The Value Chain as an Operations Reference Model

The concept of the Value Chain was made popular by Harvard University’s Professor Michael Porter. The Porter Value Chain has been widely adopted by the business community as a mechanism to understand and comprehend complexity in business environments, with the ultimate goal of structuring the business to maximize its competitive advantage. Implementing the Value Chain is not easy: a number of organizations can testify to their failure to derive any benefits at all from this concept. Contributing to this is the fact that the Value Chain requires certain real-world abstractions that do not come logically to the organization in its definition of a Value Chain. This is made worse when the organization tries to implement these concepts in real-world situations without “decoding” abstractions back to reality. To overcome this problem, an approach is presented to assist the organization in creating a Value Chain reference model within the broader context of the organization’s enterprise architecture.