How can value chain and value network analysis be used to understand, benchmark, and redesign business performance in enterprise architecture?
Value chain analysis has been a cornerstone of business and enterprise architecture thinking since Michael Porter introduced the concept in 1985, but many practitioners use it only at a surface level — a high-level picture for executive discussions, rarely connected to the detailed process, capability, and information work that follows. This white paper argues for a more rigorous and structured approach, covering the full range of value chain thinking from single-organisation chains through to value networks and constellations involving multiple players.
The paper surveys the major reference models that build on Porter's foundation — including the Kotler extended value chain, SCOR (Supply Chain Operations Reference), and the Value Reference Model (VRM) — and introduces a structured template for documenting each value chain step in depth: satisfaction levels, challenges, opportunities, responsibilities, metrics, volumes, inputs, outputs, and benchmarks. This level of detail transforms the value chain from a conversation starter into a genuine analytical foundation for process improvement, outsourcing decisions, automation planning, and operating model design. Nine analysis dimensions are covered — time, resource, value added, cost, margin, quality, risk, automation, and responsibility — along with guidance on when to pursue incremental improvement (Kaizen-style) versus radical redesign driven by technology disruption or strategic opportunity.
Written as a practical reference for enterprise architects, business analysts, and strategy practitioners, the paper includes worked examples from banking and telecommunications, as well as a discussion of how digital technologies are fundamentally reshaping value chains in manufacturing and publishing.
Pages: 18
Originally published as a white paper by Graham McLeod, Inspired.org, Q3 2012.