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

http://www.fromhereon.com/

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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)


N/A N/AN/A N/A

Low-Medium

Maturity

(Developing)


N/A N/AN/A N/A

Medium

Maturity

(Repeatable)


N/A N/AN/A N/A

Medium-High

Maturity

(Defined/

Managed)


N/A N/AN/A N/A

High Maturity

(Optimised)


N/A N/AN/A N/A

Maturity

Unknown (Not

Assessed)


N/A N/AN/A N/A

Marketing


N/A N/AN/A N/A

Customer Service


N/A N/AN/A N/A

Business Development & Sales


N/A N/AN/A N/A

Client Development


N/A N/AN/A N/A

Product Manufacturing & Maintenance


N/A N/AN/A N/A

Product Service


N/A N/AN/A N/A

Operations Management


N/A N/AN/A N/A

Strategy & Execution


N/A N/AN/A N/A

Finance & Actuarial


N/A N/AN/A N/A

Human Resource Management


N/A N/AN/A N/A

Information Technology Management


N/A N/AN/A N/A

Underwriting and Risk Management


N/A N/AN/A N/A

Legal & Compliance


N/A N/AN/A N/A

External Relationship Management


N/A N/AN/A N/A

Performance Management


N/A N/AN/A N/A

Value Transaction Management


N/A N/AN/A N/A

Process Execution


N/A N/AN/A N/A

Document Management


N/A N/AN/A N/A

Resource Allocation


N/A N/AN/A N/A

Business Process Management


N/A N/AN/A N/A

Knowledge Management


N/A N/AN/A N/A

Decisional & Business

Intelligence


N/A N/AN/A N/A

Premium Management


N/A N/AN/A N/A

Payments Management


N/A N/AN/A N/A

New Business


N/A N/AN/A N/A

Underwriting


N/A N/AN/A N/A

Policy Owner Service (POS)


N/A N/AN/A N/A

Recurring Claims

Management


N/A N/AN/A N/A

Policy Administration


N/A N/AN/A N/A

Consolidated Reporting


N/A N/AN/A N/A

Lump Sum Claims

Management


N/A N/AN/A N/A

Delivery Method Registration


N/A N/AN/A N/A

Claims Management


N/A N/AN/A N/A

Enquiries


N/A N/AN/A N/A

Complaints Management


N/A N/AN/A N/A

Retention


N/A N/AN/A N/A

On-boarding


N/A N/AN/A N/A

Adviser Remuneration


N/A N/AN/A N/A

Leads Generation


N/A N/AN/A N/A

Leads Management


N/A N/AN/A N/A

Broker Management


N/A N/AN/A N/A

Needs Analysis


N/A N/AN/A N/A

Product Selection


N/A N/AN/A N/A

Quotation & Illustration


N/A N/AN/A N/A

Strategic Pipeline


N/A N/AN/A N/A

Tactical Pipeline


N/A N/AN/A N/A

Policy Acquisition


N/A N/AN/A N/A

Application


N/A N/AN/A N/A

Tenders


N/A N/AN/A N/A

Specialist Training


N/A N/AN/A N/A

Client Servicing


N/A N/AN/A N/A

Partner Strategy & Support


N/A N/AN/A N/A

Renewals


N/A N/AN/A N/A

Consulting


N/A N/AN/A N/A

Dealership Relationship

Management


N/A N/AN/A N/A

Sponsorship


N/A N/AN/A N/A

Client Communications


N/A N/AN/A N/A

Adviser Relationship

Management


N/A N/AN/A N/A

Product Research


N/A N/AN/A N/A

Product Development


N/A N/AN/A N/A

Pricing


N/A N/AN/A N/A

Product Management


N/A N/AN/A N/A

Product Packaging


N/A N/AN/A N/A

Reinsurance


N/A N/AN/A N/A

Market & Data Analytics


N/A N/AN/A N/A

Campaign Management


N/A N/AN/A N/A

Product Launch


N/A N/AN/A N/A

External Market

Communications


N/A N/AN/A N/A

Brand Management


N/A N/AN/A N/A

Promotions


N/A N/AN/A N/A

Advertising


N/A N/AN/A N/A

Internal Sales Tools


N/A N/AN/A N/A

Channel Marketing


N/A N/AN/A N/A

Operational Performance

Management


N/A N/AN/A N/A

Operations Quality Management


N/A N/AN/A N/A

Technical Operations Training


N/A N/AN/A N/A

Employee

Development &

Training


N/A N/AN/A N/A

Employee

Retention


N/A N/AN/A N/A

Talent

Recruitment and

Sourcing


N/A N/AN/A N/A

Candidate

Assessment

and Selection


N/A N/AN/A N/A

Succession

Planning


N/A N/AN/A N/A

Talent

Development &

Training


N/A N/AN/A N/A

Employment

Offers &

Contracts


N/A N/AN/A N/A

Government &

Industry

Relationship

ManagementProcessPeople Info. Tech.

N/A N/AN/A N/A

Employee

Performance

Management


N/A N/AN/A N/A

Workforce

Planning


N/A N/AN/A N/A

Talent

Redeployment

& Retirement


N/A N/AN/A N/A

Regulatory

Relationship

Management


N/A N/AN/A N/A

Directors

Relationship

Management


N/A N/AN/A N/A

Legal & Ethical

Management


N/A N/AN/A N/A

External

Administration

Management


N/A N/AN/A N/A

Investor

Relationship

Management


N/A N/AN/A N/A

Public Relations

Management


N/A N/AN/A N/A

Product/

Channels

Profitability


N/A N/AN/A N/A

Management

Reporting


N/A N/AN/A N/A

Corporate Risk

Management


N/A N/AN/A N/A

Underwriting


N/A N/AN/A N/A

Business

Continuity

Management


N/A N/AN/A N/A

Internal Audit


N/A N/AN/A N/A

Reinsurance


N/A N/AN/A N/A

Company

Secretary


N/A N/AN/A N/A

Due Diligence


N/A N/AN/A N/A

Advice

Provisioning


N/A N/AN/A N/A

Compliance


N/A N/AN/A N/A

Contract

Management


N/A N/AN/A N/A

Architecture

Management


N/A N/AN/A N/A

Application

Development


N/A N/AN/A N/A

IT Service

Delivery


N/A N/AN/A N/A

IT Security &

Risk

Management


N/A N/AN/A N/A

Disaster

Recovery


N/A N/AN/A N/A

IT Vendor

Relationship

Management


N/A N/AN/A N/A

Process

Execution


N/A N/AN/A N/A

Infrastructure


N/A N/AN/A N/A

Investment


N/A N/AN/A N/A

Financial

Accounting


N/A N/AN/A N/A

Financial

Management &

Analysis


N/A N/AN/A N/A

Procurement

Management


N/A N/AN/A N/A

Actuarial


N/A N/AN/A N/A

Statutory &

Regulatory

Reporting


N/A N/AN/A N/A

Capital

Management


N/A N/AN/A N/A

Facilities

Management


N/A N/AN/A N/A

Cash

Management


N/A N/AN/A N/A

Strategy

Research


N/A N/AN/A N/A

Project Portfolio

Selection


N/A N/AN/A N/A

Benefits

Realisation


N/A N/AN/A N/A

Government

Policy


N/A N/AN/A N/A

Strategy

Management


N/A N/AN/A N/A

Project

Execution


N/A N/AN/A N/A

Enterprise

Architecture


N/A N/AN/A N/A

Strategy

Planning


N/A N/AN/A N/A

Project Portfolio

Prioritisation


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


TARGET MATURITY OVERLAY


PROJECT OVERLAY

MATURITY, IMPACT AND IN-FLIGHT

MATRIX AND DEVELOP THE

QUADRANT GRAPHS


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

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