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Home Page for the Information Technology (IT) Discipline

"Value Chain Management"


Table of Contents

Introduction: Introduction to Value Chain Management
Framework: Using This Artifact as a "Value Chain Management Framework"
Key Terms: Key Terms for Value Chain Management
Glossary: The "Value Chain Management Glossary"
Capabilities: Value Chain Management as an Enterprise Capability
Ownership: Clearly Defined Value Chain Management Ownership is Critical for Success
Verbs and Actions: Understanding Why Verbs and Actions are Important to Value Chain Management
Roles: Key Verb and Action Driven Roles For Value Chain Management
Taxonomy: Understanding Value Chain Management Classifications or Categorizations
Ontology: Value Chain Management Ontology as a Means for Language Standardization
Life Cycle (Lifecycle): Lifecycle Phases for Value Chain Management
Inventories: Value Chain Management Inventories
Environments: Value Chain Management Environments
Metrics: Value Chain Management Metrics
Services: Value Chain Management as a Set of Services (a.k.a. Value Chain Management Services)
Service Paradigms: Centralized Value Chain Management vs. Federated Value Chain Management
Principles & Best Practices: Common Principles and Best Practices for Value Chain Management
Further Reading and Reference Material for Value Chain Management


Introduction: Introduction to Value Chain Management

This document represents an aggregated, ordered and contextualized view of the material we've been able to compile and publish that is related to the topic of "Value Chain Management." The goal is to make this page a landing and launch point for all things related to this topic. As our content becomes more complete and more accurate, this page should become a very useful and powerful knowledge base for this topic and all parties interested in it.

You'll find that the content for this document is consistent with that of other discipline related documents. This is intentional. The consistency is based on a knowledge pattern that helps individuals learn more about different topics, quicker and more efficiently. We hope you find the material useful and easy to learn.

It's important to realize that content in this document and any related sub-documents are constantly evolving. Therefore, we recommend you check for updates, regularly, to keep up with the latest material.

The Foundation always welcomes your feedback and suggestions for improvement, as we're always looking for ways to improve our solutions and offerings to the general community.

All solutions published by the Foundation are subject to the terms and conditions of the Foundation's Master Agreement.


Framework: Using This Artifact as a "Value Chain Management Framework"

This document or artifact, along with everything in it, is intended to act as a "Framework" that addresses various aspects of Value Chain Management.

The readers will notice that most sections in the Table of Contents (TOC) use a format where the TOC entry is prefixed with a topic name, followed by a short descriptive title (i.e. "TOPIC_NAME: TOPIC_RELATED_SECTION_TITLE"). This is intentional and represents a format by which the Foundation may achieve things like the identification of appropriate topic areas, the segregation of distinct topic areas from each other, the appropriate ordering of topic areas, and achieve the maintenance of consistency, both, within and across different IT Disciplines.

To elaborate, this artifact is intended to:

  1. Organize different areas of the discipline known as Value Chain Management into clear and compartmentalized areas that allow the Foundation to more effectively and productively collect, document and publish information that pertains to this discipline.
  2. Decompose each area of Value Chain Management into smaller and, therefore, more digestible units for more efficient learning and understanding.
  3. Document common industry wisdom about each area, piece or subcomponent of Value Chain Management
  4. Act as a set of Value Chain Management related best practices and guidelines that have been collected, documented, and published for the benefit of IT Professionals, regardless of their specific industry, line of business, or area of expertise.
  5. Act as a consistent and repeatable pattern for documenting, publishing and learning, both, within this Discipline and across "all" Disciplines.

From the Foundation's perspective, if done correctly, all of the above will allow the Foundation to properly decompose, document and publish content related to each sub-area or sub-topic for each IT Discipline, including this specific discipline (i.e. "Value Chain Management").

From the reader's perspective, if done correctly, all of the above will allow him or her to easily find and learn about specific areas of interest associated with this and all other IT Disciplines in a manner where the reader may effectively consume and digest material in small atomic segments that act as repeatable and more effective learning units.

As this artifact evolves and progresses, the reader will see it address key areas of the professional IT Discipline "Value Chain Management" that range from its detailed definition through closely related terms, phrases and their definitions, to its detailed specification of Value Chain Management Capabilities, and all the way through to defining, delivering, operating and supporting Value Chain Management Services.

As mentioned previously, this document will continue to evolve and the Foundation recommends the reader check back, regularly, to stay abreast of modifications and new developments. It is also important to understand that the structure of this artifact may change to meet the needs of such evolution.


Key Terms for Value Chain Management

Before moving on to learn more about the rest of the Value Chain Management framework, we suggest that you take some time to familiarlize yourself with the following very basic term(s)...

Value Chain:

"1. A sequenced flow (i.e. chained set) of Capabilities, Activities, or Functions that are performed by an Organization, an Enterprise, or a Service Provider that allows it to provide value or be competitive within a specific domain of operations, such as in the case of an Industry or even a Service Area."

Value Chain Management:

"1. The professional discipline that involves working with, in or on any aspect of planning, delivering, operating or supporting for one or more Value Chain Items or any and all solutions put in place to deal with such Items.

2. The solution set that a person or organization puts in place to manage one or more Value Chain Items.

3. The process or processes put in place by a person or organization to assist in the management, coordination, control, delivery, or support of one or more Value Chain Items.

4. The Enterprise Capability that represents the general ability or functional capacity for a Resource or Organization to deal with or handle one or more Value Chain Items. Such a term is often used by Information Technology (IT) Architects when performing or engaging in the activities associated with general Capability Modeling."

In addition to the above basic term(s), you can also learn a great deal about Value Chain Management by familiarizing yourself with the broader spectrum of terms that make up the Value Chain Management Glossary...


Glossary: The "Value Chain Management Glossary"

IT Glossary

Language between IT professionals and the businesses we serve is often a significant barrier to success, as we often spend countless hours trying to interpret each other's meanings. This is often also true between IT professionals who are taught to use certain terms and definitions as part of the organizations and industries they serve. It's when you start to jump from organization to organization, from enterprise to enterprise, and from industry to industry that you realize how much time and effort is wasted on just getting language and meanings correct. For these reasons, the Foundation puts a great deal of focus on terms and phrases, as well as their corresponding definitions. We highly recommend you spend time learning and understanding all of the related terms and phrases, along with their meanings, for all areas of "Value Chain Management."

Value Chain Management Glossary
Centralized Value Chain Management Value Chain Management Principle
Decentralized Value Chain Management Value Chain Management Procedure
Enterprise Value Chain Management Value Chain Management Process
Federated Value Chain Management Value Chain Management Professional
Regional Value Chain Management Value Chain Management Program
Value Chain Value Chain Management Project
Value Chain Automation Value Chain Management Reference Architecture
Value Chain Capacity Management Value Chain Management Release
Value Chain Catalog Value Chain Management Report
Value Chain Catalogue Value Chain Management Reporting
Value Chain Configuration Value Chain Management Roadmap
Value Chain Configuration Item Value Chain Management Role
Value Chain Configuration Management Value Chain Management Rule
Value Chain Cost Value Chain Management Schedule
Value Chain Data Entity Value Chain Management Security
Value Chain Database Value Chain Management Service
Value Chain Decommission Value Chain Management Service Assurance
Value Chain Delivery Value Chain Management Service Contract
Value Chain Dependency Value Chain Management Service Level Agreement (SLA)
Value Chain Deployment Value Chain Management Service Level Objective (SLO)
Value Chain Document Value Chain Management Service Level Requirement (SLR)
Value Chain Document Management Value Chain Management Service Level Target (SLT)
Value Chain File Plan Value Chain Management Service Provider
Value Chain Framework Value Chain Management Service Request
Value Chain Governance Value Chain Management Software
Value Chain History Value Chain Management Solution
Value Chain Identifier Value Chain Management Stakeholder
Value Chain Inventory Value Chain Management Standard
Value Chain Item Value Chain Management Strategy
Value Chain Lifecycle Value Chain Management Supply
Value Chain Lifecycle Management Value Chain Management Support
Value Chain Management Value Chain Management System
Value Chain Management Application Value Chain Management Theory
Value Chain Management Best Practice Value Chain Management Training
Value Chain Management Blog Value Chain Management Vision
Value Chain Management Capability Value Chain Management Wiki
Value Chain Management Center of Excellence Value Chain Management Workflow
Value Chain Management Certification Value Chain Metadata
Value Chain Management Class Value Chain Migration
Value Chain Management Community of Practice (CoP) Value Chain Plan
Value Chain Management Course Value Chain Portfolio
Value Chain Management Data Value Chain Portfolio Management
Value Chain Management Data Dictionary Value Chain Processing
Value Chain Management Database Value Chain Record
Value Chain Management Demand Value Chain Records Management
Value Chain Management Dependency Value Chain Repository
Value Chain Management Discussion Forum Value Chain Reuse
Value Chain Management Document Value Chain Review
Value Chain Management Documentation Value Chain Schedule
Value Chain Management File Plan Value Chain Schematic (Schema)
Value Chain Management Form Value Chain Security
Value Chain Management Framework Value Chain Software
Value Chain Management Governance Value Chain Strategy
Value Chain Management Knowledge Value Chain Support
Value Chain Management Lessons Learned Value Chain Taxonomy
Value Chain Management Metric Value Chain Termination
Value Chain Management Operating Model Value Chain Tracking
Value Chain Management Organization Value Chain Tracking Software
Value Chain Management Plan Value Chain Transaction
Value Chain Management Platform Value Chain Unique Identifier
Value Chain Management Policy Value Chain Verification
Value Chain Management Portfolio Value Chain Version
Value Chain Management Principle Value Chain Workflow

Please refer to the IT Glossary for other terms and phrases that may be relevant to this professional discipline.

Readers may also refer to the Taxonomy of Glossaries for terms and phrases that are semantically grouped according to IT Disciplines or enterprise domains.

This Value Chain Management Glossary is a contextual subset of the master IF4IT Glossary of Terms and Phrases. The master glossary can be used by you and your enterprise as a foundation for broader understanding of Information Technology and can be used as a teaching and learning tool for those you work with, helping to ensure a common and more standard language.


Capabilities: Value Chain Management as an Enterprise Capability

A Capability, as it pertains to Information Technology (IT) or to an enterprise that an IT Organization serves, is defined to be "A manageable feature, faculty, function, process, service or discipline that represents an ability to perform something which yields an expected set of results and is capable of further advancement or development. In other words, a Capability is nothing more than "the ability to do something" or, quite simply, a Feature or Function. Therefore, when applied to an enterprise, a Capability represents a critical Enterprise Feature or Enterprise Function.

When it comes to Capabilities, there are multiple types that an enterprise needs to be aware of. Examples include but are not limited to:

As can be seen above, there are Capabilities that are associated with Resources, Organizations, and Assets such as Systems. All are important to an enterprise.

In the case of this IT Discipline (i.e. Value Chain Management), we use the word Capability in the context of an Enterprise Capability or an IT Capability, which are both equivalent to Enterprise Disciplines or IT Disciplines, respectively. In short, the Capability of Value Chain Management represents the ability to deal with any and all Value Chain Items and anything relevant that is related to or associated with any Value Chain Items.

If you think about it, a capability is really nothing more than a "verb" or "action that represents "the ability to do something." Understanding this allows us to derive a consistent and highly repeatable set of sub-capabilities for any Noun we're dealing with. For example:

In summary, the implication is that the Enterprise Capability or Enterprise Discipline known as Value Chain Management is the superset of all the above Sub-Capabilities, as they pertain to or are applied to the discipline-specific Noun: "Value Chain." This now translates more specifically to:

For a more complete list of very specific Capabilities/Disciplines, refer to the Foundation's Master Inventory of IT Disciplines. It is important to note that this inventory is in a flat or non-hierarchical form, specifically because "hierarchy" is almost always a matter of personal preference or context (what hierarchy is important to one Resource or Organization may be unimportant to another's needs or requirements). Therefore, the Foundation has published its inventory of Capabilities in a non-hierarchical, flat form.

This now brings us to a very obvious problem that surrounds Capabilities, which is the fact that there are simply too many "granular" or "specific" Capabilities to document and publish in any single Capability Model. The end result is that a Capability Model may become unwieldy because of trying to incorporate so many different specific Capabilities. Also, Capability Modeling "Purists," who all have their own (and very differing) opinions about how Capability Models should or should not be represented, almost always refuse to get into the details. To address this, we recommend using a generic set of Capabilities that map to and are driven by the Systems Development Life Cycle. For example:

As you can see from the above, we now have a very limited, controlled and manageable set of Discipline-specific Capabilities for the Discipline Value Chain Management.

As a reminder, the above Capability representations are "suggestions" for baselining or initializing your own Enterprise Capability Model (ECM). It's recommended that you take the time to work with your enterprise stakeholders to improve upon and/or customize your own ECM so that you can help meet their needs. However, with that being said, it's always a better idea to go in with a baseline that you can modify rather than building your own solution from scratch, especially if your goals are to standardize, not reinvent the wheel, and not deviate too far from what other enterprises are doing to model their own environments. This is especially true if you've never had any experience building ECMs that have gained and maintained full adoption.

Why do enterprises perform Capability Modeling? Enterprises most often build Capability Models that are associated with Value Chain Management for the following reasons...

Capability Modeling Recommendations: Some things to consider and keep in mind when working on or creating your Value Chain Management and Enterprise Capability Models...

Learn More About Capability Models: Taking the time to learn about and understand Capability Models, what they're for, and how they're used may help you learn how Value Chain Management better fits into the broader enterprise. Therefore, we suggest you spend some time reviewing and understanding the IF4IT Enterprise Capability Model...

Enterprise Capability Model

Ownership: Clearly Defined Value Chain Management Ownership is Critical for Success

IT Discipline Ownership

Here's a very simple fact... If an enterprise does not establish and enforce clearly defined Ownership (i.e. a Resources and his or her Organization are assigned as accountable ownership) for Value Chain Management, the enterprise has automatically set itself up for failure in its implementation of that discipline. Therefore, if you and your enterprise want to implement and maintain a successful solution for Value Chain Management, there must be a clearly defined Owner that can and will be held accountable for getting work done, providing transparency, helping with strategy setting, and coordinating implementation of Value Chain Management as a fully functional and mature enterprise Service.

Having clearly defined Ownership should not be confused with having fully dedicated Resources that spend one hundred percent of their time working on Value Chain Management. In fact, smaller enterprises can rarely afford to dedicate full time Resources, like larger enterprises can, to all enterprise IT Disciplines. This being the case, all IT Disciplines, including Value Chain Management, should "always" have clearly defined Owners so that there is always a clear point of accountability and contact for any issues or work that need to be addressed.

In addition to the common best practice of having clearly assigned Ownership for Value Chain Management, it is also considered a best practice to clearly publish and socialize Value Chain Management Ownership details to a centralized location (often referred to as a "Service Catalog" or an "Enterprise Service Catalog"), along with Ownership details for all other IT Disciplines, so that the entire enterprise has constant access to it.

Canonical Ownership of an Enterprise Capability

Figure: How Ownership of the Capability Value Chain Management fits into the Canonical Model for IT

The above figure helps us understand how Capability or Discipline Ownership fits into the Canonical Model for Information Technology (IT) (i.e. "Think," "Deliver," and "Operate"). Owners are assigned to individual Disciplines or Capabilities, such as Value Chain Management, and are instantly made accountable to the enterprise for the results of all Value Chain Management Thinking activities (i.e. Strategy, Research, Planning and Design), all Value Chain Management Delivery activities (i.e. Construction, Deployment and Quality Assurance), and all Value Chain Management Operations activities (i.e. Use, Maintenance and Support). Done correctly, Value Chain Management Ownership is constant and ongoing. It's important to understand that such assigned Ownership should "never" end so that there is clear and constant accountability and transparency for all aspects of the Canonical Model to the enterprise.

Not having clear Ownership for Value Chain Management means that there is no clear understanding of who is accountable for it, who can provide understanding of what's going on within it, who can help the enterprise provide short term and long term descriptions of work being performed within the Discipline area to improve it over time for its customers, and who can help with getting work done that's associated with it. It means your or your enterprise's implementation for Value Chain Management will be highly incomplete and erratic because no one is constantly (or even partially) watching over the Discipline and its needs for maintenance and evolution. Not having clear Value Chain Management Ownership is a recipe for confusion and, sometimes, even chaos.

In summary, if you and your enterprise truly want to be successful with your implementation of Value Chain Management, ensure that a clear and highly accountable owner is identified and assigned to the Discipline. Publish those ownership details, preferably in an enterprise's Service Catalog, and socialize it so everyone knows whom to go to for answers and for help with Value Chain Management related work. In other words, if you want to implement Value Chain Management as an enterprise Service, then you absolutely must start with clearly defined, published and socialized Ownership.


Verbs and Actions: Understanding Why Verbs and Actions are Important to Value Chain Management

Throughout the Foundation's documentation, you will continuously run into the references of "Nouns and Verbs." These concepts are key to consistency and standardization, throughout the IT Industry, down to each and every IT Discipline. Given that we've discussed the impact of "Nouns" on the discipline of "Value Chain Management," this section will start to discuss the importance of "Verbs" or "Actions" that can be performed with or against the key Noun or Nouns associated with this Discipline. To reiterate, Verbs or Actions allow us to clearly understand what can be performed on or with the Noun in question. As will be discussed in the next section, Verbs or Actions will also help us clearly identify whom it is (i.e. the "who" or more specifically the Roles) that performs or executes such Verbs or Actions against a Discipline and its associated Noun or Nouns. As will be discussed later, Verbs or Actions will also help identify key Attributes (i.e. Field Names) that are necessary for the very data definition of the Noun or Nouns for this Discipline and will even help identify which Verbs or Actions can be automated for this Discipline.

As a reminder, the base Noun for the discipline known as Value Chain Management is: "Value Chain," which is sometimes referred to as a the Noun: "Value Chain Item."

By now, it should be becoming apparent that verbs represent a baseline for defining solid functional requirements and sub-capabilities for what would be a part of any good Value Chain Management System or Service. What this means is that if you and/or your Organization is looking for a solution in this space (e.g. the purchasing or building of a software solution or the implementation of a Service to address the needs of Value Chain Management), you could use discipline-related verbs to drive the foundation of what the solution should or shouldn't do, as mapped to specific stakeholders that will use or provide the solution.

Examples of the types of Verbs or Actions that are important to this Discipline include but are not limited to:

The above list represents a very small subset of all Verbs or Actions that are relevant for this Discipline. The more complete set can be found in the Roles section of this document, where readers can see the direct correlation of Verb to Noun and to, both, Generic Role and Discipline Specific Role.


Roles: Key Verb and Action Driven Roles For Value Chain Management

An "action" or a "verb" is something that can be performed on or with a specific "noun." The reason it is important to itemize all relevant verbs is because we can now start to determine what we can or cannot do with the noun in question, where in this case the noun is "Value Chain."

Actions/Verbs Example as Applied to "Value Chain" Generic Roles Discipline-Specific Roles
Administrate Administrate Value Chain Administrator Value Chain Administrator
Approve Approve Value Chain Approver Value Chain Approver
Architect Architect Value Chain Architector Value Chain Architector
Archive Archive Value Chain Archiver Value Chain Archiver
Audit Audit Value Chain Auditor Value Chain Auditor
Bundle Bundle Value Chain Bundler Value Chain Bundler
Clone Clone Value Chain Cloner Value Chain Cloner
Code Code Value Chain Coder Value Chain Coder
Configure Configure Value Chain Configurer Value Chain Configurer
Copy Copy Value Chain Copier Value Chain Copier
Create Create Value Chain Creator Value Chain Creator
Decommission Decommission Value Chain Decommissioner Value Chain Decommissioner
Delete Delete Value Chain Deletor Value Chain Deletor
Deploy Deploy Value Chain Deployer Value Chain Deployer
Deprecate Deprecate Value Chain Deprecator Value Chain Deprecator
Design Design Value Chain Designer Value Chain Designer
Destroy Destroy Value Chain Destroyer Value Chain Destroyer
Develop Develop Value Chain Developer Value Chain Developer
Distribute Distribute Value Chain Distributor Value Chain Distributor
Download Download Value Chain Downloader Value Chain Downloader
Edit Edit Value Chain Editor Value Chain Editor
Educate Educate Value Chain Educator Value Chain Educator
Export Export Value Chain Exporter Value Chain Exporter
Govern Govern Value Chain Governor Value Chain Governor
Import Import Value Chain Importer Value Chain Importer
Initialize Initialize Value Chain Initializer Value Chain Initializer
Install Install Value Chain Installer Value Chain Installer
Instantiate Instantiate Value Chain Instantiator Value Chain Instantiator
Integrate Integrate Value Chain Integrator Value Chain Integrator
Manage Manage Value Chain Manager Value Chain Manager
Merge Merge Value Chain Merger Value Chain Merger
Modify Modify Value Chain Modifier Value Chain Modifier
Move Move Value Chain Mover Value Chain Mover
Own Own Value Chain Owner Value Chain Owner
Package Package Value Chain Packager Value Chain Packager
Persist Persist Value Chain Persister Value Chain Persister
Plan Plan Value Chain Planner Value Chain Planner
Purge Purge Value Chain Purger Value Chain Purger
Receive Receive Value Chain Receiver Value Chain Receiver
Record Record Value Chain Recorder Value Chain Recorder
Recover Recover Value Chain Recoverer Value Chain Recoverer
Register Register Value Chain Registrar Value Chain Registrar
Relocate Relocate Value Chain Relocator Value Chain Relocator
Reject Reject Value Chain Rejecter Value Chain Rejecter
Remove Remove Value Chain Remover Value Chain Remover
Replicate Replicate Value Chain Replicator Value Chain Replicator
Report Report Value Chain Reporter Value Chain Reporter
Request Request Value Chain Requestor Value Chain Requestor
Restore Restore Value Chain Restorer Value Chain Restorer
Review Review Value Chain Reviewer Value Chain Reviewer
Save Save Value Chain Saver Value Chain Saver
Search Search Value Chain Searcher Value Chain Searcher
Split Split Value Chain Splitter Value Chain Splitter
Sponsor Sponsor Value Chain Sponsor Value Chain Sponsor
Store Store Value Chain Storer Value Chain Storer
Strategize Strategize Value Chain (or Set Value Chain Strategy) Strategizer (or Strategy Setter) Value Chain Strategizer (or Value Chain Strategy Setter)
Support Support Value Chain Supporter Value Chain Supporter
Test Test Value Chain Tester Value Chain Tester
Train Train Value Chain Trainer Value Chain Trainer
Upgrade Upgrade Value Chain Upgrader Value Chain Upgrader
Upload Upload Value Chain Uploader Value Chain Uploader
Verify Verify Value Chain Verifier Value Chain Verifier
Version Version Value Chain Versioner Value Chain Versioner
View View Value Chain Viewer Value Chain Viewer

At a minimum, the above list of Verbs can be used to help identify, track, and manage the basic "Features" required by and associated with Value Chain Management, even if your enterprise doesn't maintain a Capability Model that lists specific Value Chain Management Capabilities. Application designers, developers, and architects often find such Verb Lists or Feature Inventories to be invaluable.


Taxonomy: Understanding Value Chain Management Classifications or Categorizations

IF4IT Taxonomies

A Taxonomy, in its noun form, is defined as:

...a documented and orderly set of types, classifications, categorizations and/or principles that are often achieved through mechanisms including but not limited to naming, defining and/or the grouping of attributes, and which ultimately help to describe, differentiate, identify, arrange and provide contextual relationships between the entities for which the Taxonomy exists.

From this general definition, we can derive that the definition for a Value Chain Management Taxonomy is:

...a documented and orderly set of types, classifications, categorizations and/or principles that are often achieved through mechanisms including but not limited to naming, defining and/or the grouping of attributes, and which ultimately help to describe, differentiate, identify, arrange and provide contextual relationships between Value Chain Items, Entities or Types.

In short, what this means all means is that a Taxonomy is nothing more than a classification or typing mechanism and that a Value Chain Taxonomy is nothing more than a classification or typing mechanism that helps people and systems distinguish between different Value Chain Items, Entities, Types, Records or any other Value Chain Management element you can think of.

It's important to understand that Taxonomies can be as simple as a list of relevant terms or phrases with respective meanings or definitions or they can take on more complex forms, such as hierarchical and graphical model structures that can be homogeneous and heterogeneous in nature. More complex Taxonomies include examples such as "Visual Taxonomies" and "Audible Taxonomies" but, expect in the case of very special technologies, are typically out of scope for general Information Technology (IT) Operations.

The Foundation directs readers to its ever-evolving Inventory of Taxonomies for Standard Taxonomy suggestions. Specifically, readers may want to start with the Taxonomy of Taxonomies, which helps make it clear that the IT Industry is composed of many hundreds if not thousands of Taxonomies, Classifications, Categorizations or Types.


Ontology: Value Chain Management Ontology as a Means for Lanagugae Standardization

While Taxonomies represent organized classifications or types, you can think of Ontologies as the design and representation of entire lanaguages, with the specific intent to control things like structure, behavior, representation, and meaning. Without getting into a theoretical conversations about Ontologies, you can view this entire article as a foundation for the ontology of Value Chain Management. Or, in other words, a Value Chain Management Ontology.

Throughout this artifact/framework, you will find things like Value Chain Management related terms, phrases, definitions, roles, responsibilities, nouns, verbs, classifications, and so on, all as a means of definining a standard representation for and interpretation of the language of Value Chain Management.

It is only through the definition, communication, and establishment of such Ontologies that we can standardize language and communication associated with Value Chain Management, whether it be between humans and/or systems.


Life Cycle (Lifecycle): Lifecycle Phases for Value Chain Management

When we talk about Life Cycle (or lifecycle) for Value Chain Management, it's important to keep in mind that there are two different types of Life Cycles that apply. The first is a Data Life Cycle, which addresses Value Chain Management data or entities, and the second is associated with delivering Value Chain Management Assets like Systems or Software solutions.

Value Chain Management Data Life Cycle Phases:

Data Lifecycle (or Life Cycle) for any and all data is the period from the "inception" of data through to its ultimately being "purged" from existence. This is no different for Value Chain Management related data.

Like the data associated with any other professional IT Discipline, Value Chain Management related data adheres to the following common Data Lifecycle Phases:

Data Lifecycle Phases

Figure: Value Chain Management Lifecycle Phases

  1. Inception: Data is in it's raw idea-like form and is not ready for consumption by the general population because it has not been documented or registered, anywhere, in a formal manner.
  2. Creation and Registration: Data is formally put into existence for day-to-day use by appropriate stakeholders.
  3. Iterative Maintenance: Data is in a mode of constant use and is updated and modified, as needed, to meet the needs of daily use by various stakeholders.
  4. Decommission and Deletion: Data is prepared for deletion and eventually deleted from daily operational use but still exists for administrative or organizational purposes, such as historical auditing. It can be restored to any one of its relevant last states and, therefore, can be brought back into existence for day-to-day use.
  5. Purged From Existence: Data is completely removed from an environment with no means to restore or reconstruct it, without recreating it from scratch and with no guarantees that it will match it's previous state.

The above Life Cycle Phases represent the high level transitions that occur from the inception of Value Chain Items or Entities all the way through to their complete elimination from existence. A more detailed breakdown of these transitions or phases represents what are referred to as "Value Chain Management States."

Value Chain Management Systems Development Life Cycle (SDLC) Phases or Value Chain Management Software Development Life Cycle (SDLC) Phases:

The SDLC is a means for facilitating and controlling how IT Professionals deliver Assets, such as Value Chain Management Systems and Software. In this case, you should default to the master SDLC, which is used to deliver any Asset of any type, including those associated with the Value Chain Management discipline.

Value Chain Management SDLC Diagram

Inventories: Value Chain Management Inventories

There are probably no greater or more important tools for providing Value Chain Management transparency and direction than the collection, ordering, categorizing, grouping, and maintenance of all related Value Chain Items. In other words, Value Chain Management Inventories.

In short, an Inventory represents a list of individual things or instances of things that are typically all of the same Noun Type or Data Type, where these instances are described and detailed by their Attributes, along with the Data and Information that act as values for such Attributes.

At a minimum, Value Chain Management Inventories are used for the establishment of solid Value Chain Configuration Management practices, as the Value Chain Instances tracked within such Value Chain Inventories act as Configuration Items (in Target and/or Dependency form) for key Configurations (Value Chain Management Configurations or otherwise).

Inventories are also used for solid decision making. Good decisions, either strategic or tactical, are made based on having good Data and Information. And, good Data and Information only come from taking the time to follow best practices associated with Inventory Management. It's only through building such Inventories that an enterprise can achieve solid Value Chain Management Business Intelligence and Reporting.

Also, it's these very same Inventories that act as the foundation for understanding and managing Total Cost of Ownership (a.k.a. "TCO") for Value Chain Management. Without such Inventories, trying to understand your costs can be nothing more than uneducated guessing.

The obvious place to start is with Value Chain Inventories and then move on to surrounding Inventories that are directly and indirectly related to Value Chain Management.

Additionally, there are many other types of Inventories that are common and important to Value Chain Management, which include but are not limited to examples such as:

  1. People and Organizations related to Value Chain Management
  2. Roles, Responsibilities, and Skills related to Value Chain Management
  3. Products and Services related to Value Chain Management
  4. Capabilities related to Value Chain Management
  5. Contracts, Agreements, and Licenses related to Value Chain Management
  6. Processes related to Value Chain Management
  7. Tools and Technologies (e.g. Systems/Applications/Software/Computers) related to Value Chain Management
  8. Data Types and Instances related to Value Chain Management
  9. Data Interfaces related to Value Chain Management
  10. Environments related to Value Chain Management
  11. Facilities and Locations related to Value Chain Management

If you and/or your enterprise are not collecting and maintaining such Inventories, you're probably considered to be very low on the efficiency and effectiveness maturity scale.

It's important to keep in mind that collecting and managing Value Chain Management Inventories is something that should be performed across all phases of Value Chain Management Lifecycle and across all Environments (i.e. Value Chain Management Environments). Both are considered to be very important Best Practices. For example, you and/or your enterprise cannot get a complete understanding of Value Chain Management costs or impacts without knowing all related Inventory Items in all environments. And, tracking across all lifecycle phases gives a temporal perspective that is important for things like problem analysis, historical reporting, and the reconstruction of state (i.e. Configuration Management).

NOTE: Value Chain Management Inventories are also important for other enterprise functions, such as Architecture and Design. Such Inventories represent the foundation for understanding an enterprise's Current State and are critical for planning Future State and any related strategies, roadmaps, and transition plans for facilititating change.


Environments: Value Chain Management Environments

Building environments that are specific to and for the discipline known as Value Chain Management is no different than doing so for any other discipline area. The reader should, therefore, refer to the IT Environment Framework to understand such environments.

IT Environment Framework for Value Chain Management

Metrics: Value Chain Management Metrics

As with any professional Discipline, the place to start with when dealing with Value Chain Management specific metrics is with standard metrics categorizations. Standard Metrics Categorizations, or what are commonly referred to as "SMCs," include but are not limited to...

Value Chain Management Quantitative Metrics: Quantitative metrics for Value Chain Management often revolve around the "counting" of key constructs that are associated with the Discipline. For example, the number of Value Chain Items or Entities that have been Created, Edited or Modified, Copied or Cloned, Destroyed, Archived, Restored, etc. (Note the correlations to key Value Chain Management Verbs!). Also, the counts for things like the number of Value Chain Management Stakeholders, such as but not limited to Paying Customers, End Users, Employees, Consultants, etc. are also very useful.

Value Chain Management Qualitative Metrics: Qualitative metrics for Value Chain Management often revolve around concepts such as Value Chain Management Defects, Failures, Problems, Incidents, and/or Issues. So, for example, if we were to capture the number of Value Chain Management Defects (i.e. their counts) over time, we could do things like see if Defect quantities are going up or down, over time, allowing us to explore that area for things like correlating Causes and Effects.

Value Chain Management Time Metrics: When dealing with Value Chain Management Time Metrics, there are usually two forms. The first was introduced in the previous paragraph, which has to do with capturing and measuring things like Quantitative or Qualitative Metrics, over time. In this case, we capture other metric categories, over time, with the intent to see how they change and perform, based on modifications to the Value Chain Management Operating Environment. The second form of Time related metrics has to do with system or operational performance, such as in the case of how long it takes to process a Value Chain Management Request, from the time it is created to the time the Requester gets a satisfactory deliverable that allows him or her to move on with his or her work.

Value Chain Management Utilization Metrics: Utilization Metrics specifically have to do with the consumption of Value Chain Management specific solutions or deliverables. For example, tracking the number of Value Chain Management Service Requests, over periods of time, along with their corresponding Value Chain Management Deliverables, allows one to measure how active Value Chain Management Services are against other Services that may exist within the Enterprise.

Value Chain Management Financial Metrics: As is always the case for any single Discipline, Financial Metrics for Value Chain Management always revolve around things like revenue, expenses, and profits, both, for operators of the Service or Services and for consumers of the Service or Services. For example, if a Value Chain Management Request is invoked by a Value Chain Management Customer (acting as the "Requester"), it becomes important to be able to identify and understand what the cost is to that Customer who is invoking the Request, and it also becomes important to understand why that cost is what it is. In the case of Services that do not yield revenue or profits, measuring costs is a strong way to, at very least, help understand the costs associated with each Service being performed by, within, external to, and for the Enterprise and its Customers.

Note: It's important to understand that, when it comes to metrics, enterprises should take a "Crawl," "Walk," "Run" approach to collecting, working with, and understanding them. That is, you cannot get to complex metrics collection, dissection, analysis, and understanding until you start with basic metrics and slowly work your way to more complex metrics representations.


Services: Value Chain Management as a Set of Services (a.k.a. Value Chain Management Services)

One of the most important concepts you will learn about Value Chain Management (or any Discipline, for that matter) is the notion of implementing the Discipline as an accountable, planned, controlled, transparent, and managed "Service."

In short, Services represent a logically "bounded" and repeatable sets of work types, activities or tasks that are performed by humans and/or machines, with the specific intent to provide outputs or deliverables, in the form of solutions for the requesting Stakeholders who are commonly considered the customers of such Services. In other words, we perform and/or provide a Service to deliver very specific solutions to very specific Stakeholders who are looking for a means to solve a certain problem they have.

A Value Chain Management Service is defined as:

"1. A set of solutions, either transactional (i.e. Transactional Value Chain Management Services) or dial-tone (i.e. Dial-Tone Value Chain Management Services), that are being or have been put in place to yield an intended, controlled, expected, repeatable and measurable set of results or deliverables for Value Chain Management specific Customers, Consumers or Clients.

NOTE: Value Chain Management Service Consumers or Clients can be either Human Resources or Systems."

All Services, including Value Chain Management Services, can be performed manually (i.e. by people), automatically (i.e. by machines such as Computers), or by a combination of the two (i.e. a hybrid that is both manually and automated).

Also, all Services, including Value Chain Management Services, can be either transactional or dial tone, in nature.

In the case of Transactional Services for Value Chain Management, a Service Request is submitted and that Request is fulfilled as part of a process that is either manual, automated, or a hybrid of both (e.g. a Service to perform maintainance on your Value Chain Management System).

In the case of Dial Tone Services for Value Chain Management, a Service is expected to be up, running, available, and accessible to an End User so that he/she/it may perform some controlled and highly repeatable function (e.g. a "Value Chain Management System" that is up and running all the time).

Value Chain Management Service Components: The successful implementation of Value Chain Management as a set of Services for your enterprise usually implies that a number of key components have been established to support it. These components are:

  1. A clearly documented and socialized Value Chain Management Service Owner that is held accountable for Service performance, quality, and cost.
  2. A clearly documented and socialized Value Chain Management Service Provider, Organization or Group who is performing the Service or work.
  3. A clearly documented and socialized inventory of all Value Chain Management Service Inputs, including Value Chain Management Service Requests and any artifacts necessary to support such Requests so that consumers of the Service know how to engage and request or take advantage of them.
  4. For every Value Chain Management Service Input, a clearly documented and socialized inventory of Value Chain Management Service Outputs, making it clear to consumers what they can expect to receive as a result of a successful Service Request.
  5. For every Value Chain Management Service Input, a clearly documented and socialized inventory of the work being performed by the Service Provider to achieve such Outputs or Deliverables.
  6. For every Value Chain Management Service Input, a clearly documented and socialized inventory Service Level Agreements (e.g. Service Availability, Service Duration, Service Guarantees, etc.) that can be used to set expectations and measure actuals against for said Service Outputs.
  7. Clearly specified Value Chain Management Service Costs that help set expectations for Service Requesters (i.e. the cost of a request) and that provide clear transparency to the organizations that fund and sponsor such Services (i.e. the Total Cost of Ownership (TCO) your Service(s).
  8. Value Chain Management Service Request Patterns (Estimation Creation, Modification, Decommission, Support/Incidents, Complaints, etc.) in order to create intuitive and repeatable user experiences across different Service Types.
  9. Clearly understand what Value Chain Management Service Resources are required, human or otherwise, to create and deliver your Value Chain Management Service Deliverables, in a repeatable, cost-efficient, timely, and high quality manner.
  10. For every Value Chain Management Service Request, understand the chargeback mechanism, in order to recoup your Service Costs.
  11. For every Value Chain Management Service, it's important to understand the skills that are required, will need to be developed, and will need to be maintained by Service Resources, in order to deliver each Service Deliverable.
  12. It's important to understand who your Value Chain Management Service Stakeholders are, this includes but is not limited to your Customers, Consumers, Clients, Sponsers, etc. are, as well as the types of problems it is that they're trying to solve or interests that they will have in your Services.

Value Chain Management Ownership: The most important thing to understand about a Value Chain Management Service is that, in order for such a Service to be successful, there must be a clear and accountable Owner for it. That is, there needs to be a very clear and accountable named person or organization that owns and is fully responsible for the Service, all of its sub-Services and, most importantly, all of the Service's "Outcomes." Without clear ownership, Services are almost never successful. And, for those few occasions where Services are successful without clear ownership, you can assume that they're successful because the people working in those Service areas are acting as heroes, or... the those Services are just plain lucky (that kind of luck doesn't last for long).

Value Chain Management Service Inputs: There are typically two types of inputs to any Value Chain Management Service. The first is what is known as a "Value Chain Management Service Request" and the second really represents any and all supporting artifacts that are necessary to support such requests, including but not limited to Data and Information in the form of Documents, either electronic or paper in form. Many would argue that the "money" to pay for the Service execution of the Request would be the third but, for now, we will assume that payment is controlled through the Data and Information provided to the Service Operators, in support of the Request.

Value Chain Management Service Outputs: The outputs of any Service are often referred to as the Service's Deliverables. Therefore, the readers should be aware that the terms "Value Chain Management Outputs" and "Value Chain Management Deliverables" are synonymous and interchangeable. All work performed in any enterprise is, by default, a Service that is being performed for someone else and, therefore, all work or Services yield results. These results are the Service's Outputs or Deliverables and a good Service ensures that such Outputs are appropriately documented to the consumers of said Service. This means that for any given Value Chain Management Service Request Type or Category there will be one or more clearly defined and documented Outputs or Deliverables, making it clear to the consumer what he, she, or they will get in response to their Request. This can be as simple as an answer to a question or as complex as the Merger of two enterprises.

Value Chain Management Service Levels: Service Levels represent "performance agreements," contractual or otherwise, that dictate how well a Value Chain Management Service should perform, most often keeping the Customers, Consumers, Clients or End Users of the Service in mind. Value Chain Management Service Levels can come in many forms and are often worked out by the Customers paying for the Services and the Service Providers who sell or provide the Services. In many cases, Service Levels are also self-imposed by the Service Providers performing the Services as a means to set expectations for Service Customers. In short, Value Chain Management Service Levels are constraints, limitations, and/or expectations that are tied directly to Value Chain Management Service Deliverables. They represent measures for things like quality, efficiency, and cost against said Deliverables or Outputs that allow the consumer of such Services to measure what they actually get against what they expected to get.


Service Paradigms: Centralized Value Chain Management vs. Federated Value Chain Management

Assuming an enterprise pursues the establishment of Value Chain Management as a set of controlled Services, there are three common paradigms for doing so. These include:

  1. A "Centralized Value Chain Management" implementation paradigm
  2. A "Federated Value Chain Management" implementation paradigm
  3. A "Hybrid Value Chain Management" implementation paradigm

Centralized Value Chain Management is defined as:

"1. The term or phrase that implies establishing and/or practicing the Discipline known as Value Chain Management as a concentric and singular set of organizations and services, usually in order to serve an entire enterprise, regardless of geographic location, further implying full centralization and no federation of any and all Value Chain Management associated Work, Activities, Actions, Tasks, Capabilities and/or Services."

Federated Value Chain Management, which is also referred to as Decentralized Value Chain Management, is defined as:

"1. The term or phrase that implies establishing and/or practicing the Discipline known as Value Chain Management in multiple pockets, communities, or organizations, further implying no centralization in the implementation and execution of Value Chain Management associated Work, Activities, Actions, Tasks, Capabilities and/or Services."

There are clear tradeoffs to each of the two models. For example, in a Centralized paradigm, it's normally easier to coordinate work and provide broad coverage, across many areas of the enterprise and relevant stakeholders. However, it becomes far more difficult for a centralized organization to properly fund and staff resources and services in order to perform all required work across all stakeholders, in a much larger enterprise.

It's also important to note that a third paradigm also exists as an option. This is known as a Hybrid Value Chain Management paradigm or model. In this case, there is a centralized Value Chain Management organization that is often responsible for things like centralized governance, command, control, and communications, while federated staff and services deal with localized forms of Value Chain Management. In this type of paradigm, federated staff and services usually report direclty into their local management but may have matrix reporting or responsibilities into the Centralized Value Chain Management organization.


Principles & Best Practices: Common Principles and Best Practices for Value Chain Management

A "Principle" is defined as being: "A professed assumption, basis, tenet, doctrine, plan of action or code of conduct for activities, work or behavior." Therefore, we can deduce the definition of "a Value Chain Management Principle" to be:

Value Chain Management Principle: "1. A professed assumption, basis, tenet, doctrine, plan of action or code of conduct for any activities, work or behavior associated with the Discipline known as Value Chain Management."

A "Best Practice" is defined as being: "One or more Activities, Actions, Tasks or Functions that often do not conform with strict Standards and that have evolved, over time, to be considered as conventional wisdom for consistently and repeated achieving Outcomes or Results that can be measured as being equal to or above acceptable norms." Therefore, we can deduce the definition of "a Value Chain Management Best Practice" to be:

Value Chain Management Best Practice: "1. One or more Value Chain Management related Activities, Actions, Tasks or Functions that often do not conform with strict standards and that have evolved, over time, to be considered as conventional wisdom for consistently and repeatedly achieving Outcomes or Results that can be measured as being equal to or above acceptable norms."

The plural form of this term would be "Value Chain Management Best Practices."

Common Value Chain Management related principles and best practices exist to help achieve higher than average expectations of quality and to ease in the implementation, support, operations, and future change associated with the solutions industry professionals put in place to address the needs of this Discipline and all its related stakeholders.

While this entire document is meant to represent and serve as a set of common principles and best practices for Value Chain Management, the following list represents a summary of some very basic examples of what implementers, supporters, and operators of Value Chain Management should constantly be working toward:

Principle or Best Practice Description
Establish and always have very clear Ownership for Value Chain Management. Establishing, publishing and socializing clear Ownership for Value Chain Management allows an enterprise and all its Resources, regardless of their geographic location, to assign accountability for all aspects of the Discipline. It also ensures that there's always at least one person that everyone can go to for transparency into the Discipline as well as for handling work that is associated with the Discipline.
Define, Collect, and Manage Relevant Value Chain Management Inventories. As an IT professional, there are probably few things that are as important as knowing what is or is not in your portfolio, as well as understanding key traits about your portfolio. You cannot achieve this without the transparency provided by your inventories. Therefore, it is critical that you clearly define, collect, manage, and govern any and all relevant Value Chain Management inventories. Lack of Value Chain Management Inventories means no transparency, a chaotic and immature environment, and (even worse) the implication that you don't know how to do your job.
Always use standard terminology for Value Chain Management, in order to standardize communications between stakeholders. It is often argued that the biggest mistake you can make is to create your own words and/or your own definitions, when communicating with others. There is no place where this is more accurate than in the field of Information Technology. IT Stakeholders make up their own words and definitions far too often, or let their business constituents do so. When you make up words or definitions, or you let others do so, you're creating a grave injustice for your organization. Self invented terminology and grammar often leads to poor communications, which in turn leads to redundancy of solutions, higher complexity of environments, slower delivery times, and much higher costs. Therefore, the IF4IT always recommends that you leverage standard terminology for Value Chain Management, whenever possible.
Centralization of Value Chain related data. While often impossible to centralize and collocate all Value Chain related data and information, especially in a geographically dispersed environment, Value Chain Management related stakeholders should always strive to centralize all data and information. The goals are to eliminate data fragmentation, improve source of truth for data, reduce the number of systems needed to support stakeholders, reduce the complexity of solutions, improve usability, and to ultimately reduce the costs associated with Value Chain Management.
Clearly define, implement, track, and analyze Value Chain Management Metrics. In order to successfully set up the discipline of Value Chain Management and its related Services, it is critical to clearly define, track, and constantly analyze Value Chain Management metrics. Such metrics include but are not limited to Supply and Demand Metrics (i.e. Operational Metrics), Performance Metrics, Quality Metrics, and Financial Metrics.
Transparency of Value Chain related data. Stakeholders should always strive to make any and all Value Chain Management data transparent to all other appropriate stakeholders, at a minimum, and often to the entire enterprises. The exception when private user data must be protected. Many stakeholders often make the mistake of treating internal operational data as private or protected. This often creates a data silo and will often lead to internally silo-ed organizations that revolve around such data silos.
Do not let "perfection" of Value Chain Management solutions stand in the way of "good enough solutions". Often, Value Chain Management stakeholders "overthink" solutions, leading to the impression that best-of-breed or perfect solutions are more effective than "good enough" solutions. Experience tells us that "good enough" is, almost always, the better path to follow. We live in an age where technologies grow old in the blink of an eye. Even the implementation of something that looks perfect, today, will look antiquated, tomorrow. This is especially true if your enterprise doesn't have a long term funding plan and commitment to improvements and upgrades of the solution(s) put in place.
Follow industry Standards, Best Practices, and Guiding Principles for Value Chain Management, whenever possible". One of the most common errors many enterprises make is to create solutions from scratch or without the guidance, assistance and/or experience of others who have created such solutions, before them. Whenever possible, the IF4IT recommends that you research existing Standards, Best Practices, and Guiding Principles to avoid the mistakes of others, while also gaining from their successes. Remember, we live in a vast world. Chances are very high that someone else has already experienced the pain you're about to create for yourself. Wise people will always look to learn from such people's experiences before they go down the road of implementing their own solutions.
Work toward and maintain a Single Source of Truth (SSoT), whenever possible. While it may be impossible to truly maintain a Single Source of Truth (SSoT) for all data items at all times, especially in the case where the same data entity or instance enters an enterprise through unique data channels, it is an accepted, industry-wide best practice to always work toward such a goal.

Further Reading and Reference Material for Value Chain Management

The Information Technology (IT) Learning Framework. A tutorial that helps understand Information Technology and how disciplines, such as this one, fits into the bigger picture of IT Operations.

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