by Fred A. Cummins

of Agile Enterprise Design (AED)

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Introduction to VDML based Value Chain Modeling: Linking Customer Value to Business Process Design and Automation

It’s been 25 years since Michael Porter introduced value chain analysis in his book Competitive Advantage: Creating and Sustaining Superior Performance.

The business landscape has changed considerably in that time, but the basic principles Porter introduced have not changed.
The goal of value chain analysis is to focus on delivery of value to the customer. The value chain provides a business abstraction focused on capabilities and their relationships to value delivery.

In this article, Fred will first outline objectives for a value chain modeling capability. Fred will then discuss the components of a value chain model, followed by a discussion of the relationship of the model to operational business processes and IT solutions. Finally, Fred will discuss the potential business benefits of value chain modeling:

  • Enhanced customer value
  • Improved governance
  • Economies of scale
  • Focused process improvement
  • Agile business adaptation
  • Business-IT alignment

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