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Business Architecture provides the linkage between defining the business strategy and implementing the business strategy.
Transcript of Business architecture breakfast briefing uk v1 1 0
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 1
The design of business using
business architecture
UNDERSTANDING
BUSINESS ARCHITECTURE
PRESENTED BY:
David O’Hara
Principal Consultant, EMEA
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 2
About
Enterprise
Architects
› Enterprise Architects (EA) is an
international professional
services firm providing strategy
& architecture services.
› Our vision is to be the most
respected specialist architecture
organisation globally, setting new
standards for effectiveness in
strategy execution.
› Our core value proposition is to
help clients unlock the value of
their investments using the
principles of architecture.
› We believe that architecture is
important and, when done well,
will profoundly improve
corporate performance.
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 3
EA is a leading international provider of strategy
and architecture services and capabilities
Championing Practice Awareness in
the Community
• Chief Architect / CTO Round Tables
• Virtual Teaming & Practitioner
Collaboration
• Open Group Participation
• Industry Engagement
Lifetime Relationship with Practising
Architects
• Practitioner career lifecycle
management
• Architecture training and certification
• Professional development
• Community involvement
• PAYG payroll services
• Learning forums
Skills Uplift for Organisations &
Individuals
• TOGAF® 9.1 Certification
• ArchiMate® 2.0
• Advanced / Applied EA
• Business Architecture
• Information Governance
• Solution Architecture
• BPMN
Strategic Relationship With
Corporate Clients
• Strategy & Architecture Capability
Improvement
• The delivery of strategic architecture
outcomes
• Architecture delivery Accelerator
Frameworks
• Resourcing & Talent
• Managed Services
Learning
Services
Architect
Services
Thought
Leadership
Enterprise
Services
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 5
What is Business Architecture?
› We like to refer to it as “the Design of Business”
› It is about giving strategic business objectives greater clarity and structure by
describing how they translate into operations.
› The goal of Business Architecture is to operationalise business strategy,
thereby helping business leaders avoid a risky leap directly from strategy to
specific project investments.
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 6
En
terp
rise
Arc
hit
ect
ure
Outcomes
Business
Architecture
is an integral
part of the
Enterprise
Architecture
Business
Information
Applications
Technology
SER
VIC
ES
› Business Architecture provides the crucial business context for the ‘technical’ layers, aligning architecture ‘services’ to provide coherent business outcomes
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 7
Implementation
Strategy
Positioning Business Architecture
Business Architecture must connect strategy to business and IT change
Business Architecture
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 8
DIS
TION
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 9
What have these brands got to do with disruption?
What is disruption?
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 10
‘Enterprise Lifecycle's
2014 © Enterprise Architects PTY LTD
PER
OR
MA
NC
E
TIME
ENTERPRISE
BRAND PLATFORM
BUSINESS MODEL
BUSINESS COMPETENCIES
PRODUCT
Change is moving faster…and the Business
Model shelf-life is shrinking
Who is best placed to respond to this challenge? …so Business Models become ‘stale’
and must be renewed
As what was once innovative
becomes commoditised, value
discipline orientation changes…
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 11
Enterprises must learn how to design and
execute Business Models
› Architects deeply understand both Business Capability AND Technology…
› ….and how they can be remodelled around changes in business strategy
Enterprise Architecture
Who is best placed to understand and respond to this
challenge?
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 12
ANALYTICAL
THINKING
INTUITIVE
THINKING
* From Roger Martin (2009) The Design of Business
GOAL: Reliably produce
consistent, predictable
outcomes
GOAL: Produce outcomes
that meet desired
objectives
Architecture requires a balance of thinking styles
The challenge is identifying the right skills in the organisation that are able to traverse
the domains of innovative, intuitive thinking and reliable, analytical thinking.
NPV
EVA
Operation
Management
Quality
Management
Corporate
Governance
Enterprise
Patterns
Portfolio
Analysis
IT Governance
Value
Engineering
PRINCE2
Six Sigma
& Lean
Business
Intelligence
Strategic
Traceability
Financial
Modelling
Innovation
Management Business
Analysis
Data
visualisation
Talent
Management
System
Thinking
Mission
Business
Model Design
Stakeholder
Value
TOGAF
Cost
Engineering
Solution
Architecture
Knowledge
Ecosystem
Six
Thinking
Hats
Collective
Intelligence
Gamification
Crowdsourcing
Change
Management
Perception
Management Wicked
Problems
Environmental
Scanning
Brand
Management
Integrative
Thinking
Goals
Capability
Five Forces
Root Cause
Analysis
Product
Management
Search for
“The EA Headspace”
Business
Architecture
Our Focus Areas
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 13
Vision
&
Mission
Design
Thinking
Business
Outcomes
Value
Systems
Innovation
Systems
Thinking
Coherence
Business
Model
Prototyping
Capabilities
Visualisation
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 14
What is a Business Model?
Some Definitions
› “A Business Model is a set of activities which a company performs, how it performs them, and when it performs them, so as to offer its customers value whilst making a profit”
› Business Models – A Strategic Management Approach
› “A Business Model describes the rationale of how an organization creates, delivers, and captures value”
› Alex Osterwalder – Business Model Generation
› “A Business Model is a framework for creating value in a coherent manner” Craig Martin, Chief Architect @ EA
Valu
e
The Environment
The Business Model
Market
Model
Products and
Service
Model
Operating
Model
Markets
Industries
Customers
Market Segment
Channels
Customer
Relationships
Value Proposition
Offering: Products /
Services
Capabilities
Processes / Value
Chains
Business Services
Functions
Data
Applications
Technology
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 15
The goal of a good
Business Model is to
create coherence Building coherence requires an understanding of
the components of a Business Model, and how to
assemble them in a manner that is innovative
and differentiating whilst maintaining stability.
› A Coherent Business Model is one that is
synchronised around:
» its market position,
» its product and service portfolio; and
» its most distinctive strategic capabilities
› All of the above working together as a system
The Environment
The Business Model
Market Model
Products and
Service Model
Operating
Model
Markets
Industries
Customers
Market Segment
Channels
Customer Relationships
Value Proposition
Offering: Products /
Services
Capabilities
Processes / Value Chains
Business Services
Functions
Data
Applications
Technology
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 16
Capability Driven
› Capability driven architectures are designed to support the strategic objectives of an organisation
› Capabilities consist of people, process and technology
› To fully understand a capability all these components must exist regardless of their maturity level
One of the ways we create coherence is through capability based planning
Capability based
planning is one of
the tools that looks
at the best “mix” of
resources required
to develop this
coherence
Mission
Strategies
Tactics
Vision
Goals
Objectives
Outcome
CAPABILITY
People
Process
Technology
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 17
What do Stakeholders talk to you about?
Are we investing in the right areas
across the enterprise?
Is my investment portfolio balanced across
my strategic and tactical issues
Are the strategic programs aligned,
or for that matter, are they the right
strategic programs?
There is a lot of activity going on out
there, how do I know we are doing
the right things?
Where can we take advantage of
synergies across the major strategic
programs?
“Workflow is inadequate for Product Development,
Underwriting and Legal & Compliance”
“First contact resolution is an important goal for
Enquiries and Complaints”
“Rolling out new products to customers is
expensive and takes a long time,. Product
Releases should be a BAU activity ”
“No correlation between product
development and service delivery
systems”
“Management Reporting is complex and
uses a lot of disparate systems and
spreadsheets to produce”
“We have key person dependencies in
a number of teams”
“Errors are only picked up at when the
customer complains”
“Knowledge, Document and Content
Management is inadequate”
“50% of errors are associated with either missing a
process step or sending paperwork to the wrong
place”
Concerns, Pain, Issues, Problems, Constraints
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 18
Finding the Right Business Mixes This entails having a clear understanding of the activities required to move from the mystery
space to the algorithm space
Unresolved
Business
Challenges
Rules of thumb
Robust,
repeatable and
replicable
formulas &
processes
Ultimately all innovative
algorithms will become utility.
* From Roger Martin (2009) The Design of Business
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 19
How do we Communicate Strategy?
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 20
The minefield between strategy and projects In navigating the minefield between strategy and execution there are multiple possible failure points
STRATEGY PROJECTS
Strategy not sufficiently
tied to operations
Needed capabilities not
properly understood or
measured
Planners not accountable
for delivery
Benefits aren’t
quantified or traced
back to original goals
The drivers of strategy
are often misaligned
This often leads to some typical
stakeholder issues regarding
transformation exercises
Are we investing in the right areas
across the enterprise?
Is my investment portfolio
balanced across all of the
economic value add dimensions?
Are the strategic programs aligned,
or for that matter, are they the right
strategic programs?
There is a lot of activity going on
out there, how do I know we are
doing the right things?
Where can we take advantage of
synergies across the major
strategic programs?
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 21
What needs to be done?
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 22
STRATEGY PROGRAMMES
Strategy not sufficiently
tied to operations
Needed capabilities not
properly understood or
measured
Planners not
accountable for delivery
Benefits aren’t
quantified or traced
back to original goals
The drivers of strategy
are often misaligned
Addressing the failure points between strategy
and implementation
› To address these failure points we should focus on the following three areas:
1. Creating a clear view of the goals, value drivers and corresponding levers that drive the strategy
2. Clearly linking the strategy to operations through capabilities
3. Establishing the resources that are needed by the capabilities and ensuring business architects provide oversight at portfolio level
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 23
Developing the Capability Driven Roadmap
The Challenge: creating traceability from strategy to implementation
Transitioning
Capability uplift delivered in
increments through business &
technology change
Technology decisions must be
traced back to a business
objective via the capabilities
they enable
Motivations Business
Model
Capability
Model
Maturity &
Gaps
Target
Architecture
Current
State Arch.
Work
Packages
‘Anchor Models’
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 24
What are you doing now?
EA = IT Architecture
Improve project
performance
EA = Enterprise-Wide
IT Architecture (EWITA)
Improve IT performance
EA = Business Architecture (BA) +
EWITA
Improve Business Performance
EA = Strategic Enabler + BA +
EWITA
Improve Market Performance
(Shareholder
Value)
A
B
Value
Mandate
C
E
EA = Product Architecture + Business
Architecture (BA) + EWITA
Improve Product/Service Performance D
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 25
Valu
e
Mandate
E
A B
C
D
Are we doing Business Architecture? Value increases when mandate increases.
Business Architecture is seen
as a positive progression
away from IT
*Adapted from Ruth Malan, Dana Bredemeyer
• Maximise Product Profitability
• Maximise Market Share
• Maximise Customer Lifetime Value
Improve project
performance
Improve enterprise wide
program and portfolio
performance
Improve Business Performance
Improve Market
Performance
(Shareholder Value)
Improve Product/Service
Performance
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 26
Top Management Challenges
37%
34%
29%
22%
Customer
Loyalty
Increasing
flexibility & speed
Reducing
Costs
Increasing
Innovation
PERCENTAGE OF CEOS REPORTING
COMMON DRIVERS FOR INCREASING BUSINESS FLEXIBILITY
1. Customer demand for quick turnaround and increased
need for customisation
2. Shorter decision cycles
3. Increased need for product innovation
4. Globalisation of corporate footprint
Current Business
Architecture Pressures
Aspirational Business
Architecture Pressures
*Executive Council Survey
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 27
“Architecture Thinking”
MACRO
ENVIRONMENT INDUSTRY SCAN
INFLUENCERS
ASSESSMENT
MEANS ENDS
SWOT PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-
term)
MOTIVATION MODEL BUSINESS MODEL
SERVICE MODEL
CAPABILITY MODEL
People
ROADMAP
GOVERNANCE
* Closed feedback
loop to Motivation
Model
Vision
Strategy
Blueprinting
Roadmapping
Governance
Information
Technology
Process
Design Thinking: Empathise, Define, Ideate, Prototype, Test
MARKET MODEL
MEANS ASSESSMENT
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 28
IDENTIFY GOALS
& OBJECTIVES
UNDERSTAND
BUSINESS
MOTIVATION
PROTOTYPE
BUSINESS MODEL
STRATEGIES
DEFINE
CAPABILITIES
ASSESS
CAPABILITIES
MATURITY
DEFINE FUTURE
STATE CAPABILITIES
MATURITY
ASSESS CURRENT
PROJECT ACTIVITY PLAN TRANSITION
DEFINE
VALUE CHAIN
COMPONENTS
1 2 3 4 5 6 7 8 9
Identify value chain
segments, channels,
offerings, clients
Assign KPIs to value
chain components
Rank importance of
models to achievement
of objectives
Use strategy ranking to
identify required
changes in values of
KPIs to achieve target
values
Identify capabilities to
enable achievement of
objectives
Group capabilities into
value chain segments
Decompose high level
KPIs to match the
capabilities
Assign KPIs to
capabilities
Define capabilities
components
Research best practices
and competitors for
each capability
Assess current maturity
of organization
capabilities
Obtain current values
for KPIs
Set target values for
KPIs
Identify target maturity
level for capabilities to
achieve target KPIs
Identify dependencies
between capabilities
based on their
components
Identify changes in the
capabilities
components to achieve
the target maturity
level
Define future state
capabilities maturity
levels
Catalogue required
changes to the
capability components
Catalogue required
changes in the value
chain structure & value
chain components
Catalogue in-
flight/planned
transformation
initiatives
Map in-flight/planned
initiatives to required
transformations
List transformations
required to address the
remaining gaps
Prioritize the full list of
transformation
initiatives
Analysis of business
dependencies
Sequence
transformation
initiatives
Alignment of
transformational plan
with other organization
programs
Assess future values of
high level KPIs
Identify strategic
themes
Identify drivers and
environmental factors
Decompose existing
strategies and refine if
required
Document SMART
Objectives
Map KPIs to strategies
Obtain current values
for decomposed KPIs
Obtain info on goals &
objectives (derive if
required)
Rank relative
importance of
objectives
Assign high level KPIs
to objectives
Gather current values
for the high level KPIs
Obtain target values for
the high level KPIs
WO
RK
STR
EA
MS
AC
TIV
ITIE
S
Develop prototype
strategic business
models
HOW: Executing Business Architecture A Business Architecture Method – Applied Business Architecture – Four Days
PROBLEM DEFINITION
BUSINESS SCENARIOS
UTIL
ITY
OU
TP
UTS MEANS TO END
BUSINESS
MOTIVATION MODEL
BUSINESS MODEL
CANVAS
A VALUE SYSTEM
MODEL
A VALUE CHAIN
CAPABILITY ANCHOR
MODEL
STRATEGIC OVERLAY
CAPABILITY ANCHOR
MODEL WITH CURRENT
MATURITY OVERLAY
CAPABILITY ANCHOR
MODEL WITH TARGET
MATURITY OVERLAY
CAPABILITY ANCHOR
MODEL WITH PROJECT
OVERLAY
MATURITY, IMPACT
AND IN-FLIGHT
MATRIX AND DEVELOP
THE QUADRANT
GRAPHS
CAPABILITY ANCHOR
MODEL WITH HOTSPOT
OVERLAY
SEQUENCING MATRIX
TRANSITION PLAN
SUMMARISED
ROADMAP VIEW
Discovering Business Architecture Course Outputs
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 29
How is a business represented? A business model is expressed in a variety of views depending upon level of abstraction
The Business model is described in terms of business motivation
and outcomes and is often represented in the form of a business
motivation model
Various business models produce different outcomes for
different scenarios. Developing scenarios for business models
is done using the business model canvas
At the conceptual level you will develop the detail of the
various strategic business models using the EA Business
Reference Model with corresponding value chain
models
The capability layer expands the conceptual
business model into detailed business capabilities
and describes their inter-relationships and target
maturity levels. It is often represented in the
business anchor or capability model
The resources layer addresses all the
resources that are within the capabilities
and is found in the more traditional process
and functional decomposition models
THE BUSINESS
MOTIVATION MODEL
THE BUSINESS
MODEL CANVAS
THE VALUE SYSTEM
MODEL
THE BUSINESS
CAPABILITY ANCHOR
MODEL
RESOURCE
MODEL Resources
CAPABILITY
BUSINESS
STRATEGY
MOTIVATION
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 30
Our Courses
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 31
› To unlock the full potential of Architecture, the
mandate needs to increase away from the
Operating Model level
Responding to Disruption means changing the mandate for Architecture
Summary
› The Business model lifecycle is shrinking!
› Enterprise Architecture must equip the CIO to
engage other ‘C’ level stakeholders around the
concept of Business Design (i.e. not
architecture)
BUSINESS ARCHITECTURE BREAKFAST BR IEF ING 32
Questions?
