Embracing the Actionable: Business Architecture

Enterprise architecture is a relatively new discipline within IT and even newer within traditional business management paradigms. Studies show that EA wasn’t widely practiced as a formal function by most companies until early 2000 (75 percent of all EA programs are less than six years old¹).

In the relatively brief existence of the EA discipline, considerable progress has been made. Leveraging existing concepts of business management and IT management and structuring them in a harmonized manner has enabled EA as a discipline to mature quickly. Companies that embrace the enterprise architecture discipline have also moved quickly in business maturity.

Since the early days of EA, business architecture concepts have shared their place in enterprise architecture frameworks with information and technology related architectures. However, while a few remained fervent in furthering business architecture, broad interest in business architecture waned quickly. The resurgence of interest in business architecture is due in large part to current economic conditions. These conditions have made organizations recognize that they need to drive operating costs down in order to survive. At the same time, they need to strive for growth in order to remain competitive.

Shrewd EA programs are advocating business architecture as a way to tackle these seemingly competing goals, and business executives are listening. While we have their attention, we must make sure they are provided an approach to business architecture that is pragmatic and grounded in reality—an actionable business architecture. The actionable business architecture ensures that business architecture concepts are truly grounded in reality, are actionable, provide value, and resonate with all business units.

The Business Architecture Model

Figure 1 represents the Business Architecture Model. Where a framework is a higher level basic conceptual structure of related things, the model is a pattern of things that can be repeated to achieve a desired result. In other words, the model simply represents an actionable approach, or pattern, for delivering on the conceptual framework.

In general, the model in the figure 1 illustrates how analysis of key components of any business drives creation of business strategy. Too often, organizations build their business strategy solely on basic demographic, market, or corporate performance data—or even worse, on intuition. While all of these are critical drivers for a business strategy, development of a business strategy (or strategies) should always be driven by a clear understanding of inherent strengths or weaknesses of business capabilities, processes, and key components of organization structure and their related drivers and influencers. The strategy then drives the creation of projects and initiatives that are structured to realize the strategy. This article explores each of the components of the business architecture model and outlines a brief actionable approach to delivering business architecture to your executives.

Business Capabilities

There are many definitions of business capabilities—generally speaking, business capabilities are the functions that deliver demonstrable business value to an enterprise. They represent the abilities, talents, or capacities of an organization. They further represent what the enterprise does (or needs to do) in order to fulfill its strategic objectives and responsibilities, near-term and long-term. Business capabilities can often be represented as a hierarchy but is usually only two to three levels deep. As you get deeper, what are thought to be capabilities are actually activities, which are better represented in business processes.

Analysis of the maturity, ability to deliver, and importance of business capabilities as well as gaps and overlaps in capabilities helps define business strategy. Drivers and influencers may introduce change to business capabilities, which in turn may alter the business strategy. While the Business Architecture Model is a relationship model, development and analysis of business capabilities is the best place to start. As you develop the other components of the model, you will always want to tie them back to the related business capabilities.

The Actionable Approach

1. Select a business unit with which to work that is experiencing known problems or issues. This will allow for a quick win and provide the highest initial value.
2. Begin working sessions to identify the unit’s business capabilities. Note: your business partners will tend to be verbose when trying to identify their capabilities. Don’t try to fit them into the common “noun/verb” mold; take their verbose explanation and translate it into a capability statement for them. For example, if you were to select Human Resources, they may state a capability as “We require the ability to create, manage, and communicate benefits packages for employees.” You could equate that to a capability statement of “Benefits Administration.”
3. Begin analysis by assessing the maturity of each capability within the organization, the ability of that organization to deliver the capability (readiness), and the relative importance/value of the capability to the organization. This information will drive a final score; this can easily be documented in a simple capability matrix.
4. Plot the final score on a capability heat map. This is a great visual for your business partner to quickly identify the areas that require focus.
5. Establish a plan to address the identified weaknesses and gaps and to maintain areas of strength. This can be a simple timeline, project plan style, or swim lane chart. This activity will be used to inform your business strategy and resulting projects and initiatives.

Business Processes

There are some who believe that business architecture is the practice of documenting and analyzing business processes—traditional business process engineering efforts. The Business Architecture Model shows that, while business processes is a key component, it is one of several components that make up business architecture.

Business processes are a collection of related, structured activities or tasks that produce a specific service or product. Analysis of business processes allows you to understand your value streams, which are a sequence of activities required to design, produce, and provide goods or services to a customer, along with information, materials, and workflows. Analysis of the business processes’ efficiency, effectiveness, and alignment with business capabilities helps define business strategy.

The Actionable Approach

There are many tools and techniques, too numerous to identify here, to aid in documenting and analyzing your business processes, which makes it fairly mature in the industry. There are standard process development tools, notation standards, etc. that are well established and can be easily obtained. Additionally, there is process reengineering or process output quality methods such as Six Sigma—these too are well established and readily available. A useful addition to the existing tools and methods is business process to business capability mapping. This is important to delivering business processes analysis in the context of business architecture and using business process development to aid in impact analysis such as the impact of a regulatory mandate.

The business process to business capability mapping is achieved through a simple matrix. Additionally, it shows a designation whether the activity produces goods or services to your customers. While this is not a tool to define and document your value streams, this will help collect value stream data and correlate them to capabilities. The purpose of this matrix is to be able to quickly identify impact, at the activity level, of changing a capability. Moreover, it highlights whether that change affects your value streams, which is critically important because value stream activities are customer facing. As stated earlier, when assessing the capabilities, you will find weaknesses, gaps to be filled, and areas of strength that require maintenance plans. The matrix will allow you to quickly identify the business processes that are affected and if they are in the value stream. Through this analysis, you can easily prioritize your efforts to drive the highest value and impact of your business architecture efforts.

Organization Structure

Note: we’re not saying “organizational” structure. The organization structure, sometimes referred to as the “business delivery system,” provides the mechanisms to deliver the business capabilities, processes, and strategy. Organization structure includes not only the hierarchy of staff and staffing models, but the financial strength, business velocity, competitive analysis, and other traditional business management paradigms. In organization structure, we need to clearly understand the business context, defined by Gartner as “the articulation of the business strategy and its future implications. It also evaluates the environmental trends (such as regulatory requirements, market trends or technology trends) . . .”² In that way, organization structure informs the business strategy but may also be impacted by business strategy.

As the components of the organization structure inform the business strategy, organizational readiness is assessed to ensure that the company is ready to deliver on strategies, capabilities, mergers and acquisitions, projects, initiatives, and so on.

The Actionable Approach

The tools in this area are too numerous to outline here; some are simple while others are complex. Any way you measure and analyze your business using the wide variety of tools can be considered part of the practice of business architecture. But it’s only when you understand each of these measures in the context of the others that you are really architecting your business.

There are common tools available to help document and analyze staffing models, financial strength, market conditions, business context, and organizational readiness. Follow these simple steps:

1. Identify tools already being used by your business partners in the various business units.
2. Working with them, incorporate these tools into your business architecture and expand them to include defined relationships to business capabilities and business processes. When this is done, you will be able to understand the full impact of change as it is introduced into your organization.
3. Where gaps in tools are discovered, identify tools necessary to fill the gap.

This is a great time to get an in-depth knowledge of how your business partners understand and analyze their business function. You can add value by helping align their business function with the others in your company.

Business Strategy

The axiom in EA that “design is doing things right and architecture is doing the right things” applies to business strategy. Where individual business unit plans are all about doing things right, our business strategy is purposed to do the right things. The business strategy outlines a set of goals, and often a road map to get there, to encourage positive behavior in the company and ensure that we keep focused on the right things. The business strategy is typically an umbrella strategy that is comprised of several business or operating unit business strategies. It is a two- to five-year road map to accomplish a set of goals but often consists of several shorter-term (one-year) strategies.

The axiom in EA that "design is doing things right and
architecture is doing the right things"applies to business strategy

The Actionable Approach

The business strategy should be something simple that all employees in the company can embrace and help them direct their day-to-day activities and behavior. How we arrive at our business strategy can be better informed using a business architecture approach.

The business strategy must be derived from analysis of capabilities, processes, and organizational structure and a clear linkage should be provided.

The business strategy should be comprised of individual business unit strategies. The business architecture team will help harmonize the individual strategies into one corporate business strategy.

Your business strategies must have measures of success to ensure performance.

Projects and Initiatives

Too many times, a project is created without a clearly defined purpose—they are solutions looking for a problem. Projects and initiatives are intended to provide a structured approach to fulfilling the business strategy. Since projects are temporary endeavors with a clearly defined beginning, middle, and end, they are not strategic in nature. While they may fulfill a strategic goal, they are tactical efforts and therefore an outcome of strategy not strategy itself. This is an important concept because it helps put things in the right order; business strategy, through the analysis of strengths and weaknesses in your business capabilities, business processes, and organization structure, should always be the driver for the creation of projects and initiatives.

The Actionable Approach

Definition and delivery of projects and initiatives is one of the most standardized components of this Business Architecture Model. The Project Management Institute has a body of knowledge and certification process to ensure consistent application of the standards. The UK’s PRINCE2 also has a standardized approach to project management. You can apply a couple of simple techniques to help tie these methodologies into your business architecture:

1. The business case should be expanded to include alignment with, impact on, and addition of business capabilities. Projects should always align with business processes and business capabilities and demonstrate filling or improving capability gaps.
2. Requirements definition should be a delta based activity. Begin linking business requirements to your business process activities. Then, instead of starting from scratch each time you begin requirements definition, you will evaluate only the requirements that need change. Requirements that don’t change are simply added to the requirements list. The business process/capability matrix will help you understand impact at the process level or capability level of a change to a requirement.
3. Include organizational readiness assessments to your project initiation activities. This includes a breakdown of people, process, and technology and the degree of readiness of the capabilities the project delivers in each of these areas.

Bringing it all together

As you can see, business architecture has a broad array of components and tools. However, a simple approach utilizing some basic tools can help jump start your business architecture efforts. There are myriad business tools and approaches that can be leveraged in the practice of business architecture including: Lean, Six-Sigma, Demming Quality System, Common Requirements Vision, Balanced Scorecard, and many others. All of the approaches outlined here are consistent with these tools and approaches and are intended to enhance them. You can actually impede progress of your business architecture by adding too many tools too quickly. It can overly complicate the process and disaffect your business partners. While you mature your business architecture program, using some of the simple tools outlined here, you will have immediate high value deliverables. You can take the time while you mature your program to increase your skills with some of the industry standard tools and methods to be ready when your business partners move forward to grow your program.

Finally, figure 2 shows a summary view of the relationships among the components of an enterprise architecture. While this is a discussion of business architecture and not all components of an enterprise architecture, it is worth a brief mention of the relationships of these components. The figure shows intersections between the components to highlight how they can be related. The intersection of technology architecture and information architecture, for example, is data; data represents the raw data from a technical perspective, and information provides meaning to data from a business perspective. Even though there is a fundamental difference between information and data, they share a symbiotic relationship. Information cannot exist without data, and data is most useful when it is turned into information. Business architecture relates to information and technology architectures in a similar manner, through business capabilities and business processes. Where it all comes together, the nexus of all components of enterprise architecture is business strategy.

By mapping your information architecture and technology architecture components to your business architecture, you will begin to realize the true impact of change to your enterprise and be able to develop a sound business strategy. This can be accomplished, for example, by a mapping of information flows to business capabilities and business processes and by mapping business applications to business capabilities and business processes. Mapping all of the components of your enterprise architecture (business, information, and technology) will enable you to visualize your enterprise and architect your business for success.

1. Corporate Executive Board, enterprise architecture Executive Council, EA Maturity Accelerator Diagnostic Report, June 2008.

2. "Introducing the Business Context," Gartner Inc., Document ID Number: G00144386.

by Mark Griffith, the director of enterprise architecture for BlueCross and BlueShield of North Carolina. He can be reached at mw_griffith@yahoo.com