An Introduction into the design of business using business architecture

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Business Architecture is gaining interest from many non-traditional architecture stakeholders across the enterprise however most remain unclear of its scope and application. This webinar was presented through the Open Group as lead up to the London 2013 Conference on business transformation. It provides an overview of the language, methods and techniques of developing a business architecture and assist architects to demonstrate its relevance to business leaders. It also provides an insight into the method and techniques taught in the "Discovering Business Architecture" course run by Enterprise Architects.

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  • Hi Craig, mate, I really think you need to start have references or citations section in your slide decks. A lot of the material in all the slide decks here has been sourced from Information Technology Practice Enterprise Architecture Executive Council’s 2010 Business Architecture in Practice slide deck specifically the sections where they have mentioned Royal Bank of Scotland I think you owe to it them and your readers to not come across as plagiarising material without citation.
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An Introduction into the design of business using business architecture

  1. 1. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 31 FINALv1.0.2–SEPTEMBER ,2013 PRESENTED BY: CraigMartin-ChiefArchitect, Enterprise Architects An introduction into the design of business using business architecture DISCOVERING BUSINESS ARCHITECTURE
  2. 2. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 32 EA is a leading international provider of strategy and architecture services and capabilities Championing Practice Awareness in the Community • Chief Architect / CTO Round Tables • Virtual Teaming & Practitioner Collaboration • Open Group Participation • Industry Engagement Lifetime Relationship with Practising Architects • Practitioner career lifecycle management • Architecture training and certification • Professional development • Community involvement • PAYG payroll services • Learning forums Skills Uplift for Organisations & Individuals • TOGAF® 9.1 Certification • ArchiMate® 2.0 • Advanced / Applied EA • Business Architecture • Information Governance • Solution Architecture • BPMN Strategic Relationship With Corporate Clients • Strategy & Architecture Capability Improvement • The delivery of strategic architecture outcomes • Architecture delivery Accelerator Frameworks • Resourcing & Talent • Managed Services Learning Services Architect Services Thought Leadership Enterprise Services
  3. 3. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 33 Twitter @eatraining Email craig.martin@enterprisearchitects.com
  4. 4. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 34 Join the discussion FIND US AT: enterprisearchitects.com @enterprisearchs enterprise-architects enterprisearchitects EntArchitectsEA Subscribe to our mailing list
  5. 5. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 35 Utility (Foundation) Innovate Build Advantages Assemble Prolong Advantages Mix Reduce Disadvantages What's business about? DIFFERENTIATION The Building Block Analogy
  6. 6. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 36 The goal of a good business model is to address the advantages and disadvantages in a coherent manner 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
  7. 7. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 37 Finding the Right Business Mixes This entails having a clear understanding of the activities required to move from the mystery space to the algorithm space Unresolved Business Challenges Rules of thumb Robust, repeatable and replicable formulas & processes Ultimately all innovative algorithms will become utility. * From Roger Martin (2009) The Design of Business
  8. 8. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 38 D INTUITIVE THINKING ANALYTICAL THINKING RULES OF THUMB The speed of business change requires a discipline that is able to use the heuristics effectively in order to achieve the desired outcomes 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 Robust, repeatable and replicable processes Unresolved Business Challenges Mystery Mystery Mystery Innovation Heuristics Assembly Heuristics Mixing Heuristics Utility (Foundation)
  9. 9. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 39 The Focus is Moving Upwards What we are finding is that business challenges are moving further up the knowledge funnel. The lower levels are becoming commoditised rapidly and the challenge is for those who can find value in mixing the chunks further up the knowledge funnel * From Roger Martin (2009) The Design of Business › Process Improvement › BPM › Automation. Modules. Components › Value Stream and Cross Functional Capabilities › Capability Based Planning › Optimal Mixes of Resources › Business Model Innovation › Business Model Disruption › M&A PROCEDURAL INSTRUCTION SETS (Fine grained & atomic problems) COMPLEX AND DYNAMIC (Coarse Grained Composite problems) Agility favours those who find the best heuristics
  10. 10. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 310 What we have found in large accounts An ownership gap for business architecture exists - Lines of responsibility around cohesion and business architecture, are often unclear Functional Capabilities Cross-Functional Capabilities EnterpriseCoherency Capabilities Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined Cohesion Mandate Undefined - Enterprise Planning Ownership THE HEURISTICS CHALLENGES
  11. 11. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 311 The Focus is moving Moving unresolved business problems into the utility space is a journey across the complexity space that is supported by both the business architects and business analysts. Business architects therefore have a career path moving into the unresolved business problems space Software Automation Projects Funds investment Widget assembly Credit card approval Inventory Management Outsourcing Projects Major re- design projects Six-sigma based process improvement analysts New Product design Deals with other companies International Delivery On-line purchasing ERP based process improvement Complex Processes, not part of company’s core competency: Outsource Complex, dynamic processes of high value: undertake business process improvement efforts that focus on people Straightforward, static commodity processes: use automated ERP- Type applications and / or outsource Straightforward, static, and valuable: automate to gain efficiency HIGH HIGH LOW LOW Must be done but adds little value to product or services Very important to success, high value added to products and services STRATEGIC IMPORTANCE PROCESSCOMPLEXITYANDDYNAMICS Complex negotiation, design, or decision process Many business rules; expertise involved Some business rules Procedure or simple algorithm Organisation Heuristics Principal Business Architects Business Analysts Strategic Business Architect Senior Business Analysts *Adapted from “Business Process Change” by Paul Harmon The Knowledge Funnel Operates predominantly on this side of the graph Traversing this side of the graph is the job of the business architect
  12. 12. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 312 Business Architecture as a subset of Enterprise Architecture STRATEGY BUSINESS PROCESSES BUSINESS CAPABILITIES DATA INFORMATION ARCHITECTURE  Metadata Management  Knowledge Management  Integrity Management  Usage TECHNOLOGY ARCHITECTURE  Applications and Services  Infrastructure  Integration  Client BUSINESS ARCHITECTURE  Business Drivers  Business Delivery  Business Boundaries Security, risk and SOA are all styles of enterprise architecture. They require the same rigour and discipline of architecture to drive out their respective outcomes.
  13. 13. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 313 Value Mandate E A B C D Responsibility depends upon the mandate from business Value increases when mandate increases. Business Architecture is seen as a positive progression away from IT *Adapted from Ruth Malan, Dana Bredemeyer • Maximise Product Profitability • Maximise Market Share • Maximise Customer Lifetime Value Improve project performance Improve enterprise wide program and portfolio performance Improve Business Performance Improve Market Performance (Shareholder Value) Improve Product/Service Performance
  14. 14. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 314 Top Management Challenges 37% 34% 29% 22% Customer Loyalty Increasing flexibility & speed Reducing Costs Increasing Innovation PERCENTAGE OF CEOS REPORTING COMMON DRIVERS FOR INCREASING BUSINESS FLEXIBILITY 1. Customer demand for quick turnaround and increased need for customisation 2. Shorter decision cycles 3. Increased need for product innovation 4. Globalisation of corporate footprint Current Business Architecture Pressures Aspirational Business Architecture Pressures *Executive Council Survey
  15. 15. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 315 Our Focus for “Discovering Business Architecture” The utility of business architecture needs to be addressed before we can begin to address some of the composite chunks up at the business model innovation and disruption level Functional Capabilities Cross-Functional Capabilities EnterpriseCoherency Capabilities Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined Cohesion Mandate Undefined - Enterprise Planning Ownership
  16. 16. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 316 Governance Model The EA Business Architecture Framework Presenting Business Architecture Outcomes (WHY) Executing Business Architecture (HOW) Organising Business Architecture Content (WHAT) ENGAGEMENT MODEL BUSINESS ARCHITECTURE SERVICES CATALOGUE BUSINESS ARCHITECTURE CAPABILITY MODEL BUSINESS CHANGE MODEL The EA framework for business architecture Business Architecture Skill and Competency
  17. 17. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 317 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: Executing Business Architecture A Business Architecture Method PROBLEM DEFINITION BUSINESS SCENARIOS UTILITY OUTPUTS MEANS TO END BUSINESS MOTIVATION MODEL BUSINESS MODEL CANVAS A VALUE SYSTEM MODEL A VALUE CHAIN CAPABILITY ANCHOR MODEL STRATEGIC OVERLAY CAPABILITY ANCHOR MODEL WITH CURRENT MATURITY OVERLAY CAPABILITY ANCHOR MODEL WITH TARGET MATURITY OVERLAY CAPABILITY ANCHOR MODEL WITH PROJECT OVERLAY MATURITY, IMPACT AND IN-FLIGHT MATRIX AND DEVELOP THE QUADRANT GRAPHS CAPABILITY ANCHOR MODEL WITH HOTSPOT OVERLAY SEQUENCING MATRIX TRANSITIONPLAN SUMMARISED ROADMAP VIEW Discovering Business Architecture Course Outputs
  18. 18. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 318 Developing The Business Architecture Defining a business model requires a number of iterations from macro to micro OPERATIONAL CAPABILITY BUSINESS STRATEGY • The strategy layer articulates the means to achieve the contextual layer • The business layer translates the strategic vision into how value is delivered to the client along various dimensions, including the value chain, products, and channel. • The capability layer expands the conceptual model into detailed business capabilities and describes their inter-relationships and target maturity levels. • The operational layer decomposes the capabilities into specific processes, policies/procedures, organisations, roles and technologies required to enable the business capabilities. MACRO MOTIVATION • The motivation layer articulates the direction, vision, goals and drivers. Relates to the context point identified in the previous module OPERATIONS STRATEGY BUSINESS STRATEGY MICRO
  19. 19. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 319 How is a business represented A business model is expressed in a variety of views depending upon level of abstraction The Business model is described in terms of business motivation and outcomes and is often represented in the form of a business motivation model Various business models produce different outcomes for different scenarios. Developing scenarios for business models is done using the business model canvas At the conceptual level you will develop the detail of the various strategic business models using the EA Business Reference Model with corresponding value chain models The capability layer expands the conceptual business model into detailed business capabilities and describes their inter-relationships and target maturity levels. It is often represented in the business anchor or capability model The operational layer addresses all the resources that are within the capabilities and is found in the more traditional process and functional decomposition models THE BUSINESS MOTIVATION MODEL THE BUSINESS MODEL CANVAS THE VALUE SYSTEM MODEL THE BUSINESS CAPABILITY ANCHOR MODEL NOT ADDRESSEDOPERATIONAL CAPABILITY BUSINESS STRATEGY MOTIVATION
  20. 20. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 320 What is the Business Motivation Model? The language of strategic planning is often inconsistent – The BMM provides a Consistent Language at the motivation level Mission Strategies Tactics Vision Goals Objectives A statement describing the aims, values and overall plan of an organisation. e.g. “To be the leading creator and protector of wealth.” A Course of Action that channels efforts towards objectives e.g. “Call first-time customers personally” The strategic plan. e.g. “Defend our current customer base to reduce churn and increase repeat business” A concise statement of a desired change. e.g. “To be the leading provider of wealth management services in our major target markets The outcome of projects improving capabilities, process, assets, etc. e.g. “Develop an operational customer call centre by June 30, 2015. What the plan will achieve. e.g. “Improve customer satisfaction (over the next five years)” *Adapted from business motivation model - OMG “The BMM is a technique in which one determines an ultimate goal and determines the best strategy for attaining the goal in the current situation”
  21. 21. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 321 The Business Motivation Model Template There are a variety of ways to depict the BMM. This version we have found to be the most effective CUSTOMERS MISSION VISION STRATEGIES LEVERS INFLUENCERS OBJECTIVES GOALS OBJECTIVES CHANNELS DRIVERS GOALS EA’s standard structure for a BMM
  22. 22. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 322 The Business Motivation Model Example This is an example completed version of a business motivation model EA’s standard structure for a BMM
  23. 23. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 323 The Business Motivation Model Example The motivation model can now also be used as an anchor model to overlay a variety of key messages. More on this in a later module EA’s standard structure for a BMM
  24. 24. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 324 The Business Motivation Model is a Business Tool not an Architecture Tool The Motivation Model resonates well with business sponsors › Business Stakeholders often find traditional business architecture models difficult to consume › We found that the motivation model resonates well with business stakeholders › Helps move away from pain point architecture to focus on outcomes › The challenge is that when you show this to the architect its scoffed at – yet when you show it to the business stakeholder their response is – this is Gold – this is what I have been looking for. 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
  25. 25. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 325 Developing Strategic Prototypes “Prototypes are conversations you have with your ideas” – Tom Wujec - Designer OPERATIONAL CAPABILITY BUSINESS STRATEGY MOTIVATION The Business model is described in terms of business motivation and outcomes and is often represented in the form of a business motivation model Various business models produce different outcomes for different scenarios. Developing scenarios for business models is done using the business model canvas At the conceptual level you will develop the detail of the various strategic business models using the EA Business Reference Model with corresponding value chain models The capability layer expands the conceptual business model into detailed business capabilities and describes their inter-relationships and target maturity levels. It is often represented in the business anchor or capability model The operational layer addresses all the resources that are within the capabilities and is found in the more traditional process and functional decomposition models THE BUSINESS MOTIVATION MODEL THE BUSINESS MODEL CANVAS THE VALUE SYSTEM MODEL THE BUSINESS CAPABILITY ANCHOR MODEL NOT ADDRESSED
  26. 26. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 326 Business Models as a Unifying Concept Business Models are a unifying concept for business innovation, strategy and architecture *Adapted from Boeing  CUSTOMERS  FINANCIAL VIABILITY  VALUE PROPOSITION  INFRASTRUCTURE Business Model Innovation “What's possible?” Business Strategy “What will we do?” Business Architecture “What's the Blueprint?” Business Model “What does it look like”
  27. 27. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 327 What have these brands got to do with disruption? What is disruption?
  28. 28. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 328 Business Model Maturity Measuring the Maturity of a full business model is a complex task. The Key is to look for certain heuristics to use as a litmus test MATURITY 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 *Rita Gunther McGrath
  29. 29. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 329 The Strategic Business Model Layer › The Business Model canvas is an ideal tool to describe, analyse, design and prototype strategic business models at a high level › The canvas allows for a “front office” and “back office” style approach to looking at a business model › It was designed to create a business model concept that everybody understands: one that facilitates description and discussion. › The Canvas is described through nine basic building blocks that show the logic of how a company intends to make money. › The nine blocks cover the four main areas of a business: » customers, » offer, » infrastructure, » and financial viability. The Business Model Canvas CustomersInfrastructure Offer Financial Viability
  30. 30. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 330 CS R$ VP The Business Model Canvas The path of the analyst and architect is normally traversed left to right LEFT CANVAS efficiency RIGHT CANVAS value KAKP KR CR CS CH LEFT BRAIN logic RIGHT BRAIN emotion Back Office support Front Office valueCAREER PATH At this level is the value is achieved by being able to mix the infrastructure to achieve the value propositions At this level is the value is achieved by being able to provide the right mix of products and services to the customer that gives that customer value Market OptionsOperating Options P&S Options
  31. 31. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 331 Mandate – Architecture: Improve Market Performance The coarse grained problems that the canvas deals with are normally only handled by a business architecture practice that has the high visibility mandate Strategic Planning Business Architecture Business Planning Portfolio and Project Management Solution Architecture Solution Development
  32. 32. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 332 Injecting Business Architecture into the Strategic Scenarios Will Improve the Strategic Decisions as well as the execution of that strategy Semi Integrated Universal Bank Product Specialist Customer Owner Infrastructure Provider Mandate: Improve Market Performance
  33. 33. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 333 Mandate – Architecture: Improve Business Performance Rationalising the investment portfolio using business architecture is one of the main drivers for the business architecture practice at this level Strategic Planning Business Planning Business Architecture Portfolio and Project Management Solution Architecture Solution Development
  34. 34. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 334 Mandate: Improve Business Performance This facilitates creating a single unified business model that helps build coherency across the enterprise Strategic Themes Capability 1 Capability 2 Strategic Themes Capability 5 Capability 6 Strategic Themes Capability 3 Capability 4
  35. 35. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 335 Mandate – Architecture: Improve Project and Portfolio Performance A more traditional mandate landscape is where business architecture is part of the PMO method and scope Strategic Planning Business Planning Portfolio and Project Management Business Architecture Solution Architecture Solution Development
  36. 36. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 336 Strategic Themes Initiative 5 Initiative 6 Architecture as part of PMO ONLY has limited value and affects organisational coherency Strategic Themes Initiative 1 Initiative 2 Strategic Themes Initiative 3 Initiative 4 Mandate: Improve Project and Portfolio Performance
  37. 37. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 337 Developing the Value System Model Within the Market Improvement Space The business layer translates the strategic canvas into how value is delivered to the client along various dimensions, including the market model, value chain, products, and channel. OPERATIONAL CAPABILITY BUSINESS STRATEGY MOTIVATION
  38. 38. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 338 A Value System Example Within the Market Improvement Space Example of the value system for a safe society SAFE SOCIETY VALUE SYSTEM Judicial System: Judgement - Courts Penal System: Punishment - Jail Education and Accountability Government, Law and Policy Setting Enforcement System” Police
  39. 39. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 339 Network Consumer Device The Value System - Key existing players Within the Market Improvement Space You can also look for gaps in the market by gaining an understanding of where key players and competitors are positioned across the entre value system AccessBackbone Network Consumer Device Content Service Provider Network Provider Content Aggregator/ Packager Digital Content Provider Packaging/ distribution Content gathering/ conversion Network services Operation services Network Resale PortalCommerceClearing Rights management Johnnic Telkom Sentech MIH Digital Content provider SABC Johnnic Infosat MIH SABC Naspers Naspers DSTV/MNet MWeb SABC Telkom Orbicomm/MTN Ananzi ISDidata Banks Infosat Banks ?BskyB / PrimediaBSkyB DSTV/MNet
  40. 40. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 340 The Business Model Template Within the Improve Business Performance Space There are a variety of ways to depict the BAM. This version we have found to be the most effective Markets Customers / Key Buyers Market Segments Value Propositions Offerings, products and services Core Capabilities Core Processes Industries Channels Core Resources Market Model Products & Services Model Operating Model
  41. 41. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 341 Firm Value Chain Developing the Value Chain Within the Improve Business Performance Space › Once you have obtained an understanding of the value system you can address the firm value system › There are a variety of ways to document the firm value system › It is a good habit to first document structural relationships at the business model level and then these can be used as input into the value chain of the operating model A Firms Value Chain is itself has a process in which it provides value to the products and services as it delivers them to customers Channel Value Chain Buyer Value ChainSupplier Value Chains Supplier Value Chains Supplier Value Chains Channel Value Chain Channel Value Chain Buyer Value Chain Buyer Value Chain
  42. 42. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 342 The Canvas and the Value Chain Within the Improve Business Performance Space In most situations you can use the key activities from the canvas to help identify the value activities in your value chain The identifying of value activities requires the isolation of activities that are strategically distinct and required for differentiation and competitive advantage The Key resources will help identify the business entities that need to move through the value chain
  43. 43. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 343 Summarising the Value Chain You get what you measure – Logistics Example REMOVED
  44. 44. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 344 Defining Capability At this level the core value chain is expanded into the capability landscape OPERATIONAL CAPABILITY BUSINESS STRATEGY MOTIVATION The Business model is described in terms of business motivation and outcomes and is often represented in the form of a business motivation model Various business models produce different outcomes for different scenarios. Developing scenarios for business models is done using the business model canvas At the conceptual level you will develop the detail of the various strategic business models using the EA Business Reference Model with corresponding value chain models The capability layer expands the conceptual business model into detailed business capabilities and describes their inter-relationships and target maturity levels. It is often represented in the business anchor or capability model The operational layer addresses all the resources that are within the capabilities and is found in the more traditional process and functional decomposition models THE BUSINESS MOTIVATION MODEL THE BUSINESS MODEL CANVAS THE VALUE SYSTEM MODEL THE BUSINESS CAPABILITY ANCHOR MODEL NOT ADDRESSED
  45. 45. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 345 WHAT the Business Does – Functional Capabilities Functional Capabilities Cross-Functional Capabilities EnterpriseCoherency Capabilities Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined Cohesion Mandate Undefined - Enterprise Planning Ownership
  46. 46. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 346 Capability driven › Capability driven architectures are designed to support the strategic objectives of an organisation › Capabilities consist of people, process and technology › To fully understand a capability the three components exists regardless of their maturity level One of the techniques to drive out the correct mixes is through capability based planning Capability based planning is one of the tools that looks at the best “mix” of resources required to develop this cohesion Mission Strategies Tactics Vision Goals Objectives Outcome CAPABILITY People Process Tools
  47. 47. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 347 The Business Anchor Model The Anchor Model is the “Map of the City”
  48. 48. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 348 The Business Anchor Model And like a city map – the business anchor model can have many overlays. Each communicating a different message on the same underlying structure
  49. 49. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 349 The Business Capability Anchor Model The Anchor model is an anchor to a variety of views. BizBok Aligned *BizBokTM Sourced Views ORGANISATION / CAPABILITY MAPPING ACQUIRE LOAN ON-BOARD APPLICATION PROCESS FEE PAYMENT VALIDATE APPLICATION APPROVE LOAN ISSUE SECOND APPROVAL ISSUE LOAN Account Pipeline Management Customer Information Management Account Information Management Account Payments Management Customer Information Management Account Information Management Account Structuring Account Information Management Acceptance Notification Account Information Update Docket, Case File, Routing Management Account Structuring Acceptance Notification Docket, Case File, Routing Management Account Structuring Acceptance Notification Docket, Case File, Routing Management Acceptance Notification Docket, Case File, Routing Management VALUE STREAM / CAPABILITY MAPPING CAPABILITY / INITIATIVE MAPPING Initiative improves or creates new capabilities CAPABILITY / INFORMATION CONCEPT MAPPING CUSTOMER MANAGEMENT • Customer Name • Customer Number • Customer Address • Customer Phone • Customer Email • Customer Status • Etc… CAPABILITY / APPLICATION ARCHITECURE MAPPING STRATEGIC DIRECTION SETTING Business Planning Marketing Partner Management Capital Management Policy Management International Relations Management CORE:CUSTOMER FACING Account Management Product Management Channel Management Customer Management Agent Representative Management SUPPORTING Financial Management Employee Management Procurement Information Technology Mngt Training Operations Management CAPABILITY ACCOUNT MANAGEMENT Account Pipeline Management Account Billing & Payments Management Account Structuring Account File Management Account Maintenance Account Analytics Account Notification Account Information Management CAPABILITY / STRATEGY & BUSINESS MODEL MAPPING CAPABILITY / COST & PERFORMANCE ANALYSIS VIEW PRODUCT MANAGEMENT • $ Analysis • Impact Analysis • Heat Mapping
  50. 50. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 350 Determine the People, Process & Tools Looking at people, process and tools of the capability model helps you understand capability better an also is easier for business to understand SIMPLE SETUP Establish mobile sales team to service and set up customers on site Simplify data input and validation required for setup Provide Setup facilities across all channels with a consistent user experience Enable customers to transact immediately Provide customers with single sign on access to all services provided by Australia Post H L A H L A H L A H L H L A BUSINESS SERVICE GOALS CAPABILITY UPLIFTS ANTICIPATED THROUGH INFLIGHT PROJECTS LODGEMENT BUSINESS OBJECTIVE REALISATION People Tools Process Recruit and train mobile sales teams Train customer facing staff on lodgement proposition Introduction of single online portal Implement online Forms with basic data validation for all account application submission Review all communications to customers (website, pamphlets and notifications) and revise language Provide necessary sales tools and technology for mobile sales team Review and redefine risk approval criteria across all channels and user groups Simplify details captured on Forms (i.e. remove duplicated fields) for all account application submission Enhancing process and reducing non-value added activities across all channels and user groups Establish process and operating model for mobile sales team PEOPLE PROCESS TOOLS Sanitised
  51. 51. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 351 Determine the People, Process & Tools People, Process and Tools are the resources required that make up the capabilities › Talk to business stakeholders in terms of People, Process and Tools that drive out an outcome › To come up with the detail around the these resources, you use the business analysis community › Cluster these capability components into capability models later, since these are the models that the architecture discipline tends to use › This approach also helps business stakeholders begin to understand the resources within a capability › This approach also begins to expose the resources for discussion and helps facilitate a the assemble and mix discussions 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 INFLUENCERS - DRIVERS
  52. 52. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 352 The Business capability anchor model – Overlays: › Supporting impact analysis and business communication Overlaying specific views on the business anchor model can highlight issues and opportunities within the application portfolio, the program of work and the business concerns/pain points across key areas of a business. An overlay of business concerns and issues An overlay of the current program of work An overlay of the technology assets and their health
  53. 53. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 353 The Business capability anchor model – Overlays: Strategic Alignment
  54. 54. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 354 The Business capability anchor model – Overlays: Business Capability Maturity
  55. 55. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 355 The Business capability anchor model – Overlays: Current and Planned Investment is identified Often issues and planned investment are not aligned Investment skewed towards distribution capability
  56. 56. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 356 The Business capability anchor model – Overlays: Hotspots and Issues are identified Business architecture efforts are often tilted towards either an issue centric view or a strategic centric view – both views need to be considered Some hot spots exist under product manufacturing
  57. 57. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 357 The Business capability anchor model – Overlays: Comparing Investment to Issues to Identify Loss of Cohesion Comparing Multiple Overlays Often Produces High Value Insights
  58. 58. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 358 Outcome Based Architecture – Developing Value Streams with Cross-Functional Capabilities Functional Capabilities Cross-Functional Capabilities EnterpriseCoherency Capabilities Strategic Architecture Mandate – Business Ownership IT Architecture Mandate – IT Ownership Business Architecture Mandate Undefined Cohesion Mandate Undefined - Enterprise Planning Ownership
  59. 59. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 359 Defining the cross functional capabilities › Use a cross-Functional capabilities View to Identify common Business Interests Customer relationship management Sales BUSINESS CAPABILITY MAP FUNCTIONAL VIEW Service Service strategy Service delivery management Customer care Service fulfilment Contact management Activity management Privacy and preference management Opportunity management New business Opportunity management Relationship management Sales support Sales operation management Advice BUSINESS CAPABILITY MAP CROSS- FUNCTIONAL VIEW
  60. 60. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 360 The Cross Functional Capability Model The Process Layer Plays a Strong Role in assembling capabilities for different outcomes PROCESS Sign Up & Integrate CAPABILITY 20. Information Services Management CAPABILITY 15. Sales Execution PROCESS A1. Explore and compare potential providers and services PROCESS B2. Sign up and activate account PROCESS C3. Integrate my store with Australia Post’s API’s precedes precedes precedes precedes BUSINESS SERVICE Customer Sales Management BUSINESS SERVICE Partner Collaboration PROCESS C1. Receive information on how the systems and processes will work PROCESS C2. Install the necessary hardware / software on my systems is realized by LOGICAL APPLICATION COMP. Customer Sales Management LOGICAL APPLICATION COMP. Enterprise Resource Planning LOGICAL APPLICATION COMP. Partner Collaboration Management LOGICAL APPLICATION COMP. Security Management communicates with communicates with communicates with implements is realized by implements ACTOR Post Staff DATA ENTITY Sales Order ACTOR Post Staff participates in participates in is processed by consumes SAP - CRM SAP - ERP auspost.com.a u IAM - OIM is processed by ACTOR Fiona participates in Customer CAPABILITY People Process Tools Connecting these to projects provides valuable insight into coherency and the capex investment across the enterprise Within each process flow, there are typically four to five capabilities that make up the process. These typically correspond to functional silos that complete each step. Within each capability, the model identifies systems or applications that are used to execute the capability. This is where the model forms the alignment between business and IT. ARCHIMATE NOTATION
  61. 61. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 361 The Cross Functional Capability Anchor Model Helps Identify the Better Mix of Capabilities for Business Outcomes Its at this point that business begins to see the true value of using capabilities Standard functional capabilities can be aligned to a value chain Cross functional capabilities assemble and mix functional capabilities to achieve outcomes in the value map or driver tree Cross functional capabilities each drive out different outcomes. Underlying functional capabilities will have varying perspectives of capability maturity and capability uplift You can also use cross functional models as scenarios to test the capability anchor model validity
  62. 62. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 362 Cross Functional Capabilities BizBok Aligned - Value Stream: Stakeholder-Driven, End-to-end, Value Based Perspective VALUE STREAM / STRATEGY MAPPING • $ Analysis • Impact Analysis • Heat Mapping VALUE STREAM / COST & PERFORMANCE ANALYSIS VALUE STREAM / STAKEHOLDER MAPPING VALUE STREAM / INITIATIVE MAPPING VALUE STREAM / CAPABILITY MAPPING VALUE STREAM VALUE STREAM / BUSINESS PROCESS GOVERNANCE, ALIGNMENT PRODUCT & SERVICE VALUE STREAM / PRODUCT PLANNING & DEPLOYMENT VALUE STREAM FRAMED, DYNAMIC, RULES BASED ROUTING Initiative improves or creates new capabilities Initiative delivers value stream changes “A framework for enabling transparent transition of business objects across and enterprise” *BizBokTM Sourced Views
  63. 63. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 363 Developing The Business Model An Architectural Approach Transitioning Architect: Understand all inputs to work out the most optimal execution path
  64. 64. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 364 Optimised Ad Hoc MATURITYCapability Maturity Assessment Plot importance and maturity to discover focus areas STRATEGICALLY IMPORTANT Describe actions points for each quadrant Repeatable Defined What additional overlay would add a lot of value? Incremental Transformational
  65. 65. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 365 Architecture Data Capturing This is an “architecture” tool – NOT a business tool. You need to create a view for this final summary Capability Strategic Value Level of Maturity Maturity Organic Target State In-Flight Project n Hotspots Business Impact Gap Customer and Service Line Perspective Process Organization Technology Project Name CS FS CS FS CS FS P Pr T H M L P Pr T P Pr T Example Capability Med 2 3 3 3 2 N/A 1 2 X sig sig Example Sub- Capability ABC Low 3 3 2 3 3 4 X sig sig Example Sub- Capability DEF High 2 3 2 3 2 3 1 incr Example Sub- Capability XYZ Med 2 3 2 4 2 3 1 trns trns
  66. 66. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 366 Capabilities and cross functional capabilities are evaluated in light of all the change factors The capability mixes are evaluated against each scenario to determine the optimal path going forward Requirements: Program “x” requires a $100M 5-year net benefit and must be implemented in under 3 years. Strategic Scenarios Cross Functional Capabilities
  67. 67. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 367 The Capability Anchor Model Views You will need to develop your own shapes to represent the correct story you want to tell CL
  68. 68. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 368 The Architecture Story Sanitised The complexity of information is dependant upon the maturity of your audience
  69. 69. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 369 The EA Roadmap Template There are a variety of ways to depict a roadmap. This version we have found to be the most effective Mission, Vision, Goals and Strategies Strategic Objectives Aligned to initiatives Drivers Assumptions and Principles Program of Work Risks Aligned to Program of work Time, Cost and Effort Value Chain Current State Capability Current State People Current State Process Current State Tools Current State Data Current State Value Chain Target State Capability Target State People Target State Process Target State Tools Target State Data Target State EA’s standard structure for a Roadmap
  70. 70. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 370 The Planning Roadmap Outcome Architecture Roadmap – 3 Year Plan (FY11 to FY14)
  71. 71. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 371 Socialise the Architecture: The Architecture Storyboard Walkthrough These methods help the architecture speak for itself
  72. 72. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 372 Questions?

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