What is Business Architecture? … BriefingsDirect podcast

A very nice introduction to the role of Business Architecture in the form of a BriefingsDirect podcast from February 4th 2010 titled Business Architecture helps Business and IT Leaders decide on and communicate changes at the new speed of business – the transcript can be found here. BriefingsDirect is a blog/podcast moderated by Dana Gardner, Principle Analyst at Interarbor Solutions.

In this podcast, Gardner interviews Tim Westbrock, Managing Director of EAdirections from the Open Group’s Enterprise Architecture Practitioners Conference in Seattle, the week of Feb. 1, 2010.

Following are a few excerpts from the interview.

What is Business Architecture?

Dana Gardner: How do you define BA?

Tim Westbrook: Well, the premise of my discussion today is that, in order for EA to maintain and continue to evolve, we have to go outside the domain of IT. Hence, the conversation about BA. To me, BA is an intrinsic component of EA, but what most people really perform in most organizations that I see is IT architecture.

A real business-owned enterprise business architecture and enterprise information architecture are really the differentiating factors for me. … To me enterprise business architecture is a set of artifacts and methods that helps business leaders make decisions about direction and communicate the changes that are required in order to achieve that vision.

Focus on capabilities

Westbrook: We really need to focus the conversation on capabilities. Part of my presentation talked about deriving capabilities as the next layer of abstraction down from business strategy, business outcomes, and business objectives. It’s a more finite discussion of the real changes that have to happen in an organization, to the channel, to the marketing approach, to the skill mix, and to the compensation. They’re real things that have to change for an organization to achieve its strategies.

In IT architecture, we talk about the changes in the systems. What are the changes in the data? What are the changes in the infrastructure? Those are capabilities that need to change as well. But, we don’t need to talk about the details of that. We need to understand the capabilities that the business requires. So, we talk to folks a lot about understanding capabilities and deriving them from business direction.

Business Speed/Agility

Gardner: It seems to me that, over the past 20 or 30 years, the pace of IT technological change was very rapid — business change, not so much. But now, it seems as if the technology change is not quite as fast, but the business change is. Is that a fair characterization?

Westbrock: It’s unbelievably fast now. It amazes me when I come across an organization now that’s surviving and they can’t get a new product out the door in less than a year — 18 months, 24 months. How in a world are they responding to what their customers are looking for, if it takes that long to get system changes products out the door?
BA is a means by which we can engage as IT professionals with the business leadership, the business decision-makers who are really deciding how the business is going to change.

We’re looking at organizations trying monthly, every six weeks, every two months, quarterly to get significant product system changes out the door in production. You’ve got to be able to respond that quickly.

On Strategic Capability Change

Gardner: You mentioned something called “strategic capability changes.” Explain that for us?

Westbrock: To me, so many organizations have great vision and strategy. It comes from their leadership. They understand it. They think about it. But, there’s a missing linkage between that vision, that strategy, that direction, and the actual activities that are going on in an organization. Decisions are being made about who to hire, the kinds of projects we decide to invest in, and where we’re going to build our next manufacturing facility. All those are real decisions and real activities that are going on on a daily basis.

This jump from high-level strategy down to tactical daily decision-making and activities is too broad of a gap. So, we talk about strategic capability changes as being the vehicle that folks can use to have that conversation and to bring that discussion down to another level.

When we talk about strategic capability changes, it’s the answer to the question, “What capabilities do we need to change about our enterprise in order to achieve our strategy?” But, that’s a little bit too high level still. So, we help people carve out the specific questions that you would ask about business capability changes, about information capability changes, system, and technology.

In Summary

A nice high-level intro to Business Architecture, and its importance on translating business strategy to operational business capabilities.

glenn

Understanding Business Architecture – IBM’s take …

Introduction

A fantastic overview of state-of-the-art thinking around Business Architecture from IBM. Here’s a link to the Business Architecture page from Wikipedia, but this is a very IT-centric view of Business Architecture, and I much prefer IBM’s more business-centric perspective, which IBM calls Actionable Business Architecture.

Here’s a link to IBM’s Actionable Business Architecture whitepaper from 2009 that explains the approach. And here’s a link to a follow-up webinar from May 2010: Actionable Business Architecture webinar. The slides from the presentation can be downloaded at this link.

Positioning Business Architecture within the Enterprise

IBM positions Business Architecture at the intersection of 3 enterprise disciplines: Strategy and Transformation, Business Process Management (or more broadly, Business Execution), and IT (and most importantly, in the specification and development of Services) – as suggested in the visual below:

IBM’s position is that it is often a challenging task for businesses to execute on business strategy – that is, to make business strategy “actionable”. Business Architecture is the discipline that makes a Business Strategy “actionable” by developing formal models that translate Business Strategy into a Business Operating Model, and various IT Models that map Business Capabilities onto IT components. This is illustrated (sort of) in the teeny-weeny diagram below:

Err, what’s with the models?

Sure. By model, we mean a formal description of the important elements of that domain. It might be largely textual description – for example a Business Strategy document – or it may take the form of formal models, such as business process models or service models. IBM illustrates this concept in the visual below:

For example, IBM describes the Strategy Model as follows:

The strategy model includes the vision, mission, goals, policies and commitments the enterprise develops, commonly classified under business intent or motivation. In addition, the business strategy represents the way different stakeholders intervene in the overall direction of the organization, such as customers, employees, suppliers and partnerships. Finally, the strategy model includes value propositions from the enterprise to the society (services and products), including revenue model and
pricing strategy.

IBM describes the Business Operating Model as follows:

In order to develop an integrated perspective of the operating model of the enterprise, many different views are typically created.

Capabilities and competencies describe the boundaries of primary business functions and thus, are intimately connected to the pieces of the organization that perform those functions, as well as resources and skills that generate competitive advantage in support of the business strategy. Enterprise-wide results are generally impacted by business processes. This view in Business Architecture defines the set of interaction/coordination and learning and transformation processes that transcend functional and organizational boundaries. The processes also describe which people, resources, business rules
and controls are involved.

Performance is another critical view of business operations and is normally connected to other elements of the enterprise using aligned Key Performance Indicators (KPI). Hence the performance of core business processes measured against KPIs has a direct impact on the way the enterprise reaches its financial targets and tactical goals.

Businesses typically just view their operating model primarily through the business process perspective. However, by also viewing the operating model through a business componentization perspective, additional insights can be gained. Business components facilitate the analysis of operations, including the way capabilities participate in building tangible outcomes that are used in support of the revenue model, or value propositions in the case of government or non-profit organizations. This modularization assists in the architecting of dependencies across the enterprise and between the business and its different ecosystems.

And finally, a brief explanation of the IT Model:

The information technology model, as described earlier, is intimately connected to the rest of the Business Architecture dimensions. The pervasive leverage of IT within all aspects of the business and its operations makes it a critical part of Business Architecture. Process segments are automated and enabled through IT systems, while the specifics of business functions and capabilities are implemented and delivered through IT systems. With the increasing adoption of service orientation at a business level, establishing service oriented IT architectures and operations is also becoming more and more prevalent.

In summary then, IBM summarizes the role of Business Architecture as follows:

Therefore, Business Architecture, at its core, has elements and connections to ensure that the strategic intent of the business is effectively executed – at the operational level through its business processes, and supported and enabled by the various IT systems.

METHOD in the madness – making BA “actionable”

The key to making Business Architecture “actionable” is the methods, artifacts, tools, and metrics that make BA a formal discipline, as illustrated by the visual below.

Of course, this is also where IBM has some secret sauce it would like to sell you. But the point is a crucial one – Business Architecture should define a formal set of methods and models that build on one another to design and implement the Business Operating Model and underlying IT Architecture that operationalizes Business Strategy.

Business Architecture – a business or IT discipline?

Traditionally, Business Architecture has been positioned squarely within the context of Enterprise Architecture. However, this can present some challenges, as highlighted by the slide below.

IBM’s response to these challenges is to view Business Architecture as both an integral part of, yet distinct from, Enterprise Architecture. As they explain in the whitepaper:

Actionable Business Architecture can and should be developed as part of every EA initiative, and at the same time Actionable Business Architecture can be executed independently of EA. Actionable Business Architecture is an instantiation of Business Architecture realized through the application of specific and prescriptive approaches, techniques and tools.

An understanding of Business Architecture at a conceptual level is necessary but not sufficient for execution; however, gaining a deeper understanding is essential for success. This is achieved through the development of Actionable Business Architecture from the practical perspectives of strategy and transformation, business process management and service oriented architecture. Complementing this is a contextual point of view offered through the EA perspective.

That is, Business Architecture must be described in a way that’s “actionable” to the Enterprise Architecture. And this “actionable” definition must come from close involvement and alignment to Strategy and Transformation efforts, and the definition of a Business Operating Model.

Business Architecture – inter-connecting and aligning Business and IT perspectives

There are several slides in the presentation that depict how Business Architecture can interconnect and align key domains in the enterprise. An overview slide is provided here:

The following slide illustrates the linkages between the Strategy and Business Operations domains:

And finally the following slide suggests the linkage from Strategy through the Business Operating Model (here described as Business Processes) down into Services and application Component specification and delivery:

In Summary …

So in summary, that’s basically IBM’s vision for business architecture. The presentation goes on to describe how to get started developing an Actionable Business Architecture, and presents some specific artifacts or models associated with various viewpoints. But the gist of what Business Architecture actually is, and its benefit to business/IT alignment, is pretty much covered above.

If you enjoyed the IBM whitepaper and presentation on Actionable Business Architecture, you may also enjoy their white paper on Achieving Business Agility with SOA and BPM together, from October 2009. Their is also a webinar which supplements the whitepaper that can be viewed here.

Well, that’s about that. 🙂

glenn

The role of Architecture in the Enterprise

This will be the first of several posts which explore the role of Architecture in the Enterprise.

What is Architecture?

Well, first of all, let’s level set on the meaning of architecture. Architecture – in the engineering sense – is basically about describing the key elements or components of a system, and how they relate with one another. Architecture is about capturing “the essential shape of the thing”.

Architectures are described by multiple viewpoints

A key tenet of Architecture is that no single view or picture can ever describe the totality of a complex system or organization. Rather, multiple viewpoints are required to capture the
various “aspects” or “dimensions” of a complex system.

Enterprise Architecture

The discipline that has emerged to formally model the business and technology domains of an enterprise is called Enterprise Architecture. Enterprise Architecture attempts to formally model key viewpoints in both the business and technology domains, and to ensure that that IT solutions are aligned to business strategies and operations.

Here is an example from a common EA development methodology called TOGAF, which presents some of the key viewpoints in both the business and technology domains:

Business Operating Models

A particularly important model for representing business architecture is that of the business operating model. I have blogged about this concept previously, and will have more to say in future posts.

So what. What should I care?

Given the complexity of modern IT systems, and the business’s dependency on information technology, the capability of a business to execute on its strategy is critically dependent on the formal design of a business operating model, and the underlying IT architecture that supports the business operating model.

Over the next month, I’ll have lots more to say about Architecture in the Enterprise – both Business and Technology architecture. So if you’re interested, stay tuned.

glenn

My Favorite Business Architecture book

Just want to write a quick post on a topic near-and-dear to my heart – Business Architecture. A couple years back, I read a book written in 2006 by MIT Sloan School of Management authors Jeane Ross and Peter Weill (as well as David Robertson) – who also wrote the standand text on IT Governance – titled Enterprise Architecture as Strategy: A Foundation for Business Execution.

Well, this was a great book, because for my it introduced the notion of a Business Operating Model. A Business Operating Model is important for several key reasons: (i) it provides a formal model for translating business strategy into execution, and (ii) it focuses on end-to-end view and integration of core business processes, (iii) it necessarily defines key business capabilities that must be implemented in the underlying IT architecture.

Ross and Weill’s book focuses more on how a busines operating model varies along two key dimensions – the degree of “integration” and the degree of “standardization”. Their framework is presented in the slide below:

To discuss one of the 4 operating models presented above, let’s look at Delta Airlines, and example of a company that has a “Unification”-style Operating model. The following diagrams depicts how Delta’s operating model is implemented as an Enterprise Architecture.



The key Architectural mechanism here is the basically an Enterprise Event Bus, which services as an integration backplane between their front-end and back-end operational systems.

Finally, the book has a wonderful analysis of something the authors call Enterprise Architecture maturity. Ross and Weill’s Architecture Maturity Model is presented below, and it’s basically a story of how a business evolves from a collection of operating silos to an integrated platform of business capabilities.



There are a number of presentations by the authors explaining their ideas. Their findings are backed by extensive research with Fortune 500 companies, so there’s solid imperical evidence for their findings.

Hope this post captures the interest of some of you. Let me know if it does.

Glenn