support business model and operating model
OPERATING MODEL
Combinations of people, process, and technology that define how an organization operates
TECHNOLOGY PLATFORM
Automation of processes via technology platform-applications, infrastructure, data, integration, and security
EXAMPLES
What kind of models are needed to drive future growth?
What is the complexity of business transformation?
What should be the pace of transformation? How is the strategy different relative to industry peers?
Who are my customers? What is the opportunity size?
What products and offers need to be delivered via a flexible consumption model?
What will be the desired customer and partner experience across the lifecycle?
What are the customer-facing capabilities (for example, lead and opportunity, configuration/price/quote)?
What are the operational capabilities (for example, offer lifecycle management, deal and pricing, usage tracking)?
What are the enterprise capabilities (for example, finance GL, revenue management, fixed asset management)?
How do we configure an optimal operating structure and define interactions between various stakeholders?
What is the appropriate talent model? How do we best incentivize employees and partners?
What will be the global vs. regional operating structure?
Which applications are required to enable various business processes? (Build vs. buy vs. subscribe)
What is the infrastructure architecture to drive performance?
What should be the data model to support new business models?
Business strategy transformation methodology
Business model transformation methodology
Business capabilities transformation methodology
Operating model transformation methodology
Technology model transformation methodology
DECIDE
DESIGN
DEPLOY
Should we offer flexible consumption?
How quickly should we transition?
How will the "old" and "new" co-exist?
Which markets and customers will we serve?
What are our flexible consumption revenue goals by product and market and in what sequence?
How will we manage investor expectations?
Leadership accountability framework for flexible consumption strategy
Revised leadership goals with flexible consumption metrics
Product roadmap
Customer transition plan
Investor communication plan
Secure leadership commitment for flexible consumption
Secure funding and resources
Implement and monitor new flexible consumption goals
Track competitor actions and update plans
Execute product roadmap
Execute customer transition plan
Execute investor communication
What is the optimal business model?
How will we package and sell offerings?
How will we monetize and price?
What routes to market?
What contracting, commercial models?
What payment mechanisms?
Market offerings and solutions
Monetization model and pricing framework
Channel priorities, incentives, and partner program updates
Evolved buying/loyalty/conversion programs
Enhanced payment mechanisms
Launch market offerings and solutions
Implement new pricing
Recruit new partners, enhance channel programs, and drive partner success
Launch new buying programs
Deploy new payment mechanisms
What is the target customer experience?
What capabilities do we require to be successful?
What gaps exist in our capabilities and how will we bridge these gaps?
What regulatory and compliance obligations must we meet?
How must we revise accounting and tax policies?
End-to-end customer and partner stories
Capability definitions and heat maps
Gap assessment, disposition, and prioritization
Tax, finance, and accounting compliance review
Process maps, policy updates, and training requirements
Build or buy analysis
Implement process changes
Implement policy changes
Execute skills training
Execute capability acquisition and integration
Execute investor communication
How will we organize to support operations?
What will be our level of centralization?
What is our talent and compensation model?
What is our governance model?
Who has decision rights, where, when?
How will we manage change?
Future state organizational design
Definition of jobs/roles
Location/network design
KPIs and target operational metrics plan
Execute changes to organization structure
Execute changes to jobs/roles
Execute changes to compensation structure
Execute new location plan
Implement new metrics and track
What platform architecture best supports our strategy and objectives?
What technology shifts should we anticipate and plan for?
What do we insource vs. outsource?
What vendor(s) solution(s) should we adopt?
Logical architecture
Technical architecture
Business requirements
Technical requirements
Deployment scope and roadmap
Vendor evaluation plan
Implement solution
Test solution
Execute technology adoption training and drive solution adoption
Explore the full flexible consumption transformation methodology
Our decide, design, and deploy approach enables consistent and efficient execution of flexible consumption transformation.
DECIDE
DESIGN
DEPLOY
DECIDE
DESIGN
DEPLOY
Business strategy
Should we offer flexible consumption?
How quickly should we transition?
How will the "old" and "new" co-exist?
Which markets and customers will we serve?
What are our flexible consumption revenue goals by product and market and in what sequence?
How will we manage investor expectations?
Leadership accountability framework for flexible consumption strategy
Revised leadership goals with flexible consumption metrics
Product roadmap
Customer transition plan
Investor communication plan
Secure leadership commitment for flexible consumption
Secure funding and resources
Implement and monitor new flexible consumption goals
Track competitor actions and update plans
Execute product roadmap
Execute customer transition plan
Execute investor communication
Business model
What is the optimal business model?
How will we package and sell offerings?
How will we monetize and price?
What routes to market?
What contracting, commercial models?
What payment mechanisms?
Market offerings and solutions
Monetization model and pricing framework
Channel priorities, incentives, and partner program updates
Evolved buying/loyalty/conversion programs
Enhanced payment mechanisms
Launch market offerings and solutions
Implement new pricing
Recruit new partners, enhance channel programs, and drive partner success
Launch new buying programs
Deploy new payment mechanisms
Business capabilities
What is the target customer experience?
What capabilities do we require to be successful?
What gaps exist in our capabilities and how will we bridge these gaps?
What regulatory and compliance obligations must we meet?
How must we revise accounting and tax policies?
End-to-end customer and partner stories
Capability definitions and heat maps
Gap assessment, disposition, and prioritization
Tax, finance, and accounting compliance review
Process maps, policy updates, and training requirements
Build or buy analysis
Implement process changes
Implement policy changes
Launch and scale enterprise tools
Execute skills training
Execute capability acquisition and integration
Operating model
How will we organize to support operations?
What will be our level of centralization?
What is our talent and compensation model?
What is our governance model?
Who has decision rights, where, when?
How will we manage change?
Future state organizational design
Definition of jobs/roles
Location/network design
KPIs and target operational metrics
Execute changes to organization structure
Execute changes to jobs/roles
Execute changes to compensation structure
Execute new location plan
Implement new metrics and track
Technology platform
What platform architecture best supports our strategy and objectives?
What technology shifts should we anticipate and plan for?
What do we insource vs. outsource?
What vendor(s) solution(s) should we adopt?
Logical architecture
Technical architecture
Business requirements
Technical requirements
Deployment scope and roadmap
Vendor evaluation
Implement solution
Test solution
Execute technology adoption training and drive solution adoption

Decide, design, and deploy

Decide: A successful transformation to flexible consumption requires alignment and integration of key decisions for each of the five transformation elements. During this phase, we define and refine objectives, and prioritize accordingly to define what the future state should look like post-transformation.

Design: During this phase we identify metrics, create a customer transition plan, and determine how and when to communicate with investors. We also design the specific flexible consumption market offerings and payment mechanisms, as well as the technology platform itself, including logical architecture, business requirements, and the deployment roadmap.

Deploy: During the deployment phase, we implement all process and policy changes required for executing the new business model. This may include technology implementation, market launch activity, and change management, as well as acquisition and integration of additional capabilities. As part of the transition, we implement new pricing models, track competitor activities, and maintain a comprehensive communications program to keep leadership apprised and committed to the initiative.

Our systematic, structured, and repeatable approach helps us identify interdependencies and pursue parallel tracks of decision-making and execution throughout the three primary phases of the transformation: Decide, design, and deploy.

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