The Architecture of Change

TheArchitectureofChangeBusinessArchitectureandthemeaningofDigitalTransformation

Thispaperdescribesdigitaltransformationanditsilluminationusingadisciplineknownasbusiness

architecture.InPart1,weexplorethetermandpointtoaneedforagenerativeabstractioninorderto

understandtheitsmeaning.Part2,weexplorethepowerofabstractiontorenderinsightandmobilize

thought.Part3laysoutthebasicprinciplesofbusinessarchitectureandappliesthemtoabusiness

planningitsowndigitaltransformation.Finally,wearguethat,insofarasdigitaltransformationhasa

meaning,itisarchitecturalinnature.

Thematixconsultstocompaniesseekingtodigitallytransformthemselves.OurapproachusesBusinessArchitecturewithacustomer-firstfocus.Our team is highly skilled with a deep understanding of customer experience,marketing, and product development with a heavy emphasis on IT and dataarchitecture. Our maturity and our Certified Business Architect credentials help tocreatestrongbridgestocorporatestrategy,marketing,operations,HR,ITandtheCEO.Visit:thematix.comEmail:[email protected]:917-275-7343

©CopyrightThematixLLC [email protected]

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Part1:WhatisDigitalTransformation?

Figure1:FishtoFowl,'Class'Transformation

“DigitalTransformation”hasemergedasacatchphraseusedtodescribefundamentalchangesto

organizationsandinstitutionscausedandenabledbymoderndigitalinformationtechnology.Various

consultanciesandscholarshavesurveyedandcatalogedthesechanges,butthereisnomodelofhow

transformationoccursor,indeed,whatisbeingtransformed.IfUberisataxicompany,andifalltaxi

companiesshareasimilarstructureinordertobeataxicompany,whatmakesUbersodifferent?

Beforeweproposeananswertothisquestion,itisworthinvestigatinghowthephrase“digital

transformation”isbeingusedandwhatisintendedbyit.Evenifthemeaningremainsvagueand

ambiguous(anditwill),itisworthunderstandinghowtheconversationhasgonesofar.Ifnothingelse,

wecantherebyavoidmerelyaddingyetanotheropiniontotheheap.Ifwearesuccessful,wecango

beyondmeredescriptionandoffersomeverypracticaladviceconcerninghowdigitaltransformation


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canbeactivelyandintentionallyeffected.Butlet’sstartwiththedata–thedigitaltransformation

discourseasithasemergedthusfar.

Figure2:acollageofDigitalTransformationDiscourse

Yousayyouwantatransformation?

Considerthephrase“digitaltransformation”inisolation.Inordinaryspeech,itisanattributive

adjective–“digital”specifiesthekindoftransformation.Butinrecentyearsithasbecomeaproper

noun,istandingforphenomenaoccurringincommerce,scienceandculturerelatedtothechangesthat

digitaltechnologymakeseitherpossibleornecessary.

Forthewebasawhole,Googleshowstheincidenceof“digitaltransformation”asasearchterm

increasing10-foldinjust2years.Amazonlists333booktitlesforthestring“digitaltransformation.”Of,

theseabout2/3havebeenpublishedinthelast5years.Forbes.comreturns632resultsandHarvard

BusinessReview(HBR.ORG)125.Ithasbecome,asissaidinthevernacular,“athing”–amemeinits

ownright.


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Figure3GoogleTrends"DigitalTransformation"

Butdoesthisphrase“digitaltransformation”meananythingdefinite?Doesithaveadefinition?We

havetolooktothesalientliterature(includingonlinevideosandpresentations)asastartingplace,since

thatiswherethetermisbeingdefined.

Wikipediadefinesdigitaltransformationas“thechangesassociatedwiththeapplicationofdigital

technologyinallaspectsofhumansociety.”iiTheWorldEconomicForumalsotakesasimilarlybroad

viewofthephenomenon,definingitas“[r]apidadvancesindigitaltechnology[that]areredefining

society.”iiiMITSloanManagementReview,incollaborationwithCapGeminiconsulting,focuseson

businessanddefinesdigitaltransformationas“theuseoftechnologytoradicallyimproveperformance

orreachofenterprises”.ivIBMstatessuccinctlythatitinvolves“[c]reatingnewbusinessmodelswhere

digitalmeetsphysical”.v

Butthesedefinitionsareunsurprisingandcoincidewithwhatwesurmisedigitaltransformationtobein

thefirstplace;digitaltransformationissurelybusinesstransformation,causedorenabledbydigital

technology.Giventhis,andthefactthatdigitaltransformationhasbeenongoingforatleast40or50

yearsnow,onewonders:whythesuddenattentiontothephenomenonand,moreover,whynow?

Afterall,theimpactofinformationtechnologyonhumanityhasbeenthesubjectofwritingssinceat

leastthe1940sand50s.vi


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Contemporarydigitaltransformation,accordingtoIBM,isrootedintechnology’spervasivenessin

everydaylifeandinconsumerempowerment:

Ascustomersbecameincreasinglyempoweredbasedonpervasiveaccesstoonline

information,alongwithamultiplicityofchoicesandchannels,theirexpectationsratcheted

skyward.Asaresult,customershavenowbecometheprimaryforcebehinddigital

transformationinallindustries.vii

Figure4IBMevolutionofdigitaltransformation

InIBM’sanalysis,digitaltransformationisaculminationofinfrastructureandwebstrategy,resultingin

thetransformationofbusinessmodelsthemselves.Thetoolhas,inthisview,turnedbackonthetool-

userandtransformedit(thebusiness,theindustry,theeconomy,thesociety…).

TheWorldEconomicForumhasadifferentpointofview.Thetransformativepowerofinformation

technologiesliesintheircombinatorialeffects,whichaccelerateprogressexponentially,andwhichare

todayarereaching‘criticalmass’worthyoftryingtodescribeandsystematize.


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Figure5:WorldEconomicForum2016

Inthisview,technologyishavingrecursive,self-reinforcingeffects,whicharereachinga‘criticalmass’in

thebusinessesandbusinessenvironmenttheyaffect.Digitaltransformationischange-inducing-change

inwhichtechnologyitselfhasturnedbackonthebusinessmodelthatusesit.

Finally(inthisincompletesurveyviii),CapGemini/MITSloandefinesdigitaltransformationas“theuseof

technologytoradicallyimproveperformanceorreachofenterprises.”Whatisnewandtransformative,

accordingtoCapGemini,isthefactthattheimpactofdigitaltechnologyisbeingfeltinlarge,traditional

companieswhosebusinessismanifestlynotdigital.Thesomewhatvaguedefinition(doesn’teverybody

haveawebsite?)ismademoredefinitebydescribingitasthree‘pillars’ofnineelements;digital

transformationistheimpactofdigitaltechnologyonthebusiness’scustomerrelationships,itsinternal


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processesoritsbusinessmodel.ix

Figure6:AfamouschartbyCapGemini

What’ssotransformationalaboutallthis?

Pervasiveness,rapidity,empowerment,combinatoryeffects…whateachcharacterizationofdigital

transformationispointingtoisthesecondaryandtertiaryeffectsthatdigitaltechnologyishavingonthe

environmentsinwhichitoperates.Itisnot,forexample,merelythefactthatanyoneanywhereonthe

planetcannowviewarealtimevideoofaneventoccurringinMinneapolis;itisthatthisfactof

planetarysimultaneityhaspassedontotacitassumptionsthatwemakeconcerningawareness,action,

choiceandevenjudgment.Onesometimesthinksthisiswhyweseetimeassomehow“speedingup”.

Theassumptionsaffectedbytechnologypermeateour“averageeverydayness.”Itisoftenthose

productsorinventionsthat“disappear”orbecomeinconspicuous–thetelephone,thepapercliporthe

electricscrewdriver–thathavethegreatesteffectoursharedfabricofmeaning.Itisbecause


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technologyhassuchfundamentaleffectsthatdigitaltransformation–asathematicfieldofstudy–isa

credibleandappropriateconcept.

Inthecontextofbusiness,digitaltransformationmeansthattheverysuppositionsonwhichbusiness

modelsarefoundedarechanging.Thatthelargesttaxicompanyneednotowntaxies;thatthelargest

moviehouseshouldownnotheaters;thattheworld’slargesttelecomproviderownsnoswitches,

repeatersortransmissionlines–theseareprofoundchangestotaken-for-grantedbusinessstructures

thathavebeeninexistenceforhundredsofyears.

Figure7:SourceIBM

Yet,evenaftertransformation,wedorecognizethesealteredentitiesasentitiesofaparticularsort–a

taxicompany,atelephonyprovider,amoviepurveyor.Theiressentialnatureremainsthesame.What

isthereforetransformedandwhatpersiststhroughtransformation?

Toanswerquestionslikethese,whatisneededisagenerativeabstraction–amodelusinggeneral

conceptswhichcanbeusedtodescribeanybusinessofagivenkind,yetwhichissufficientlyrichand

specifictotelluswhatwecanormustdotoassimilatetechnologicalchange.Withsuchamodel,we

haveapossibilityofrepeatedly,deliberatelyandcreativelysettingaboutonadigitaltransformation.

Wecan,sotospeak,putourfingeronwhatchangesandwhatenduresinourbusiness.Withoutone,

wecanatbestimitatewhatothershavedone.Withoutit,digitaltransformationisblind–an

exhortationwithoutsubstance,repeatabilityorinsight.


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Part2:Thepowerofabstraction

Figure8:SubwayAbstract.Copyright1972MassimoVignelli

Whataboutabusinessistransformedwhenitsessentialnatureneverthelessstaysthesame?Inthe

caseofUber,forexample,whatallowsustorecognizeitasataxicompany,despitetheradical

reshapingofanentireindustry?Whatistransformedandwhatpersists?Thisisnotmerephilosophical

theorizingconcerning“quiddity”or“essence”–itisofgreatestpragmaticsignificanceforbusinessin

the21stCentury.Thefortunesofentireindustrieshingeontheanswer,asdoestechnologyassessment

andpolicymaking.

Myintentistonotonlydescribethephenomenonofdigitaltransformationatastructurallevel,butto

arriveataprescriptionforpurposefullysettingaboutmakingithappen.Iamlookingtoenactdigital

transformationratherthanmerelyobserveit.Iamseeking,ifnotarecipe,thenamethodfordeliberate

digitaltransformation.

Thepowerofabstraction

Youhaveperhapsheardthat“softwareiseatingtheworld”andthataneconomyof“disruption”is

upturningbusinessmodelseverywhere.Butfortheclothingretailer,theconsumergoodsmanufacturer


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ordistributor,theinsurancecompanyorthefinancialinstitutionseekingastrategicresponseto

technologicalchange,theseincantationsandcatch-phrasesareoflittleuseanddolittletoprovide

positiveinstructionorcriticism.

Norwillithelptocollectinstancesandadducefromthemacommondigitaltransformation‘signature.’

Thebusinessesandindustriesinvolved,theirdynamicsandimperatives,aresimplytoodiversetoarrive

atatechniqueoraninstrumentbyinduction.Whatwoulditmean“touber”theretailclothingindustry,

forexample?Toend-runMacy’sorNordstrom’sbymatchingtheconsumerwiththeclothing

manufacturerinChinaorBangladesh?Theconsumerlookstotheseretailerspreciselybecausethey

performtheservicesofselectionanddistributiononherbehalf.Thesimple-mindedtransplantationof

exemplarsfromthetaxibusinesswillonlyaccidentlyprovideustheprinciplesweareseeking.

Tosetabouttransformingabusinessinaprincipledanddeliberateway,weneedtounderstandwhat

“thebusiness”is,apartfromitsparticularpeople,offices,automations,andtangibleandintangible

assets.Weneedtodissociatefromparticulars,sothatwecanspeakoftaxicompaniesperse,

broadcastersperse,moviehousesperse--withoutregardtoanyparticularbusiness.Todosoisto

abstractfromspecificinstancesandtoidentifythosefeaturessharedbywholeclassesofbusinesses.

Abstractionisfundamentaltotheinnovationnecessaryfordigitaltransformation:

Intheinnovator’stoolbox,abstractionisoneofthemostpowerfultools.Forthecreativemind,itoffersawaytostepawayfromthemundanetofindfreshwaystoconceptualize…Thepowertoabstractisfundamentaltoinnovation.Whenideasarescarce,afreshviewpointmakesallthedifference.Abstractionisalsoahierarchicalprocess,andthatperfectlyfitstheneedsoftheinnovatorfacingcomplexproblemsrequiringsystemsolutions.

–CharlesOwenx


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Figure9:Abstractingahouse,fromOwen

Inmovingfromtheparticulartothegeneral,wecanfocusonthosefeaturesofathingthatareessential

toitsfunction,whichmightbeimplementedinnewways,orthatmightsharecommonpotential

solutionswithotherthings.Infigure2(perhapsatriteexample),weseethataplantmightservebetter

thanawallfordividingspace,givensomecriteriaofdesirability.Ifwecontractwithacompanyfor

utilitymaintenance,wemightinquirewhethertheyprovidecoolingsystemsworkinadditiontoheating.

Abstractionenablesthecreativere-assemblyofconceptsandtheirsubsequentrealizationinspecific,

particularthings:“[r]eleasedfromthementalrestrictionsofconventionalnamesandimagery,the

innovatorcanspeculatefreelyuponwhatahousemightbewithanewapproachtosurfaces,storages

andtherestofthenecessitiesofhomeliving.”xi


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Thebusinessassystem

Abstractionisnotmerelyamethodforinnovativethinking,itcanalsoprovidetheabilitytomodela

businessasasystem.Asystemisacollectionofcomponentsthatrelatetooneanotheraccordingto

principlesthatgoverntheirbehaviorandinteraction.Iwouldgosofarastoclaimthatitisonlywhen

renderedasasystemthatabusinesscanberigorouslydescribed,analyzed,assessed,measuredand

understood.

Asystematicviewofbusinessrequiresnotonlythatweabstractawayfromparticularsandidentify

thosefeaturesthatholdtrueofallinstances(e.g.,intheabovediagram,lamps,windowsandskylights

are“lighting”),butthatourabstractionsendureovertime–thattheyhaveenoughpermanenceforus

tosaythattheyaretheself-sameentitiesexhibitingtheself-samepropertiesattimeT0astheydoat

timeTn.Anorderprocessingdepartmentthattodayreceivesordersandtomorrowrefersthemonis

not“thesame”department,andwearethereforeunabletomakeanystablegeneralizationsaboutit.

Intheend,treatingthebusinessasasystemenableshumanbeingstoshareacommonpictureofthe

business–itmakesanydiscussionaboutthebusinesspossiblebyvirtueofthefactthatweusethesame

wordstodescribethesamethings.xiiItallowsustosaywhatthebusinessdoes,howitdoesit,whodoes

it,whytheydoitandwhenitgetsdone.Itallowsustosaywhataboutthebusinessisworkingandhow

well.Conversely,itallowsustosaywhatisfailingandwhy.

Mostimportantlyforthediscussionofdigitaltransformation,viewingthebusinessasasystemenables

ustoenvisionandmodelalternateconfigurationsforimplementingstrategyandfordeliveringvalueby

usingtechnology.Theabstractandenduringcomponentsofthebusinesssystembecomevariablesthat

canbemodified,replacedandaugmentedbymeansofmobilecommunications,dataanalyticsandeven

artificialintelligence.Byconceptualizethebusinessasasystem,the‘artofinnovation’isaidedbyafair

degreeofanalyticalrationality;transformationcanbeexploredinasystematicwayusingacommon

language.Itisforthisreasonthatanalystssaythat“digitaltransformationisn’treallyabout

technology.”xiiiDigitaltransformationisbusinesstransformation,causedorenabledbyinformation

technology.


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Businessarchitectureassystemarchitecture

Insofarasbusinesscanbedescribedasasystem,itisamenabletoasystemarchitecture.Asystem

architectureisaconceptualmodelthatdefinesthestructure,behavior,andmoreviewsofasystem.xiv

Thesystemarchitecturethatdescribesthestructureandbehaviorofabusinessisbusinessarchitecture.

Businessarchitecture,accordingtotheBusinessArchitectureGuild,is“ablueprintoftheenterprisethat

providesacommonunderstandingoftheorganizationandisusedtoalignstrategicobjectivesand

tacticaldemands.”xv

Inthelastandfinalpartofthispaper,wewillusebusinessarchitecturetomodeldigitaltransformation,

arguingthatitisthroughbusinessarchitecturethatwecanunderstandwhatdigitaltransformation

means,andthatbyusingbusinessarchitecture,strategyandbusinessmodels,wecansetabout

intentionallytoeffectuateadigitaltransformationineventhemoststaidandprosaicofbusinesses–in

thiscase,anordinarydrycleaningbusinessfightingtostayinbusiness.


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Part3:Anarchitecturalinterpretationofdigitaltransformation

Figure10:WaveoftheFuture.Imagefrom"WaveoftheFuture"posterbyBradPomeroyandJudyKirpich(1982)

Thestorysofar

Becausetransformationisbydefinitionafundamentalchangeinthenatureofathing,xvithemethodfor

purposefulchangemustlookbeyondtheparticularandaccidentalfeaturesofabusiness.Buildinga

websiteoramobileapptotakeordersonlineratherthanbyphoneisnotnecessarilytransformational

anddoesnotnecessarilyimpacteitherthebusinessmodelorthepositionofthebusinessvis-ā-visthe

competition.Suchchangescanbeverysuperficialandevencounterproductive,asmanyaCMOorCEO

canattest.

Transformationalchangerequiresthatweabstractfromparticularsandidentifythosefeaturesofa

businessthatareessentialtoitsfunctionandthatarestableovertime.Byidentifyingtheenduring

componentsofabusinessinarigorousandsystematicway,wefreetheimaginationtoenvision

alternateconfigurationsthatmightbettersatisfythegoalsweareafter.Farfromconstraining

creativity,anexactingandstructuredprocessenablestheimaginationbyprovidingdefinitenesstoour

abstractions.Finally,I’vesaidthatthatthetoolweneedforbusinesstransformationisasystem


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architecturethatthatdescribesthestructureandbehaviorofabusinessquabusiness–abusiness

architecture.

Businessarchitectureasessentialstructure

Iarguethattheconceptsofbusinessarchitecturexviiofferthejustthegenerativeabstractionsweare

seeking.Theyareamongthemostwell-developedanduniversalofbusinessabstractions,usefuland

comprehensibleacrossallbusinesses.Businessarchitectureprovidescommontermsforaddressingthe

what,who,howandwhyofallbusinesses,sothatwecanagree(ordisagree)onourdescriptionsof

particulars.Itprovidesforanessentiallycompletemodelofalltheelementscomprisingthebusiness,

andiscapableofaligningwithotherlow-level,domain-specificorviewpoint-specificmodelsofthe

businessrelatedtoIT,Marketing,ProductDevelopment,Strategy,Process,andsoon.

Businessarchitectureenablesustobuildamodelofaparticularbusiness(orofatypeofbusiness),

whichinturnallowsustoaskquestionsandposehypotheticalsaboutwhatthebusinessconsistsinand

howitoperates.Justasabuildingarchitectureestablishesabasicvocabularyandsetofprinciplesfor

describingsurfaces,structures,materials,functionalunits,aestheticpatternsandthelike,sotoodoes

businessarchitectureusecertainfundamentalconceptstodescribethewayabusinessisconstructed.

Thecoreelementsofbusinessarchitecturearevalue,capability,informationandorganization.These

arestable,enduringbusinessstructuresthatpersistoverlongperiodsoftime,bothduringthelifetime

ofaspecificbusinessandoverthecourseofhistoryforbusinessesofthatsort(existingforperhaps

hundredsofyears).Theseelementsarefundamentaltoabusinessandattachdirectlytostrategy,andit

istostrategywherewemustlookfirstfortrulytransformationalchange.


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Figure11:corebusinessarchitectureelements

Toavoidbecomingpedantic,IreferthereadertotheBusinessArchitectureGuild’sfreeintroductory

chapterofBIZBOK,xviiiortoitsvideooverviewxixforafulldescriptionofthebasicconcepts.Forthose

neverthelesswantingashortprimer,hereisafootnote.xx

Let’sforgeaheademployingbusinessarchitectureconcepts‘onthefly’inanexamplethatfollows.I’ll

hopetoconveysomeofthemeaningofthetermsfortheseconceptsbyusingtheminanimaginarybut

concretecontext.

Actlocally,thinkglobally,holdthestarch

Thesubstrateforourstoryofdigitaltransformationisabusinessfamiliartoanyonewhohaseverworn

dressattire:theneighborhooddrycleaner–itacceptsshirts,dressesandsuitsforcleaningand

pressing,givesyouapinkticketandmakesyourclothesavailableforpickupacoupleofdayslater,

clean,pressedandonhangersorfolded.

Whyusesuchahumble,prosaicsmallbusinessexampleforillustration?Businessarchitectureshave

beendevelopedforbanksandlargefinancialinstitutions,aircraftmanufacturers,drugcompanies,

insurancecompanies,utilitycompanies,airlinesandeventheU.S.PatentOffice.Dramaticcasestudies

•data and a context used or produced by a capability for decision-making, or as a product

•a network of business units and collaborative groups that have capabilities

•What the business does; its abilities and capacities for achieving outcomes

•What a stakeholder obtains from the business; the reasons the business exists

Value Capability

InformationOrganization


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ofdigitaltransformationhavebeendocumentedforpaintsmanufacturers,apparelmanufacturers,

internationalmortgagecompanies,mediacompaniesandairportoperationsspecialists.

Butifbusinessarchitectureissufficientlyuniversal,anddigitaltransformationsufficientlypervasive,

eachshouldapplyinequalmeasuretoallstrataofbusinessactivity.Smallbusinessretailersarenoless

affectedbytrulyprofoundchangesthanlargemultinationals,andthefundamentalstructureoftheir

operationsissimplerandmoreamenabletoillustrationthanthatoflargeandcomplexorganizations.

Solvingthestrategicchallengesofalocaldrycleanerwillbeclearer,simplerandperhapsevenmore

rewardingandentertainingthangrapplingwithalargeandcomplexbigbusiness.

Iwillfirstdevelopabaselinebusinessarchitectureforthedrycleaner,usingmyowncasual

acquaintancewiththewaydrycleaningoperates,supplementedbyamodicumofwebresearch.Ina

realworldsetting,thebusinessarchitecturewouldbedriventofargreaterlevelsofdetail,undergirded

bydetailedinterviewandreviewbysubjectmatterexpertsfarmorequalifiedthanI.Todetailareal

architecture,Iwouldexaminedocuments,interviewstakeholdersandengageindeepdiscussionsabout

whatadrycleanerdoeswiththosewhoactuallyperformthework.

NextI’llpositastrategyforthebusiness,whichwilllayoutsomebasicobjectivesandprovideatarget

stateagainstwhichitsinitiativecanbemeasuredandevaluated.Ithenengageinanactofimaginative

abstractioninvolvingboththerigorousstructuresuppliedbybusinessarchitectureandthefreeplayof

fantasticpotentialthatmoderndigitaltechnologyrepresents.Finally,Iwillspeculateonwhatato-be

architecturemightbe,whichisnecessarytofacilitatetransformativechangetothebusinessmodel.xxi

Sauber.LikeUberonlyCleaner

Sauberxxiiisafullservicedrycleaner,locatedonthemainhighwaynearthecommercialcenterofthe

city,butontheoppositesideoftownfromagrowingresidentialarea.Itoperatesaretailstorefor

customerstodrop-off,pick-upandpayfortheirclothing.Inanadjacentproperty,Sauberoperatesa

laundrythatallowsittosavecostsofoutsourcingandprovidefastturn-aroundforcleanlaundry.

Sauberexiststoserveitsstakeholders:itscustomers,owners,investorsandemployees.Itprovides

valuetothesestakeholdersthroughasetofconnectedactivitiesthatproducetheitemvaluetothe

stakeholder,calledvaluestreams.Sauber’smostimportantstakeholderistheCustomer,whoreceives


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freshlylaunderedclothespackagedforimmediateuse.Thecorevaluestreamthatprovidesthisvalueis

calledsimply“CustomerLaundry”anditiscomprisedofstagesthatencapsulatetheactivitiesthatmust

becompletedtodeliverthecustomervalue.ThevaluestreamforSauberisprobablyverysimilarto

otherdrycleaners’andlookssimplylikethis:

Figure12:CustomerLaundryValueStream

EachofthestagesCustomerIntake,ClothesCleanandCustomerFulfillmentproducesvaluefor

itsownstakeholder(whichmaybeanemployee),andeachhasititsownentryandexitcriteria.

Intake,forexample,isinitiatedbythecustomerstakeholderandthevaluedeliveredtothe

employeestakeholderiswash-ablelaundry,properlyidentifiedandtagged.Taggingthelaundry

enablesittotransitiontothe“ClothesClean”stage.

Eachstagerequirescertainabilitiesorcapacitiesinordertocompletesuccessfully.Inthecaseof

CustomerIntake,thebusinessmustbeabletogreetthecustomer,recordherorhisnameanddescribe

theclothingfordrycleaning,provideaquoteandareadydate,bundletheclothesforcleaningandtag

theclothingwithanumberandrecordthatnumberofareceiptforcustomerpickup.Eachofthese

businessaptitudesisacapability;“aparticularabilityorcapacitythatabusinessmaypossessor

exchangetoachieveaspecificpurposeoroutcome”.xxiiiInshort,capabilitiesarewhatthebusiness

does.Thecapabilitiesnecessarytosupporteachvaluestagemightlooklikethis:

CustomerIntake ClothesClean CustomerFulfillment

Customer


Customer

Washable Laundry

Washed Laundry

Clothes returned clean


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Figure13:ValueStagesandsupportingCapabilities

Eachcapabilitycanbedecomposedintomorespecificconstitutivecapabilities;ClothesTagging,for

example,mightconsistofTagPrinting,TagSequenceManagement,TagAttachment,TagNumbering,

TagMatchingandthelike(notshown).Thelevelofgranularityisdictatedbywhatisnecessarytofully

articulatewhatthebusinessdoesandtofullyidentifythebusinessobjectsxxivthatarerequiredforthe

analysis.

Capabilitiesactonbusinessobjects,whichmaybetangible(Clothes)orintangible(anAgreement).The

actionofcapabilitiesproducesaresult–an“outcome”–thatcanbeusedbyothercapabilities;for

example,AgreementCreationproducesanexecutedAgreement,whichbecomesaspecificationfor

capabilitiessupportingthe“Clean”valuestage(“6shirts–easyonthestarch–completebyThursday

the10th”).

Tothedegreethattheoutcomeofacapabilityhasaname,itcanformpartoftheessentialstructureof

aninformationmap–anotheressentialbusinessarchitecturemodelingprinciple.Aninformationmapis

comprisedofconceptslike“shirt”or“jacket”or“pants,”whichmaybeorganizedhierarchically(“dress

shirt”and“causalshirt”are“shirts”)andwhoserelationshiptootherconceptscanbespecified(“casual

shirtsarenotironed”).Theserudimentarybusinessconcepts,whichareundoubtedlypartofthepricing

structure,formavocabularythatcanbelaterbeusedtofoundandvalidateadatabaselogicalschema

anddriverequirementsfordataprocessing(we’llgettoIT/automationalignmentandrequirements

below).


• Customer

Greeting

• Agreement

Creation

• Clothes

Handling

• Clothes

Tagging

• Receipt

• Clothes Pre-

treatment

• Clothes

Washing

• Clothes QC

• Clothes Iron

• Clothes

Packaging

• Clothes

• Customer Greeting

• Customer Payment

Processing

• Agreement extinguishment


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Figure14:informationmapping

WemightcontinuetoelaboratethebasicarchitectureofSauber(oranydrycleaner)bycontinuingour

explorationintoinformation,andfromtheretoorganization(whichisnotthesameasanorgchart),

stakeholder,product,initiativeandpolicy.Eachofthesedomainsbringsitsowndomainconcepts(for

example,“Product”and“ProductLine”fromproductmapping),andeachofthesedomainconcepts

mapsbacktovalue,capability,informationororganization.Changesinanyofthedomainscanaffect

thestructureofotherdomains(e.g.,changestothecapabilitymapmayaffecttheorganizationmap).In

thisway,acomplete“blueprint”ofthebusinesscanbedeveloped,sharedandusedforavarietyof

purposes,frominvestmentanalyses,tomergersandacquisitionstonewproductrequirements,

outsourcing,supplychain,jointventure,complianceandahostofotherscenarios.

Location,location,location

Moreimmediately,however,weareconcernedwithhowtheownersofSaubermightemploy

technologytoaddressaveryfundamentalproblemintheirbusiness.Becauseofitslocation,Sauberis

atacompetitivedisadvantagetootherdrycleanersinthecity,mostofwhomarelocatedmuchcloser

tocustomers’homes.Moreimportantly,Sauberislosingbusinessascustomersmovefurtheraway

fromitsdowntownlocation.Sauberisincreasinglyinconvenienteventothe‘whitecollar’office

workerswhosecommutesnolongergopastSauber’sretailstorefront.Retailexpansionopportunities

intotheseresidentialareasislimited,expensiveandwillbefarfromSauber’slaundry,negatingthe

competitiveeconomicadvantagethatSaubergainsfromhavingitsowncleaningcapabilities.

Sauberoutlinesasimplestrategy(seeFigure6):itwantstogrowthecustomerbasewithoutgrowingits

retailgeographicalfootprint,andtoretainandgetmorerepeatbusinessbykeepingmorecustomers

longerandbyincreasingtransactionfrequencyandregularity.Eachoftheseobjectivesisdecomposable

intosub-objectives,whichcanbecomeever-morespecific.

menshirt

dressshirt casualshirt

ironed

pre-treated is

relationship between concepts subsumption relationship


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Figure15:SimpleStrategyMapforSauber

Whenthebusinesssuperimposesthesestrategyobjectivesonitsexistingvalueandcapabilitymap,

someinterestinginsightsbegintoemerge(seeFigure7).The“Growth”objective(left)isanchored

squarelyintheCustomerIntakevaluestreamstage–togainmarketshareandenternewmarkets

withoutgeographicexpansionmeansthatthecapabilitiescomprisingtheIntakestagewillneedtobe

examinedforinnovationpossibilities.Thesub-objectiveofminimizingdependenceongeographywill

happeninthisstage,usingthesecapabilities,ifatall.

Meanwhile,the“RepeatBusiness”objectiveis,bydefinition,deliveredaftertheReturnstage(afterthe

CustomerLaundryvaluestreamcompletes).Objectiveslikeincreasedloyaltyandincidencewillrequire

thatweexaminewhatcanbedonetoaffectthemineitherexistingvaluestages,orinanasyetnon-

existentpost-Returnstage(the“?”infigure7).

Grow Customer Base

Grab Market Share without Geographic

Expansion

minimize geographic importance

avoid location costs

Create New Markets without

Geographic Expansion

serve new locations serve new customer types

Gain More Repeat Business

Increase Loyalty

keep more customers for a longer period

Increase Incidence

encourage more frequent and

regular cleanings


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Figure16:InsightintoStrategicallyImportantCapabilities

Wearebeginningtoknowwheretolookinthearchitectureforchangestocapabilitiesnecessaryto

accomplishthestrategicobjectives,butwestilllackthedetailedinsightnecessaryfortransformational

change.

Anatlasoftheinnovationlandscape

RecallourearlierquotefromCharlesOwen:

Forthecreativemind,[abstraction]offersawaytostepawayfromthemundanetofind

freshwaystoconceptualize…Thepowertoabstractisfundamentaltoinnovation.When

ideasarescarce,afreshviewpointmakesallthedifference.xxv

Howwouldwegoabout‘steppingaway’fromourmundanedrycleaningbusinessandreimagininga

basicbusinessmodelthatisnearly200yearsold?xxviNowthatwehaveanabstract‘blueprint’of

GeographyIndependence

Post-Return/Pre-intakevalue?

?CustomerIntake ClothesClean CustomerFulfillment


• Agreement

Creation

• Clothes Handling

• Clothes Tagging

• Receipt Issuance

• Clothes Pre-

treatment

• Clothes Washing

• Clothes QC

• Clothes Iron

• Clothes Packaging




Processing

• Agreement

extinguishment


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Sauber’sbusiness(andindeed,ofalldrycleaners),howdowesolveforitsstrategicgoalsleveragingnew

andemergingdigitaltechnology?Howdowetaketheimaginativeleapthatallowsustore-

conceptualizeSauber’sbusinessasamid-21stCenturydrycleaner?

Businessarchitectureisofdirectandinstrumentaluseherexxvii

• First,“valuestreamshaveadirectanddefinedrelationshiptoautomationsofbusinessprocesses,

casemanagement,userinterfaces,andsimilarbusinessdesignconcepts.”xxviiiTheentiresetof

activitiesinvolvedinthedeliveryofvaluetostakeholdersmaybeaffectedbytechnology.Value

streamsprovideaframeworkforenvisioninghowthebusinesscanestablishinnovativesolutionsfor

managingstakeholderinteractionandautomationtoenableacustomer’slaundryjobtovisibly

transitionacrossandamongvaluestreams.Valuestreamanalysisbecomesawayofassessinghow

technologymightbeusedto,forexample,uniteavarietyofcustomertouchpoints–digitaland

non-digital–inawaythattransformscustomerexperiencefromaseriesofdisconnected

encounterstoaprogressivelyinformedconversationconcerningthecustomer’sneedsandhistory

asitrelatestoagivenvalueitem.Businessarchitecture,alignedwithacustomerexperience

analysis,showshowthecustomerstoryandthebusinessstoryinterlock.Thereismuchworkafoot

concerningmappingvaluestreamstothecustomerjourney,whichwillhelpusbetterunderstand

howtoalignbusinessandcustomerviews.xxix

• Second,technologyinstantiatescapabilities.xxxDigitaltransformationisabouttheextension,

enhancement,replacementorcreationofcapabilitiesthatareinvolvedinthedeliveryofvalue.The

capabilitymapbecomesafocalpointassessingapplicationfunctionality,usecasesandservices

orchestration.Capabilitiescanbemappeddirectlytocurrentstateapplicationarchitecture,which

allowsabusinesstodeterminewhereagivencapabilityisautomated,ifitisautomatedconsistently,

andwhattypeofstrategyshouldbeemployedtoaddresstheseandrelatedchallenges.Whereno

apparentmappingisfound,eithernoautomationexistsorthebusinessarchitectmustconsiderthe

possibilitythatshadowsystemsexistthatprovideautomation.xxxi

• Third,insofarasdigitaltransformationisprimarilyconcernedwithdigitaltechnology,itdirectly

affectscapabilitiesthatuseinformation.Theinformationmap,therefore,allowsustoidentify

opportunitiesforformalizing,codifyingandautomatingheretoforeinformaloreventacitbusiness

knowledge.Informationmapsdirectlytodataarchitecture.Robust,cross-business-unitdefinitions


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areimportant,andinformationmappingisthefoundationofbusinesssemanticsandbasic

relationshipconceptsthatequipdataarchitectswithconcise,agreed-uponbuildingblocksforthe

dataarchitecture.

• Finally,theorganizationmapcanhelpustounderstandtheimplicationsoftechnologicalchangefor

thebusinessunitsandpartnershipsthatconstitutethe‘human’partoftheenterprise.Business

unitsdelivercapabilities,andchangestoeitheraffecttheother.

• Figure17:StrategytoDeployment.SourceBusinessArchitectureGuild,2016

Thebusinessarchitecturebecomesasortofatlasfortransformationandinnovation,mappingout

theterritorywhereinsightandimaginationcanexploretheartofthepossible.Irefertothisas

“imaginativeabstraction”anditiswithoutadoubt,themostexcitingandenjoyableactivityonecan

engageininbusiness,becauseitisanactofdiscovery:

Thetruemethodofdiscoveryisliketheflightofanaeroplane.Itstartsfromthegroundof

particularobservation;itmakesaflightinthethinairofimaginativegeneralization;andit

againlandsforrenewedobservationrenderedacutebyrationalinterpretation.xxxii

Imaginationisessentialtotheprocessofdiscoveryinvolvedindigitaltransformation.Yet,untethered

imaginationwastesitselfandcan,atbest,produceutilityandevenbeautyinanaccidentalandrandom

way.Businessarchitectureservesaconstraintthatisnecessaryforcreativeimaginationandproductive

innovation.Itisbecauseabusinessisfetteredbyarealworldthattruecreativityinsolvingproblemsis


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necessary.Thedigitaltransformationpractitionermustbeknowledgeableofwhatispossibleand

feasibletechnologically,butmustalsobecognizantofwhatisrequiredbythebusinesstomeetits

objectives.Becausebusinessarchitecturealsosupportsperformancemanagementmethods,suchas

theBalancedScorecard,xxxiiianorganization’sbehaviors,results,andsuccesscanbemeasured,

reported,andachievedasdigitaltransformationisinitiated–providingthekindofdisciplinenecessary

toseeatransformationinitiativethroughfromidealitytoreality.

Meanwhile,backatthedrycleaners

Togrowitsintakefunnel,SauberrealizesthattheIntakevaluestageneednotbelocation-boundtoa

retailstoreatall.Inthepast,fieldingallofthecallsthatmightbemadeandsendingoutavehiclefor

timelywayforclothingpick-upwouldnothavebeenfeasible.Thevolumeofcallswouldhavebeentoo

greatforasingleclerk,resultingintheneedforanoperatorwhosetimewouldinsteadbeslack.Drivers

carryingmoneywasdeemedriskyandopentotheft.Opportunitiesforerrorweregreatandpick-up

routesandtimeswouldhavebeenwastefulandinefficient.TheCustomerIntakevaluestagewasof

necessityalocation-boundsetofactivitiesthatrequiredacustomertotraveltotheretaillocation.

Buttoday,most,ifnotall,ofSauber’scustomershaveamobilephone.Theycansignaltheneedfora

pickup,andtransmittheirorderdetailswithouteverleavinghomeandwithoutinvolvingahuman

operatorinaserial,customer-by-customertelephoneconversation.Thecapabilitiesinvolved–

CustomerGreeting,AgreementCreation,ClothesHandling,ClothesTaggingandReceiptIssuancecanall

beconducteddigitallyinacommunicationbetweenamobileappandaserver,withouttheneedfora

retailpresence.Themobilepresencegreetsthecustomerbyname,allowshimorhertospecifya

pickuporder,dateandtime,seeaprojecteddeliverytimeandaddittotheircalendar,pre-payforthe

order.Atruckwithsufficientstorageandafree,weather-proofdrycleaningboxenablesSauberto

conductIntakeatthecustomer’shome.

Moreover,inre-evaluatingthecapabilitiesinvolvedinCustomerIntake,wehaveacluetotransforming

the‘otherend’ofthevaluestreaminvolvedinCustomerFulfillment.Thesamemobileappcanalert

customerstotheavailabilityofcleanlaundry(viavariousnotificationmedia)andenablethecustomerto

setadeliverydateandtime.Furthermore,becausecustomerlocationandtimeinformationcanbe

immediatelyenteredintoaconstantlyupdatingroutingalgorithm,Sauber’sdrivercanreceivepoint-by-

pointGPSdirections,optimizedagainstorderpriority,drop-offordersandtimeofday.Routing


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algorithmsandtheorchestrationofordercreationactivitieswithorderfulfillmentactivitieswillallow

thedrivertocombinepickupanddeliveryruns.Thisre-imaginingatanarchitecturallevelisdepictedin

Figure9below.

Toincreasecustomerloyaltyandorderincidence,anewvaluestreamstagemayneedtobeadded,

whichhasthepurposeof“feeding”thecapabilitiesofotherstageswithcorrelationsbetweencustomer

satisfactionandbusinessperformance.Anewcapabilityinstance–perhaps“Evaluate”–mustshowup

ineachoftheexistingvaluestagestoprovidemetricsonperformanceofeachoftheircapabilities.New

organizationalbusinessunitsmayberequiredinordertoprovidethesenewcapabilities.

Ifweexaminethebusinessarchitecturalimplicationsofallthis,weseethatonce-simplecapabilities–

CustomerGreeting,AgreementCreation,ClothesTaggingandReceiptIssuance–havenowbecome

complexandmulti-facetedandwillberealizedasautomatedmachineactivities.Inthepast,the

“signal”ofthecustomer’sdesirefordrycleaningwasthattheyshowedupatalocation.Now,the

customerwillinitiatethevaluestreamfromanappandtheClothesHandlingcapabilitiesoftheIntake

stagewill,sotospeak,showupatthecustomerlocation.Inthisway,oldcapabilitiesareinstantiatedin

averynewform.Thecapabilitiesthatareaffectedbytheexistenceoftechnologyinthenewstrategy

areidentifiedbybluegearsinFigure9.The‘internal’structureofthesecapabilities,togetherwiththeIT

andorganizationsystemsthatownthem,aresubjecttosubstantialrenovation.


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Figure18:transformationoptions

Insomecases,astrategymightcallfortheconstructionofentirelynewvaluestreamsorvaluestream

stages.Forinstance,anewvaluestreamstage,“RegisterProspect,”mayberequiredtooptionallyallow

thecustomertostorebasicaccountinformation(e.g.,creditcard)andeventransmittheirpickup

locationautomatically.Theydon’tdothistoday,inthephysicalretailenvironment.

Theinformationmap,derivedfromthecapabilitymap,canserveasrequirementsforITdevelopment

initiatives,bothwithregardtotheappsthatneedtobedevelopedandthedatamodelthattheseapps

willbeworkingon.Indeed,theinformationmapformsasortofbusiness-ledITdevelopmentinitiative,

whichtracestheentirerelationalschemadesignbacktothebusiness-developedinformationmap:

3


• Agreement Creation


• Clothes Tagging

• Receipt Issuance

•�Pick-up Routing

•�Pick-up

• Clothes Pre-treatment

• Clothes Washing

• Clothes QC

• Clothes Iron

• Clothes Packaging




Processing

• Agreement

extinguishment

•�Return Routing

•�Return

Clean ReturnIntake

Customer Name

Customer Contract

Tag Number

Receipt

Tag Number

Availability Notice

Availability Notice

Tag Number

Customer Contract

Info

rmat

ion

Con

cep

tsSauber

Retail

Laundry

Maintenance

AdministrationV

alue

Map

Org

aniz

atio

n M

ap

Register? Evaluate?

Cap

abili

ty M

ap

Payment invoice &

Memo

Technology Capability Candidates =

� = new capability

Services Orchestration

Data Schema Designs =


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Theinformationmapisanabstractmodelofdata.Arelationalschemacanbeextracted

fromaninformationmapbythefollowingprocedure:

1. SelectaClassthathasabusinessidentity(i.e.,itcorrespondstoaBusinessEntity[i.e.,

businessobject])

2. IdentifytheattributesofthatClassthatservetoidentifyIndividualsintheClass–thesewill

becomethenaturalkeys

3. IdentifyallRolestheselectedClassparticipatesinthathave1-1relationshipswiththeClass

andwhosetargetIndividualsarelifetimedependentontheexistenceofIndividualsinthe

selectedClass–thesewillbethecolumnsoftheClass.

4. IdentifyallotherRolesandimplementthemasforeignkeyorassociationtables

relationship.

SimilartechniquescanbeusedtoextractXMLschemaandRDFschemamodelsfromthe

informationmap.xxxiv

Thus,bymappingthekeyinformationconceptsimplicitintheinteractionbetweencapabilities(see

Figure9atbottom),wehaveanascentrelationalschema,subjecttodevelopmentbyaskilledDBAbut

ledbythebusinessstrategy.Thisisanimportantfeatureofbusinessarchitecture–itisadescriptionof

thebusinessbythebusiness,andonewhich“normalizes”alldescriptions,eventhoseemployedbyIT.

Theorganizationmap–thefinaldomainbelongingtothebusinessarchitecturecore–istoadegreea

consequenceratherthandriverofdigitaltransformation.Insofarasacapabilityisrealizedbyabusiness

unit,thebusinessunitsthatownthesenewly-instantiatedcapabilitiesmustevaluatechangesintheir

compositionandinteraction.Theorganizationmapallowsustoperformthiskindofanalysis.The

roughorganizationmapsuperimposedonthevaluestreamaboveindicatesthatmuchoftheretail

businessunitisdramaticallyaffectedbytheproposedtechnologytransformation.Onlytwobusiness

unitshaveanydirectinvolvementinthecustomervaluestream,andonlyRetailiscustomer-facing.The

alignmentofbusinessunitstocapabilitiesissimpleandstraightforward:Retailhasallofthecapabilities

necessaryforIntakeandReturn,andLaundryhandlesallofthecapabilitiesnecessarytoaccomplishthe

Cleanvaluestage.TothedegreethatSauberwishestoholdontoitsretaillocation,staffingmaybe

largelyunaffected,butthiswillultimatelybedeterminedbythesuccessofitsdigitallyrenovatedform.

ThesimpleorganizationsuitsthesimplebusinessmodelcurrentlyusedbySauber.

Ofcourse,allofthemodificationstocapabilityinstances,informationconceptsandorganizationmaps

canbetracedbacktothestrategymapobjectives.Thistrace-abilityiskey,foritallowsinitiativestobe

mappedtotransformationsrequiredincapabilities,informationandorganization,andmeasuredfor


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budget,timelinessandeffectiveness.Thedatarequirementscanbederivedfromtheinformationmap

andapplicationfunctionalrequirementsfromthecapabilitymap.Inthisway,thebusinesscancharta

transformationalcourseforitself.

Conclusion:BusinessArchitectureastheMeaningofDigitalTransformationWebeganthisarticlebyasking:whatdoes“digitaltransformation”meanandhowmightwesetabout

deliberatelytodigitallytransformabusiness?Sofarasthefirstpartofthequestionisconcerned,there

seemedtobeasmanydefinitionsastherewereauthors.Forthemostpart,theterm“digital

transformation”wasostensible;itwasusedtopointtowhattheauthorthoughtwasaninstanceofthe

phenomenon.

Theseostensiveapproachesmightbehelpfulinconveyingrealworldexamplesandcasestudies,but

theydolittletohelptoactuallyplanatransformation.Sauberwouldbehard-pressedtore-imagineits

businessbasedonwhatbanks,airlinesandshippingcompanieshavedoneusinginformation

technology.Thevariouswhitepapers,researchfindingsandmarketingglossiesaremerelyindicative,

ratherthanprovidingproceduralandsystemicknowledge.

Now,withbusinessarchitectureasawayofunderstandingtransformation,weareatlastinapositionto

answerthequestionsweposedattheoutset.Tobeginwith,wecanofferanintensionaldefinitionof

digitaltransformation(i.e.,onethatstatesitsnecessaryandsufficientconditions)asfollows:

Digitaltransformationisamodificationtobusinesscapabilitiesenabledbydigitaltechnologythat

empowersthebusinesstoachievestrategicobjectivesbymeansofchangesitsbusinessmodel.

ThissquareswithMIT/Deloittedictumthat“strategy,nottechnology,drivesdigitaltransformation”,xxxv

insofarasitisnottechnologypersethatistransformative,buttheimpactoftechnologyonthe

fundamentalstructureofthebusiness,understoodasacollectionofvaluestreamsenabledby

capabilities.Digitaltransformationisaspeciesofbusinesstransformation.

Wehavealsodescribedatransformationmethodology.Itrequiresanas-isarchitecturalanalysisof

somedepth,relevanttothevaluestreamsatissueinthecompany’sstrategicobjectives.Itthen

employstheartofimaginativeabstraction,constrainedbyknowledgeofwhatistechnologicallypossible


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andfeasibleandbytheobjectivesthatarerequiredbystrategy.Finally,itre-mapscapabilityinstances

inadigital-technologicalformandlaysthefoundationforITinitiativesnecessarytocarrythemout.

Thenotionissimilartothesketch(fromBIZBOK)inFigure8,whichpositsaparallelbusinessandIT

transformationprocess.Whatisdifferentinthecaseofdigitaltransformationisthattheas-isIT

architecturemaynotevenexist(aswasthecasewithSauber),butmayhavetobeinventedasa

consequenceofthebusinessmodelchangenecessarytofulfillstrategicobjectives.

Figure19:Business/ITTransformation-TSG,Inc.

Ofcourse,noneofthisistosuggestthatIcanoffera“cookbook”fordigitaltransformation.Thereisno

algorithmfordisruption,anymorethanthereisamarketingplanforassuringaviralvideo.NoramI

suggestingthatUber,AirBNBandotherarchetypesoftransformationsomehowemployedadisciplined

valuestreamandcapabilityanalysistoarrivewheretheydid.Myambitionwassimpleafterall:topoint

uptheneedforsomekindofsharedconceptualframework–anarchitecture–ifwearegoingtoeven

begintospeakmeaningfullyanddeliberatelyaboutdigitaltransformation.IhopeIhavehadsome

successinthis.

###


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iWewillustitlecaseonlywhenreferringtoitasatitle–asin“theDigitalTransformationliterature”.iihttps://en.wikipedia.org/wiki/Digital_transformationiiiWorldEconomicForuminCooperationwithAccenture,DigitalTransformationofIndustries,2016ivMITSloan/CapgeminiConsulting.2011.vIBMInstituteforBusinessValue,Digitaltransformation,2011viI’mthinkinghereofClaudeShannon,HerbertWeinerandthelike–theearlyAItheorists.TheauthorwaslegalanalystatthenowdefunctOfficeofTechnologyAssessment–anagencyoftheUSCongresschargedwithdocumentingdigitaltransformation(amongothertechnologicalimpactsonpolicy)forHouseandSenateCommitteesconcernedwithtechnology-relatedlegislation.viiIBMInstituteforBusinessValueviiiForasystematicreviewofthedigitaltransformationliterature,see:AssociationofInformationSystems,TheShapeofDigitalTransformation:ASystematicLiteratureReview,http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1027&context=mcis2015,2015.ix“Executivesaredigitallytransformingthreekeyareasoftheirenterprises:customerexperience,operationalprocessesandbusinessmodels(seeFigure3).Withineachofthethreepillars,differentelementsarechanging.Thesenineelementsformasetofbuildingblocksfordigitaltransformation.Currently,nocompanyinoursamplehasfullytransformedallnineelements.Rather,executivesareselectingamongthesebuildingblockstomoveforwardinthemannerthattheybelieveisrightfortheirorganizations.Thetenthelement–digitalcapabilities–isanessentialenablerfortransformationsinallareas.”Thesesamethemes–customerexperience,internalbusinessprocessandbusinessmodeltransformation–areechoedintheWEFandIBMpapersonthesubjectaswell.x"ThePowerofAbstraction"2009,TheBusinessProcessManagementInstitute.https://www.id.iit.edu/artifacts/the-power-of-abstraction/xiIbid.xiiHayakawa,S.I.(2016-06-14).LanguageinAction:AGuidetoAccurateThinking,ReadngandWriting(KindleLocations1849-1850).BarvasBooks.xiiiKaneetal.,ResearchReportStrategy,NotTechnology,DrivesDigitalTransformation,MITSloanManagementReview,Summer2015.xivhttps://en.wikipedia.org/wiki/Systems_architecturexvBusinessArchitectureGuild,AGuidetotheBusinessArchitectureBodyofKnowledge,version5.0,2016.xviTheBusinessDictionarydefinestransformationas“transformationimpliesabasicchangeofcharacterandlittleornoresemblancewiththepastconfigurationorstructure.”(http://www.businessdictionary.com/definition/transformation.html).Moregenerally,manydictionariesdefineitas“acompletechangeintheappearanceorcharacterofsomethingorsomeone”(see,e.g.,http://dictionary.cambridge.org/us/dictionary/english/transformationorhttp://www.dictionary.com/browse/transformation).xviiAspracticedbytheBusinessArchitectureGuildSeehttp://businessarchitectureguild.org xviiiSee:http://c.ymcdn.com/sites/www.businessarchitectureguild.org/resource/resmgr/BIZBOK5_1publicdocument/Introductionv5.1.pdfxixSee:https://vimeo.com/157787273


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xxThecoreelementsor“domains”usedbybusinessarchitectsintheanalysisofabusinessare:value,capability,informationandorganization.Eachisdescribedbelowinsomedetail.

• Valueisabenefitderivedbyastakeholderinteractingwiththebusiness.xxAstakeholder,inturnisaninternalorexternalindividualororganizationwithavestedinterestinachievingvalueininteractionwiththebusiness.xxAcustomerisclearlyastakeholder,butsotooisapartner,asupplier,aninvestororaregulator.Abusinessexiststoprovidevaluetostakeholdersandhasnootherreasontoexist.Valueisprovidedbyabusinessinaseriesofactivitiesthatcanberepresentedasstagesorstepsina“valuestream.”Thus,whileataxicustomerisseekingsatisfactionintheformofsafe,rapidandaffordabletransporttoherdestination,itoccursin“valuestages”involvinghailingthecab,passengerpick-up,passengertransport,passengerdrop-offandpassengerpayment.

• Acapabilityiswhatabusinessdoestoproduceandprovidevalue;itisanabilityorcapacitythatabusinessmaypossessorexchangetoprovideaparticularoutcomeorpurpose.xxCapabilitiesareexpressedascompoundnounscomprisedofabusinessobjectandoneormoreadjunctnounsthatmodifiesit:CustomerCommunications,TradeSurveillance,AccountReconciliation,PackageShipment,InsuranceClaimManagementareexamplesofcapabilities.Capabilitiescanbedecomposedoranalyzedintoconstituentcapabilities.Thus“AccountManagement”mightbecomprisedof“AccountAcquisition,”“AccountInformationManagement,”“AccountContactManagement,”“AccountMatching,”“AccountExtinguishment”andthelike.Capabilitiesmayexistinmanydifferentbusinessunitsandinmanyformsacrossacompany,butaredefinedonlyoncefortheentirebusiness,andthebusinesshasonlyone“capabilitymap”thatdescribestheentiretyofitscapacitiesnecessaryfordeliveringvalue.

• Informationisdataandacontextforitsinterpretation,andinbusinessarchitectureiscomprisedofconceptsthatrepresentbothtangibleandintangiblebusinessobjectslikea“loan,”“automobile,”“customer,”“product,”“location,”“account,”“policy”andthelike.Aninformationmapshowstheseconceptsintheirinterrelationshipwithoneanotherandwithcapabilities,whichcreate,modify,useanddestroyinformation.Informationrepresentingabusinessobjectcanbetracedthroughitsinteractionswithcapabilitiesalongavaluestream.

• Finally,anorganizationissocialunitofpeople,systematicallystructuredandmanagedtomeetaneedortopursuecollectivegoalsonacontinuingbasis.xxAnorganizationiscomprisedofbusinessunits,whichareformalorinformalcollectionsofpeopleorganizedaroundaspecificpurpose,andwhichconstituteabusinesscapability.Thestandardbusiness“orgchart”isonewayofmappinganorganizationalonglinesofcommandandcontrol,butthisformoforganizationmapisnottheexclusiveoreventhemosteffectivewayorrepresentinganorganization.Itisoftenmoreeffective,forpurposesofassemblingabusinessarchitecture,torepresentbusinessunitsinrelationtothecapabilitiestheypossess–thiswilloftenbringinextra-enterprisebusinessunitssuchastradingpartners,suppliers,consultantsandthelike.

Businessarchitectureisextendedbystrategy,initiative,stakeholder,productandothernon-coreconcepts,buteachofthesemapsbacktotheabove“core”elements,andsoprovidesaricherunderstandingoftransformationalchange.Businessarchitectureisalso“aligned”withvariousotherenterpriseandITarchitecturalpractices,suchasLeanSixSigma,CaseManagement,SoftwareDevelopmentLifeCycle,TOGAFandthelike.Theactualelaborationofbusinessarchitectureconsumeswellover600pagesandmanydozensofrelatedpresentations,whichtellthestoryofhowthe


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architecturerelatestostrategy,businessmodelcreationandbusinessprocessmodeling,andhowitcanbeusedtoaligntoITstrategyandITtransformationinitiatives,casemanagementandotherbusinessdisciplines.xxiIusethephrase“businessmodel”throughoutthisarticle,butneverelaborateonitsuseormeaning.IhaveinmindOsterwalder’sfamous“businessmodelcanvas”(https://en.wikipedia.org/wiki/Business_Model_Canvas),whichhasbeeninfluentialinnormalizingdescriptionsoftheelementsthatcompriseabusinessmodelandexploringtheirdynamics.Infact,thebusinessarchitectureliteraturemakesextensivereferencetothebusinessmodelcanvasandthesetofrelationshipsatwork.Anoriginalversionofthisarticlegotoverlycomplexintryingtointegratebusinessmodelconceptsintoanalreadylengthytext.So,despitethefactthatitisacoreconcept,Imerelyalludetoitwithoutelaboration.Ihopetomakeupforthisinafuturearticle.xxiiGermanfor“clean,”whereasUberisGermanfor“above”or“over.”xxiii1UlrichHomann,“ABusiness-OrientedFoundationforServiceOrientation”,Feb.2006,http://msdn.microsoft.com/en-us/library/aa479368.aspx.xxivBusinessobjectsaretangibleorintangibleentities(e.g.,Agreement,Shipment,Palette…)thatthebusinessusesorprocesses.xxv"ThePowerofAbstraction"2009,TheBusinessProcessManagementInstitute.https://www.id.iit.edu/artifacts/the-power-of-abstraction/xxvihttps://en.wikipedia.org/wiki/Dry_cleaningxxviiBusinessArchitectureGuild,AGuidetotheBusinessArchitectureBodyofKnowledge®version5.1.p.415.Hereinafter“BIZBOK”.BIZBOKstates:

• Businessarchitecturehasadirect,unambiguousrelationshiptoITarchitecture.• Businesscapabilitieshaveadirectanddefinedrelationshiptoapplicationsanddeployable

businessservices.�• Valuestreamshaveadirectanddefinedrelationshiptoautomationsofbusinessprocesses,case

management,userinterfaces,andsimilarbusinessdesignconcepts.�• Informationconceptshaveadirectanddefinedrelationshiptodatadefinitionswithinthedata

architecture.xxviiiBusinessArchitectureGuild,AGuidetotheBusinessArchitectureBodyofKnowledge®version5.1,Page416.Hereinafter“BIZBOK”.xxixSee:https://www.brighttalk.com/webcast/12231/219691/business-architecture-gateway-to-business-transformationxxxThinkofacapabilitylike“CustomerComplaintReceipt”–intheolddays(whenIwasmanningacustomerservicephone),thismeantahumanbeingtakingcallsastheycameinandtryingtodiscernthenatureofthecomplaintandtheappropriatehand-off.Thecapabilitywasembodiedinahumanandeachhumanwasaninstanceofthecapability.Forbetterorworse,advancesinphonetechnologyhaveenableddiagnosticsandevenservicetobeautomated,vastlydecreasingthecostsofthiscapabilityand(becauseofscale)increasingcustomersatisfaction(onenolongerstaysonholdwaitingforahumanbeing).xxxiBIZBOK,page470xxxiiA.N.Whitehead,ProcessandReality:AnEssayinCosmology(1929).Weprefer“abstraction”toWhitehead’s“generalization,”buttheyareessentialsynonymousinthiscontext.xxxiiiTheconceptwasinitiallyintroducedbyRobertKaplanandDavidNortoninaHarvardBusinessReviewarticlein1992andhassincethenbeenvotedoneofthemostinfluentialbusinessideasofthepast75years.xxxivBIZBOKpage470.


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xxxvSeethereportofthesamename,subtitled“FINDINGSFROMTHE2015DIGITALBUSINESSGLOBALEXECUTIVESTUDYANDRESEARCHPROJECT”,PublishedinSummerof2015byMITSloanandDeloitteUniversityPress.

The Architecture of Change

Leadership & Management

Transcript of The Architecture of Change