Business architecture breakfast briefing uk v1 1 0

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BUSINESS ARCHITECTURE BREAKFAST BRIEFING 1 The design of business using business architecture UNDERSTANDING BUSINESS ARCHITECTURE PRESENTED BY: David O’Hara Principal Consultant, EMEA

description

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

Page 1: 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

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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.

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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

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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.

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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

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Implementation

Strategy

Positioning Business Architecture

Business Architecture must connect strategy to business and IT change

Business Architecture

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DIS

TION

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What have these brands got to do with disruption?

What is disruption?

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‘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…

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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?

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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

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Vision

&

Mission

Design

Thinking

Business

Outcomes

Value

Systems

Innovation

Systems

Thinking

Coherence

Business

Model

Prototyping

Capabilities

Visualisation

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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

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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

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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

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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

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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

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How do we Communicate Strategy?

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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?

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What needs to be done?

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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

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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’

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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

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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

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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

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“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

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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

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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

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Our Courses

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› 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)

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Questions?