Internal Audit Business Model Canvas
The Idea: My first GSD blog post introduced the Business Model Canvas as a way to understand strategy. Back then I said, “To be relevant to strategic conversations, you need to have a point of view on what’s strategic. A business model describes the rationale of how an organization creates, delivers, and captures value … The Business Model Canvas is a cool tool for capturing a business model on one page.”
The Execution: As part of my 2014 audit plan presentation, I wanted to articulate internal audit’s unique value proposition to my company’s executive committee. A key message was the criticality of executive sponsorship to delivering the full value of internal auditing. To ensure they recognize what that unique value proposition is and how we address our “customers’” needs, I walked them through our Internal Audit Business Model Canvas (see illustration).
Every business exists to fill customer needs. Internal auditing is no different. Everything starts with the customer and knowing who they are. Internal audit has many stakeholders, and our exercise to identify our customer segments clearly showed us that! We put ourselves in their shoes and asked, what do they each need from internal audit? The Customer Relationships box reflects the four things the chief financial officer, a key customer, envisions for our function:
- Be an assurance provider on systemic risks.
- Be an internal consultant with an enterprise point of view.
- Export talent to finance and the business.
- Provide advice on strategy execution.
You’ll note we color-coded the canvas to differentiate between the two types of services we can deliver. Items in burgundy relate to assurance activities; items in blue relate to consulting activities; items in black are relevant to both. Our Value Proposition clearly expresses why internal audit is uniquely positioned to deliver these services. It’s our “killer app.”
It’s a challenging document to walk executives through, but if you provide a read-ahead and focus on the key points (notice the larger font in Key Resources used to amplify the importance of sponsorship) you can have a meaningful conversation about internal audit’s role in the organization. Even if you keep the business model canvas behind the scenes, it remains a powerful tool for ensuring you understand your customers, know what they need, focus on the right activities, and have the resources and distribution channels to deliver them. It’s a template for designing an internal audit function that meets your organization’s needs.
If you adopt this approach for your function, I’d love to hear the results and feedback from your customers!
Posted on Mar 12, 2014 by Carolyn Saint
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