Understanding business architecture
Description
Business Architecture has seen rapid adoption in recent years, but while the discipline of Business Architecture is still maturing there is a lack of clarity around exactly what Business Architecture is, and the role of a Business Architect. This presentation will discuss the purpose and value of Business Architecture as a strategic discipline, its relation to the ‘technical’ aspects of Enterprise Architecture and will also explore some of the key techniques used to design business models.
Transcript
V 3 . 4 O C T O B E R 2 0 1 5
D A V I D O ‘ H A R A
P R A C T I C E D I R E C T O R , E M E A
FromHereOn is an Enterprise Design consultancy. Our
experience comes from large scale enterprise
transformation initiatives, working with leaders of
the world’s largest organizations.
We take a human-centered approach to achieve greater
efficiency and more valued experiences for both
customers and staff.
FromHereOn is a specialist Enterprise Design firm.
» 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.
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
INFLUENCERS
ASSESSMENT
MEANS ENDS
MACRO
ENVIRONMENT
INDUSTRY
SCAN
SWOT
PERFORMANCE
• Financial
• Customer
• Internal (current)
• Internal (long-term)
C R E A T I N G C L O S E A L I G N M E N T B E T W E E N
B U S I N E S S G O A L S A N D I T S T R A T E G Y
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
IMPLEMENTATION
STRATEGY
BUSINESS
ARCHITECTURE
IMPLEMENTATION
STRATEGY
BUSINESS
ARCHITECTURE
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?
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
Capability driven architectures are designed
to support the strategic objectives of an
organisation.
MISSION
STRATEGIES
TACTICS
VISION
GOALS
OBJECTIVES OUTCOME
CAPABILITY
People
Process
Technology
Information
Capabilities consist of people, process,
Information and technology
To fully understand a capability all these
components must exist regardless of
their maturity level
An ability that an organisation, person, or
system possesses. Capabilities are
typically expressed in general and high-
level terms and typically require a
combination of organisation, people,
processes, and technology to achieve. For
example, marketing, customer contact, or
outbound telemarketing
The power or ability to do something
Measure of the ability of an entity
(department, organisation, person,
system) to achieve its objectives, specially
in relation to its overall mission
The ability to perform or achieve certain
actions or outcomes through a set of
controllable and measurable faculties,
features, functions, processes, or services
All enterprises have
‘capabilities’: they are what the
enterprise must be able to DO
in order to fulfil its mission
Capabilities are expressed as
outcomes and should be
agnostic of technology, product,
organisational unit, etc.
Capabilities will tend to persist
over time
Capabilities can be described in
a simple one-page view… 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
» Commodity vs. Differentiating
Capabilities
» Strategic importance
» Current / target Maturity levels
and gaps
» Pain Points
» Projects
» Map Capabilities to Applications
» Etc…
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
Management
ProcessPeople 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
“What are the changes between the
current state and the future state of
the architecture?”
“How are my strategic objectives being
realised 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?”
Coherence: technology change initiatives
will also impact the People & 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
Motivation
Business
Model
Capability
Model
Target
Architecture
Maturity &
Gaps
Work
Packages
Current State
Architecture
Work
Packages
Work
Packages
MOTIVATION
BUSINESS
MODEL
CAPABILITY
MODEL
TARGET
ARCHITECTURE
MATURITY &
GAPS
WORK
PACKAGES
CURRENT STATE
ARCHITECTURE
ROADMAP
‘ A N C H O R M O D E L S ’
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
STRATEGIC
CONTEXT
STRATEGIC
OB JECTIVES CHANGE D RIVERS
ARCHITECTURE
P RINCIP LES
TARGET STATE
STRATEGIC INITIATIVES
CURRENT
STATE
For IT People
Identify what is of business value, and
how technology can help realise that
value
New method and tools to put
in my professional toolkit
For Business People
Apply architecture thinking to business
planning and strategy: define an
Enterprise Roadmap
For Training Enquiries Contact:
Training@EnterpriseArchitects.com
Quote ABA2015 for a 15% discount
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
WORK
STREAMS
ACTIVITIES
Develop prototype
strategic business
models
HOW
» Applied Business Architecture Training Course – Four Days
PROBLEM DEFINITION
BUSINESS SCENARIOS
OUTPUTS
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
SUMMARISED
ROADMAP VIEW
Business Architecture Course Outputs
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
Business Architecture provides the link between
Strategy and Implementation
Linking programmes and projects to Business
Motivation (via Capabilities) provides traceability
from strategy to implementation
N E W Y O R K
Hello-NYC@FromHereOn.com
L O N D O N
Hello-London@FromHereOn.com FROMHEREON.COM
david.ohara@fromhereon.com training@enterprisearchitects.com
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