Understanding Business Architecture
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Transcript of Understanding Business Architecture
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FROMHEREON.COM ENTERPRISEARCHITECTS.COM
UNDERSTANDING BUSINESS ARCHITECTUREV3.7 April 2016
J U D I T H O J A - G I L L A MStrategic Business ArchitectApplied Business Architecture
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FromHereOn is an international professional services firm specializing in strategy & architecture services
ABOUT FROMHEREON
Our Enterprise Architecture Practice has evolved from its foundations in our parent company Enterprise Architects.
Over 12+ years we have helped many clients across a wide range of industries to build market-leading architecture teams.
Our core value proposition is to help clients unlock the value of their investments using the principles of architecture.
We are experts in architecture with a belief that architecture is important and, when done well, will profoundly improve corporate performance – quite simply, Architecture is in our DNA.
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At EA Learning, we are passionate about equipping individuals with the knowledge, tools and capabilities to add tangible value to the businesses that our customers work in. We offer a broad range of certification and applied learning courses to give our attendees the credentials and toolkits to be successful in their careers..
We are dedicated to supporting the advancement of the industries that we work in and as part of this we are proud to have supported a number of learning initiatives and standards body developments with organizations such as the Open Group, IIBA and Open Universities Australia.
Our goal is for every attendee to walk away at the end of a training course with a set of tools, techniques and approaches that they can put into practice in their role.
EA LEARNING SERVICES
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OUR APPROACH –“ARCHITECTURE THINKING”
1Establish Consensus for Strategy
2Define A Common Reference Point
3Take A Coherent Approach to Solutions
4Build A Strategically Aligned Roadmap
MOTIVATION MODEL BUSINESS MODEL
SERVICE MODEL
CAPABIL ITY MODEL
Peop le
ROADMAP
GOVERNANCE
* Closed feedback
loop to
Motivation Model
In format ion
Technology
Process
MARKET MODEL
MEANS ASSESSMENT
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT PERFORMANCE• Financial
• Customer
• Internal (current)
• Internal (long-term)
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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 operationalize business strategy, thereby helping business leaders avoid a risky leap directly from strategy to specific project investments.
We like to refer to it as “The design of business”.
WHAT IS BUSINESS ARCHITECTURE?
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Creating close alignment between business goals and IT strategy
WHY BUSINESS ARCHITECTURE?
Business Architecture provides the context for
technology, aligning the technical architecture
domains to long term business need.
Business Architecture means:
• A common language, founded in business
terms, not IT-speak
• A more joined-up approach to assessment
and selection of new projects
• IT investments are directly aligned to business goals
• Greater opportunities for reuse
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BUSINESS ARCHITECTURE CONNECTS STRATEGY TO IMPLEMENTATION
IMPLEMENTATION
STRATEGY
BUSINESS ARCHITECTURE
IMPLEMENTATION
STRATEGY
BUSINESS ARCHITECTURE
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FAILURE POINTS BETWEEN STRATEGY & IMPLEMENTATION
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
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?
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BUSINESS ARCHITECTURE OR I.T. ARCHITECTURE?
Value increases as the mandate increases.
EA = IT ArchitectureImprove project performance
EA = Enterprise-WideIT Architecture (EWITA)Improve IT performance
EA = Business Architecture (BA) + EWITAImprove Business Performance
EA = Strategic Enabler + BA + EWITAImprove Market Performance (Shareholder Value)
A
B
VA
LU
E
MANDATE
C
E
EA = Product Architecture + Business Architecture (BA) + EWITAImprove Product/Service Performance
DBusiness Architecture is
seen as a positive
progression away from IT
Maximize Product profitability
Maximize market share
Maximize customer lifetime value
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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 synchronized 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 GOAL OF A GOOD BUSINESS MODEL IS TO CREATE COHERENCE
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
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STRATEGIC COHERENCE: CAPABILITY BASED PLANNING
Capability driven architectures are designed to support the strategic objectives of an organization.
Capabilities consist of people, process, Information and technology
MISSION
STRATEGIES
TACTICS
VISION
GOALS
OBJECTIVES OUTCOME
CAPABILITY
People
Process
Technology
Information
To fully understand a capability all these components must exist regardless of their maturity level
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Some Definitions…
WHAT IS A CAPABILITY?
An ability that an organization, person, or system possesses. Capabilities are typically expressed in general and high-level terms and typically require a combination of organization, people, processes, and technology to achieve. For example, marketing, customer contact, or outbound telemarketing.– The Open Group
The power or ability to do something. – Oxford English Dictionary
Measure of the ability of an entity (department, organization, person, system) to achieve its objectives, specially in relation to its overall mission. – Business Dictionary
The ability to perform or achieve certain actions or outcomes through a set of controllable and measurable faculties, features, functions, processes, or services. – Wikipedia
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Some Guidelines…
IDENTIFYING CAPABILITIES
> All enterprises have ‘capabilities’: they are what the enterprise must be able to DO in order to fulfill its mission.
> Capabilities are expressed as outcomes and should be agnostic of technology, product, organizational unit, etc.
> Capabilities will tend to persist over time.
> Capabilities can be described in a simple one-page view… the Business Capability Model.
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The capability model represents the "map" of the organization…
THE BUSINESS CAPABILITY MODEL
…and like a map, the capability model can have many overlays, each communicating a different message based on the same underlying structure.
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TYPICAL CAPABILITY MODEL ‘OVERLAYS’INSURE Co. Business Capability Model with Current Maturity Overlay Business Capability Model
Version: 3.0.0
Created: 18/03/2014 by Enterprise Architects
Updated: 15/05/2014 by Enterprise Architects
Sources:
Description: A Business Capability Model provides an anchor point for defining the organisation on a page, giving the stakeholders an overall view of the business. This overlay describes the level of maturity
of the capabilities that have been assessed.
Concerns Addressed: What are the capabilities required to support the strategic direction and deliver consistent outcomes? What are their levels of maturity?
Stakeholders: Business Executives, Business Managers, Business SME’s, IT Executives, Solution Managers, Solution Designers, IT Operations, Project Teams and Architects
© Enterprise Architects (Vic) Pty Ltd 2014
Maturity
Operations
Core Value Creating Capabilities
Market Development and Sourcing Productising and Bundling Sales and Distribution Servicing
Shared Services
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Low Maturity
(Ad hoc)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Low-Medium
Maturity
(Developing)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Medium
Maturity
(Repeatable)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Medium-High
Maturity
(Defined/
Managed)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
High Maturity
(Optimised)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Maturity
Unknown (Not
Assessed)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Marketing
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Customer Service
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Business Development & Sales
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Client Development
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Manufacturing & Maintenance
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Service
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Operations Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Strategy & Execution
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Finance & Actuarial
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Human Resource Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Information Technology Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Underwriting and Risk Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Legal & Compliance
ProcessPeople Info. Tech.
N/A N/AN/A N/A
External Relationship Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Performance Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Value Transaction Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Process Execution
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Document Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Resource Allocation
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Business Process Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Knowledge Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Decisional & Business
Intelligence
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Premium Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Payments Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
New Business
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Underwriting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Policy Owner Service (POS)
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Recurring Claims
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Policy Administration
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Consolidated Reporting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Lump Sum Claims
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Delivery Method Registration
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Claims Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Enquiries
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Complaints Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Retention
ProcessPeople Info. Tech.
N/A N/AN/A N/A
On-boarding
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Adviser Remuneration
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Leads Generation
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Leads Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Broker Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Needs Analysis
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Selection
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Quotation & Illustration
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Strategic Pipeline
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Tactical Pipeline
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Policy Acquisition
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Application
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Tenders
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Specialist Training
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Client Servicing
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Partner Strategy & Support
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Renewals
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Consulting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Dealership Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Sponsorship
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Client Communications
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Adviser Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Research
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Development
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Pricing
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Packaging
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Reinsurance
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Market & Data Analytics
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Campaign Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product Launch
ProcessPeople Info. Tech.
N/A N/AN/A N/A
External Market
Communications
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Brand Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Promotions
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Advertising
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Internal Sales Tools
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Channel Marketing
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Operational Performance
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Operations Quality Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Technical Operations Training
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Employee
Development &
Training
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Employee
Retention
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Talent
Recruitment and
Sourcing
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Candidate
Assessment
and Selection
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Succession
Planning
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Talent
Development &
Training
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Employment
Offers &
Contracts
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Government &
Industry
Relationship
ManagementProcessPeople Info. Tech.
N/A N/AN/A N/A
Employee
Performance
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Workforce
Planning
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Talent
Redeployment
& Retirement
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Regulatory
Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Directors
Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Legal & Ethical
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
External
Administration
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Investor
Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Public Relations
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Product/
Channels
Profitability
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Management
Reporting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Corporate Risk
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Underwriting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Business
Continuity
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Internal Audit
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Reinsurance
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Company
Secretary
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Due Diligence
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Advice
Provisioning
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Compliance
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Contract
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Architecture
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Application
Development
ProcessPeople Info. Tech.
N/A N/AN/A N/A
IT Service
Delivery
ProcessPeople Info. Tech.
N/A N/AN/A N/A
IT Security &
Risk
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Disaster
Recovery
ProcessPeople Info. Tech.
N/A N/AN/A N/A
IT Vendor
Relationship
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Process
Execution
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Infrastructure
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Investment
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Financial
Accounting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Financial
Management &
Analysis
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Procurement
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Actuarial
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Statutory &
Regulatory
Reporting
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Capital
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Facilities
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Cash
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Strategy
Research
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Project Portfolio
Selection
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Benefits
Realisation
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Government
Policy
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Strategy
Management
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Project
Execution
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Enterprise
Architecture
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Strategy
Planning
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Project Portfolio
Prioritisation
ProcessPeople Info. Tech.
N/A N/AN/A N/A
Change
Management
> Commodity vs. Differentiating Capabilities
> Strategic importance
> Organizational ‘owners’, FTE numbers and costs
> Current / target Maturity levels and gaps
> Pain Points
> Projects
> Technology and Applications
The more information we overlay on the model, the more we learn…
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THE ROADMAP CHALLENGE…
“What are the changes between the current state and the future state of the architecture?”
“How are my strategic objectives being realized through my architecture and program of work?”
“What is my current investment roadmap to achieve the required changes?”
“Where are the dependencies across the program of work?”
Typical Stakeholder Concerns
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DEVELOPING A CAPABILITY-DRIVEN ROADMAP
Coherence: technology change initiatives will also impact the People and Process dimensions of the Capabilities.
Capability Uplifts are often delivered in multiple increments – these Capability uplifts can be grouped into work packages.
A Business Architecture approach will provide clarity on how different solution options will enable capabilities….
….in turn creating traceability from strategy to implementation.
Work Packages
Work Packages
MotivationBusiness
Model Capability
ModelTarget
Architecture
Maturity & Gaps
Work Packages
Current State
Work Packages
Work Packages
MOTIVATIONBUSINESS
MODEL CAPABILITY
MODELTARGET
ARCHITECTURE
MATURITY & GAPS
WORK PACKAGES
CURRENT STATE ARCHITECTURE
ROADMAP
‘ A N C H O R M O D E L S ’
People, Process, Information, Technology
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CAPABILITY INCREMENTS
Capability Maturity Uplift is often Delivered in Multiple Increments
C A P A B I L I T Y
C A P A B I L I T Y I N C R E M E N T
Individual
Collective Training
Professional Development
Concepts
Business Processes
Information Management
Infrastructure
Information Technology
Equipment
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ANATOMY OF A ROADMAP
STRATEGIC CONTEXT
STRATEGIC OB J ECTIVES CHANGE D RIVERS
ARCHITECTURE P R INCIP LES
TARGET STATE
STRATEGIC IN IT IAT IVES
CURRENT STATE
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HOW: EXECUTING BUSINESS ARCHITECTURE
Applied Business Architecture Training Course – Four Days
IDENTIFYGOALS
& OBJECTIVES
UNDERSTAND BUSINESS MOTIVATION
PROTOTYPE BUSINESS MODELSTRATEGIES
DEFINECAPABILITIES
ASSESSCAPABILITIESMATURITY
DEFINE FUTURESTATE CAPABILITIESMATURITY
ASSESS CURRENT PROJECTACTIVITY
PLAN TRANSITION
DEFINE VALUE CHAINCOMPONENTS
WO
RK
S
TR
EA
MS
PROBLEM DEFINITION
BUSINESS SCENARIOS
OU
TP
UT
S
MEANS TO END
BUSINESS MOTIVATION
MODEL
BUSINESS MODEL CANVAS
A VALUE SYSTEM MODEL
A VALUE CHAIN
CAPABILITY MODEL
STRATEGIC OVERLAY
CAPABILITY MODEL WITH
CURRENT MATURITY OVERLAY
CAPABILITY MODEL WITH
TARGET MATURITY OVERLAY
CAPABILITY MODEL WITH
PROJECT OVERLAY
MATURITY, IMPACT AND IN-FLIGHT
MATRIX AND DEVELOP THE
QUADRANT GRAPHS
CAPABILITY MODEL WITH
HOTSPOT OVERLAY
SEQUENCING MATRIX
TRANSITION PLAN
SUMMARIZED ROADMAP VIEW
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RECAP
Business Architecture provides the link between Strategy and Implementation.
Business Capabilities are an essential tool to help us to look at the Business agnostically, speak a common language and understand our strengths and weaknesses in relation to strategy.
Linking programmes and projects to Business Motivation (via Capabilities) provides traceability from strategy to implementation.
Business Architecture Key Points