Gain Advantage: Use Business Architecture

This post was originally published on LinkedIn. My next post will explain how we can apply the principles and ideas of Business Architecture in life. 

Making Sense of Complexity

In Business Architecture — Who Cares? I describe what is becoming a normal situation for large and complex businesses today:

“Many concurrent projects implementing business change
at different speeds,
durations
and with multiple impact points across the Enterprise –
all happening, of course, to achieve goals that are aligned to strategy.

Imagine when there are multiple project portfolios
across geographies,
divisions or business units.

Imagine when the multiple project portfolios
involve not just major systems implementations
but projects on process re-engineering,
incremental process improvements,
strategic re-alignment,
merger and acquisition scenarios,
divestitures,
even a large start-up.”

In the above scenarios, Business Architecture helps make sense of the complexity, accelerates effective decision-making, and provides the ability to consider various future states for use in developing strategy.

What is Business Architecture, again?

Business Architecture refers to the coherent, conceptual and logical representation of the building blocks of how a business operates, where the building blocks are expressed as process, information, people and technology and, together, how these components relate to business strategy and execution.

Leverage Business Architecture To Gain Advantage! Here’s How.

1. Know what and where your business capabilities are.

How can you get to where you want to go if you do not know where you are starting and what capabilities you need to change to get there?

Business Architecture can provide a holistic view of the present-state Enterprise capability, which can also be tailored for specific stakeholders so that they can see how their area of interest relates to the whole.

This means a contextualised visual representation of the current state of the business illustrating process, information, people and technology views of business capabilities, their criticality and level of maturity, and how these business capabilities relate to initiatives, goals and strategy.

2. Know how your business capabilities fit together for the good of the whole.

In this highly connected world, it’s not just about social networks but also the business activities that make up the work day, and how those activities connect (or not) to enable the business to run.

Business Architecture can provide a framework for categorisation of business needs & requirements.When business needs & requirements are mapped to business capabilities, and business capabilities to goals and strategy, the criticality, linkages and dependencies can be illustrated in a more digestible way.

Rather than evaluating individual business requirements in a silo, the Enterprise context is available to facilitate understanding of impact on the whole or other specific areas of the business. 

A “silo view” happens when a business requirement is framed only in terms of an IT system, application or platform, a function, division, geographic location or stakeholder group. 

How many “silo views” do you have to juggle with when facilitating agreement on how business requirements relate to each other?

3. Know what goes where and in what order.

Business Architecture can inform projects portfolio prioritisation and sequencing.

Heat maps or a scoring mechanism can illustrate the relative value (benefits, business criticality, market advantage) of the business capabilities against Enterprise and division / function / business unit goals and strategy. This is a critical input to discussions on business requirements and provides context and big picture view when there are conflicting drivers, timing differences or assigning scarce resources.

How many “silo views” do you have to grapple with to agree on prioritisation and funding of projects?

4. Make informed strategic and operational decisions when you require changes to business capabilities to execute them.

An informed decision is better for managing impact and risk.

An informed decision taking into account business capabilities from an Enterprise view, rather than just function- or business unit-centric, is even better for managing the wider impact and risk, and orchestrating execution. 

For example, a strategic decision from a marketing perspective will factor in the critical business capabilities across the Enterprise needed to execute the decision, not just marketing-related or functionally-adjacent business capabilities. For a company with customers in various countries, the marketing decision may require enhancements to process and systems for managing leads, opportunities and orders and delivering customer service, with impacts on business activities for certain roles.

5. Develop strategy using additional information that describes future views of the Enterprise’s business capabilities.

Business capabilities provide the execution ability for the company.

Isn’t it better to have an idea up-front about how they can be used, enhanced or decommissioned to enable your strategy?

In the same way Business Architecture provides the present-state view of business capabilities, it can also be used to ‘crunch’ a number of future views using a set of agreed business variables and assumptions.

This additional information gives business leaders a sense of what may be required to align their business capabilities for each scenario. The strategy can then be developed depending on the likelihood of the scenario, the business appetite for risk and the capability to deliver and absorb change.

How is Business Architecture used in your organization?

Are your process improvement projects using Business Architecture to understand the consolidated and cumulative impact across the Enterprise?

Is your Business Transformation program using Business Architecture to understand and facilitate agreement on prioritization and sequencing?

How are you managing the overlapping waves of change in your organization?

Share your experience with us about how you’ve utilized Business Architecture.