PITT PMI Business Architecture Final.pptx

© Business Architects Association 2010
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PMI Pittsburgh
Monthly Chapter Meeting
March 11, 2010
Enabling Business Transformation with Business Architecture
WHAT? WHAT would your company do? WHAT would you make? WHY are you here?
Why are you there? WHAT will you sell? HOW would you do it? HOW? WHERE will you
do it? When will you do it? Who does it? Who does that? WHERE are you? HOW will you
communicate? WHY? WHERE would you sell your products? HOW would you sell them?
WHERE would you sell your services? HOW would you recruit employees? WHERE? HOW
would you find customers? WHEN would you market? When would you sell? HOW would
you sell? HOW would you grow? HOW would you manage? WHO are your competitors?
WHEN? WHAT systems would you use? WHO? HOW would you market your brand?
WHAT is your brand? WHO sells your products/services? WHO is responsible for Service?
WHAT measures would you use to determine success? HOW would you partner with others?

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“Life is like riding a bicycle - in order to keep your balance, you must keep moving.”
Smart Things Smart People Said

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Albert Einstein

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“Engineering, medicine, business, architecture and painting are concerned not with the
necessary but with the contingent - not with how things are but with how they might be –
in short, with design.”

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Herbert Simon (American mathematical social scientist 1916-2001)

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"Never neglect details. When everyone's mind is dulled or distracted the leader
must be doubly vigilant."

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General Colin Powell

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“Confusion and clutter are failures of design, not attributes of information.”

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"The Leonardo da Vinci of data."
THE NEW YORK TIMES

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Edward R. Tufte

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“Everyone designs who devises courses of action aimed at changing existing
situations into preferred ones.”

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Herbert Simon (American mathematical social scientist 1916-2001)

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“Make everything as simple as possible, but not simpler.”

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Albert Einstein

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"You're gonna need a bigger boat."

16

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Police Chief Martin Brody (Roy Scheider)

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“STRATEGY EQUALS EXECUTION. All the great ideas and visions in the world are
worthless if they can't be implemented rapidly and efficiently. Good leaders delegate and
empower others, but they pay attention to details, every day. (Think about supreme athletic
coaches like Tony Dungy, Phil Jackson, Joe Paterno, and Tony LaRussa). Bad leaders,
even those who fancy themselves as progressive "visionaries," think they're somehow
above operational details. Paradoxically, good leaders understand something else: an
obsessive routine in carrying out the details begets conformity and complacency, which in
turn dulls everyone's mind. That is why even as they pay attention to details, they
continually encourage people to challenge the process. They implicitly understand the
sentiment of CEO leaders like Quad Graphic's Harry Quadracchi, Oticon's Lars Kolind and
the late Bill McGowan of MCI, who all independently asserted that the job of a leader is not
to be the chief organizer, but the chief dis-organizer.”
General Colin Powell
Chairman (Retired), Joint Chiefs of Staff

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A Perspective
Transformation at YOUR COMPANY
Business Architecture
Business Architecture Framework
Business Architecture and IT
Discussion
Agenda

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Problem: Lack of Integration or Holistic View
Results
Strategy
Cause and Effect vs. Design
?

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Results
Strategy
• Political environment
• Buzz words
• Bull Speak
• I am my silo
• Personal agendas
• I am my job
• I rule my organization
• Wrong people in the wrong job
• Unclear competencies
• No integrated or holistic view
• Un aligned processes, technology
and investments
• Competing agendas
• Working hard but getting no where
• Our results did not meet targets
Time Lag
Business Today

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Business
$
Organizational
Operational
Strategy Governance
Business Architecture Model™
Business
Results
“Organizations are perfectly designed to achieve the results they do.” – David Nadler
Is your Organization delivering the
RIGHT results?

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Agenda
A Perspective
Business Architecture Approach
Case Study
Discussion

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Solutions that only address the technical aspects of the problem
Solutions are based on existing organizational structure and technical design – re-invent
the wheel
Projects are driven at a project level instead of an enterprise level
Solutions being designed before the Future-State is defined
Projects are funded based on fiscal budget rather than investment in the business need
Business and IT speak two different languages resulting in confusion/frustration between
each area
Define 2 to 4 challenges associated with your company or business and determine their
alignment category with the Business Architecture Model (Strategy, Organization, etc…).
Below are sample challenges you can use.
Challenges

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Poor collaboration between Business and IT results in Business Requirements that do
not accurately define the Future-State needs/Future-State solutions
Team members, from all delivery organizations, spend numerous hours attending
meeting to attain information of what is trying to be accomplished
Roles are not clearly defined resulting in work overlap and project confusion
Team members are involved in every step of the process instead of specializing in their
skill set
Team members do not have a clear understanding of the decision making process
Solutions are implemented without a clear set of success metrics
Challenges
Define 2 to 4 challenges associated with your company or business and determine their
alignment category with the Business Architecture Model (Strategy, Organization, etc…).
Below are sample challenges you can use.

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Define a current and target state for each of the challenges you identified. The following pages
contain samples of how to lay out your ideas in business-friendly terms.
Challenges

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The Business Problem… Strategy
Non-Cost Competitive
Technology viewed as an
Expense (based on yearly
budget)
Low Investment
• Aging Technology
• Service Level Improvement Required
• Maturing market brand
Current Target
World Class Cost Competitive
Technology viewed as an
Investment (a differentiator to
the business)
Leveraging the Investment by
Partners
• Refresh Technology – ($350M)
• Significantly Improved Service Level
Variable Cost Model
• Basic, Gold, Premium
$
Fixed Cost Model
Sample Strategy

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The Business Problem… Strategy
Market Change
Economic Change
Customer Trend Change
Competition Change
Declining Market Share
Strategic / Industry Leader
Market Growth
Market Leader
Company Expansion
Merger / Divestiture
$
Current Target
Sample Strategy

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Current
• 176+ technology centers
• Multiple networks
• 55+ random help desks
• 63 Oracle instances
• 4000+ IT contracts
• 100+ IT organizations
• >5000 staff
• Every flavor of desktops/laptops
• No standards
Target
• 11 computer centers
• One network
• 20-30 specialized help desks
• 29 Oracle instances
• 1000 IT contracts
• Global business IT organization
• ~2300 staff
• Leveraged standard desktops/laptops
• 97 enterprise standards
Sample Multiple Categories
The Business Problem… Complexity

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Current
• Labor Intensive
• Many manual processes
• International
• Multi-divisional
• Redundant processes
• Many organizational levels
• Operational problems
• Low Productivity
• Redundant systems
• No standards
Target
• Efficient
• Streamlined
• Productive
• Holistically Aligned
• Flat Organization
• Empowering
• Defined Decision Making Process
- Governance
- Review
- Upward/Sideward/Downward
• Proper Oversight and Issue
Escalation
Sample Multiple Categories
The Business Problem… Complexity

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From Target
Sample Organizational (Culture)
• Response Based Culture
• Modular Thinking
• Managing Projects
• Ad Hoc Mgmt
 Business Acumen Culture
 System/Leverage Thinking
 Manage Results (Service Delivery)
 Proactive Leadership
The Business Problem… Culture

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From Target
Sample Organizational (Culture)
• Conservative/Reactive
• Risk Adverse
• Unclear and Confusing Policies
• Unclear and Confusing Procedures
• Unfair Reward Structure
• Many Subcultures
 Business Acumen Culture
 Innovative
 Market Leader
 Clear Policies & Procedures
 Uniform Reward Structure
 Proactive
 Employee Evaluations Tied to
 Defined Behaviors
The Business Problem… Culture

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Achieving Business Results
Business
$
Organizational
Operational
Strategy
Governance
Results
Tie Your Targets States into a Holistic View
ROI

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STRATEGY EQUALS EXECUTION
Achieving Business Results

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Agenda
A Perspective
Discussion

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What is Business Architecting?
New School of Thought
Business as a System of Interdependent Structures
Tools for Aligning Workflows with Strategies
Preparing Business Components for Automation
Solving Complex Problems
Working Through Political Environments
Getting People On Board Cause and Effect
Aligning Strategy, Business, Operations, Organization, Governance
Define the Intersection of What, When, Where, Who, How, and Why

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Benefits to The Business
Achieve ROI
Synchronize Departments
Optimize Organizations
Increase Corporate Agility
30% + Productivity Improvements
Increase Competitiveness in Marketplace
– Unique Insights
– Access to Specialized Problem-Solving Tools
– Support of a Professional Network
– Real World
• “All other things remaining constant”

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Incomplete Solutions
– “Let’s just address this portion…”
– “We’ll choose a few items from the list…”
– “However, there is always a governance risk…”
Local Optimizations
– “Set our goals at the department level…”
– Silver bullet phrases like “Best-of-breed”
Non-Synchronized Activities
– “Agree to disagree…”
– “Go our own way…”
– “The best projects will rise to the top…”
Warning Phrases

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“Now that you put it that way.”
“How can our team help you to achieve your goals?”
“Who else in our supply chain will be impacted by this change?
“How can we include their resolution as a part of our process?”
“What are the next three phases likely to be?”
“What are the needs of organizations external to <company>?”
“When will we know?”
Winning Phrases

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What is An Architect?

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Visionary
Translator
Lawyer
Advisor
Analyst
Scribe
Framework and Guideline Designer
Coordinator of System Engineers
Project Manager
______________________
What is An Architect?

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Roles in Construction?
Architect
− Vision, Design, Contract Documents
Engineer
− Structural, Mechanical, Soils, Electrical
Contractor
− General, Sub
Operator
− The Business Itself

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Architect
– Divine Being, Artificial Limb Designer, Various Prescribing
Doctors
Engineer
– Specialists—Neurologist, Endocrinologist
Contractor
– Surgeon
Operator
– You and Your Cells
Roles in Medicine?

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Architect
– CEO; anyone responsible for vision, design & project
oversight
Engineer
– Subject Matter Expert--Finance, Manufacturing, etc.
Contractor
– Projects Office, Project Team Members, Consultants
Operator
– VP, Director, Manager, Line Employees
Roles in Business?

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Agenda
A Perspective
Discussion

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1 3 2 3
2 2 1
3 2
2
a b c d e
a
b
c
d
e
1= low, 3 = high
Congruence Matrix: Alignment of various elements of the
business with each other.
Can be a department, business
style, mission statement, web
component, etc.
Every aspect must & can be in
alignment.
Size is irrelevant.

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Future State
• Validates the Strategy
Business Initiatives
• Adds Structure and Planning
• Sets Expectations
Business Solutions
• IT Enables Businesses
Define a Simple Solution Approach

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Future State Business Initiatives Business Solutions
Area of
Challenge
• Validates the
Business Strategy
• Works with Business
to create the Future
State based on the
strategy
• Identifies gaps
between the Future
State and Current
State
• Creates initial Key
Performance
Indicators (KPIs)
• Works with Business, Subject
Matter Experts (SMEs), … to
define the Business Drivers /
Initiatives
• Work with Business and Business
Process Design to create
Business Use Cases / Events /
Rules
• Create Business Case for each
Business Driver / Initiatives
• Create Financial Model for each
Business Driver / Initiatives
• Update Key Performance
Indicators (KPIs)
• Creates High-level Timeline
• Converts the Business Driver /
Initiatives into implementable
Business Capabilities
• Defines the operational
aspects of the Business
Capabilities (processes, IT
aspects, Structural, equipment)
• Define the organizational
aspects of the Business
Capabilities (organizational
structure, competencies,
culture)
• Define the governance aspects
of the Business Architecture
project
• Updates Business Case,
Financial Model, Key
Performance Indicators (KPIs),
and High-level Timeline

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For each area of challenge, layout the Future State in actionable points. Then do
the same for your suggested business initiatives and business solutions.
Remember that the Business Initiatives and Solutions may only be “thought
starters” at this point. You can use Activities or Deliverables, whichever resonates
with the business best.

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Activities
» Validates the Business Strategy
» Work with Business to understand the
projects goals and strategies
» Works with Business to create the Future
State based on the strategy
» Identifies gaps between the Future State and
Current State
» Creates initial Key Performance Indicators
(KPIs)
Activities
» Works with Business, Subject Matter Experts
(SMEs), … to define the Business Drivers /
Initiatives to achieve the Future State
» Work with Business and Business Process
Design to create Business Use Cases /
Events / Rules
» Create Business Case for each Business
Driver / Initiatives
» Create Financial Model for each Business
Driver / Initiatives
» Update Key Performance Indicators (KPIs)
» Creates High-level Timeline
Activities
» Converts the Business Driver / Initiatives into
implementable Business Capabilities
» Define the operational aspects of the
Business Capabilities (processes, IT aspects,
Structural, equipment)
» Define the organizational aspects of the
Business Capabilities (organizational
structure, competencies, culture)
» Define the governance aspects of the
Business Architecture project
» Updates Business Case, Financial Model,
Key Performance Indicators (KPIs), and
High-level Timeline
Deliverables
» Future-State Model
» Current State Analysis
» Gap Analysis
» Key Performance Indicators (KPIs)
Deliverables
» Business Driver / Initiatives
» Business Use Cases / Events / Rules
» Business Case
» Financial Model
» High-level Timeline
» Updated Key Performance Indicators (KPIs)
Deliverables
» Business Capabilities
» Governance Model
» Updated Business Use Cases / Events /
Rules
» Updated Business Case
» Updated Financial Model
» Updated Key Performance Indicators (KPIs)
Define
Future
State
Develop
Business
Initiatives
Develop
Business
Solution
s

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Agenda
A Perspective
Discussion

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Capabilities build on
other capabilities
Ongoing service
delivery is the
required foundation
for all other
capabilities
Expecting agility
without having the
other capabilities
hurts performance
Organization Change
Ongoing Management
Information
Technology
Business
CIO/CXO
Relationships
Governance
and
Alignment
Business
Agility
New Project
Delivery
Ongoing
Service
Delivery

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Business Domain IT Domain
External
Internal
Business Strategy IT Strategy
Organization,
Infrastructure &
Processes
Info Systems,
Infrastructure &
Processes
2
3
4
1
Strategic Alignment Model
Strategy Alignment with IT: Four Alignment Perspectives
1. Strategy Execution. This perspective views the business strategy as the driver of both organization design choices and
the logic of the IT infrastructure (the classic hierarchy of strategic management). Senior management forms the strategy;
IT is only the strategy implementer.
2. Technology Potential. This perspective also views the business strategy as the driver. It involves the formulation of an
IT strategy to support the business strategy and corresponding specification of the required IT infrastructure and enabling
processes. Senior management should provide the technology vision to articulate the logic and choices pertaining to IT
strategy that would best support the business strategy. The role of the IT manager is that of IT architect who efficiently
and effectively designs and implements the IT infrastructure consistent with external components of IT strategy (scope,
competencies, and governance).
3. Competitive Potential. This perspective is concerned with
the exploitation of emerging IT capabilities to:
• impact new products and services (i.e., business scope)
• Influence the key attributes of strategy (i.e., distinctive
competencies)
• develop new forms of relationships (i.e., governance)
4. Service Level. This perspective focuses on how to build
world class IT capabilities. The role of business strategy is
indirect. This perspective is viewed as being necessary, but
not sufficient to ensure the effective use of IT resources and
responsive to the fast-changing demands of the user
community. The role of top management is “Prioritizer.”
The role of the IT manager is that of the business leader.

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Strategy Alignment with IT: Linear Line of Site
Shareholder Value Loyal Customers Effective Processes Motivated Employees
Technology: What We Need to Do What We Do Better
Organization: What We Need To Do
Capabilities: What We Need to Execute Our Game Plan
Strategy: Our Game Plan
Business Goals: Our Target Metrics
Vision: What We Want To Be
Core Values: What We Believe In
Mission: Why We Exist
Business Processes: How We Need to Do What We Need To Do
Governance
Kaplan, R. & Norton, D. (1996). The Balanced Scorecard. Harvard Business Press.
P

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Technology: What We Need to Do What We Do Better
Organization: What We Need To Do
Business Processes: How We Need To Do What We Need To Do
Capabilities: What We Need to Execute Our Game Plan
Strategy: Our Game Plan
Business Goals: Our Target Metrics
Vision: What We Want To Be
Core Values: What We Believe In
Mission: Why We Exist
INITIATIVES
SCOPE
SCHEDULE
COST
Business Value Delivery Value
• % of requirements delivered
• early, on-time or late delivery
• under, at or over budget
• variance against original
• variance against forecast
• dependent activities enabled
Business
Architecture
Strategy Alignment with IT: Linear Line of Site
Change
P

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Business / IT Alignment occurs when IT delivers the right
solution, at the right time, for the right cost
Business Wants to Know IT Managers Want to Know
Technical Staff
Wants to Know
Business
Architecture
Solution
Architecture
• How can I innovate?
• How quickly can I get it?
• How much will it cost/save?
• What are the risks?
• How can I use it?
• How can my customers use it?
• What’s possible?
• Where can I use it?
• Have we done this before?
• What value is it?
• How can we deliver it?
• Do we have the right skills to… ?
• What are the alternatives?
• How do I make sure its correct?
• What’s possible?
• What do I build?
• Why do we do this?
• Why do we do that?
• What do I build it with?
• When do I build it?
• Who will be using it?
Technical
Architecture

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(Strategy & Operations)
Solution Architecture
(Platform Independent)
Technical Architecture
(Infrastructure & Processes)
Business Owns
– Leadership
– Direction
– Business SMEs
Business Stewardship
IT Facilitates
IT Owns
Governed by Business and Solution Architecture
IT Owns
Business Approves
IT Facilitates
Alignment can be achieved through collaboration on a
business-driven plan

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Business Models, Business Requirements and Business Rules
are core capability components of a Business Architecture
Framework for defining and meeting the business needs of the
enterprise, determined and set by it’s Vision and Strategy.
Vision
“Where do we
want to be,
what do we
want to
achieve?”
Strategy
“How will we get
there? What are
the things that we
will and won’t
do?”
“What drives the
business needs?”
Business
Model
Business
Requirements
“How are we
organized/
structured? How
do we operate as
a business?
What are our
processes?”
“What business
capabilities are
required to meet
the business
needs?”
“What capabilities are required to meet the
needs of the business?”
Business
Rules
“What are the
parameters/
constraints within
which we must
operate?”
Functional
Requirements
Technical
Requirements
“What are the
functional
characteristics of
the required
capabilities?”
“What are the
behaviors and
characteristics of
specific solutions?”
“How will we provide the required
capabilities?”
“What behavioral
characteristics or
properties are
required of the
solutions?”
Non-Functional
Requirements

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Structure and Relationships
Terminology, Business Data Timing, Dependencies, Actors
Activities, Capabilities
Business
Activity
Business
Information
Business
Process
Business
Context
Activity
Requirement
Requirement
Requirement
Activity
Requirement
Requirement
Function
• Business Context Diagrams
• Context Diagram
• Locations Definition
• Organization Chart
• Other/“Custom”
• Roles Definition
• Security/Role Model
• Glossary
• Business Term Model
(BTM)
• Business Information
Library (BIL)
• Business Activity Model
(BAM)
• Business Requirements
• Business
• Functional
• Non-Functional
• Event List
• Business Process
Map
• Business Rules

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Business Objective
Develop Vision /
Strategy
Identify Business
Needs
Re-engineer
Processes
Re-align the
Organization
Make Investment
Decisions
Automate
Processes
Develop Systems
Solutions
Business Architecture Artifacts
Key: Generally useful or required
May be useful
Roles
Definition
Context
Diagrams
Business
Elements
Activity
Model
Process
Map
Event
List
Business
Requirements
Business
Rules
Workflow
Definition

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Assists in initiating the development of systems solutions and the transition of needs and
expectations to organized project teams
– Understanding and communicating business needs is one of the most critical
purposes of business architecture. Without the architecture, the needs of the
business lack content and organization and are very difficult to manage and
communicate.
Supports communication and understanding across an organization:
– By using consistent models and terminology
– By providing written and graphical representations
Creates reusable repositories of business information for future analysis.
– For example, an activity model serves as a repository of requirements allowing the
requirements to be reused across multiple projects and processes. This also allows
for the risks of changes in business needs to be analyzed as the implementation of
each requirement can be traced within the activity model to impacted systems.
Business Architecture is important to the CIO and his/her teams
because its effective use:

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Business Case Development
Innovation for Competitive Position
Business Activity Modeling (supports process decomposition, requirements engineering, etc.)
Introduction of a new product or change to an existing product
Additions or changes to business operations
Changes of the structures and roles within an organization
Development of technologies and software solutions
Evaluation of vendor products or solutions
Analysis of business and/or system impacts
When to initiate Business Architecture?
Business Architecture can be used for a wide variety for initiatives and activities, including:

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Business Architecture plays a key role in the evolution of a
business idea from its inception to its implementation. Various
components of business architecture help facilitate and define each
phase of the Business Initiative Lifecycle.
- Business Initiative Lifecycle -
Develop/Utilize
Business
Architecture
Create/Validate
Business-Level
Requirements &
Rules
Generate Ideas
Validate/Create
Vision, Strategy
Create Business
Case
Develop Solution-
Level
Requirements
Define Business
Elements
Transition of
Architecture
to Systems
Is This Initiative
Worth Funding?
Do We
Proceed With
The Idea?
Identification Opportunity and Business Case Submission Requirements and Refinement
In order to communicate a complete picture of business needs to the System, it is
essential that each component of business architecture be implemented in the lifecycle.

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Develop/Utilize
Business
Architecture
Create/Validate
Business-Level
Requirements &
Rules
Generate Ideas
Validate/Create
Vision, Strategy
Create Business
Case
Develop Solution-
Level
Requirements
Define Business
Elements
Transition of
Architecture
to Systems
Do We
Proceed With
The Idea?
Identification
Typical Deliverables:
• Vision
• Strategy
• Goals
• Objectives
• Roadmap
Key Business Architecture Components:
Activity Model
• An activity model representing the discrete activities of the business will
help identify and maintain the vision and strategy of an organization.
• Activity models containing requirements from previous projects that
may/may not have been implemented can help identify necessary projects.
Context Diagrams
• Aids in facilitating understanding of the interaction of information between
entities such as business areas, systems, or applications that would be
affected by the potential project.

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Develop/Utilize
Business
Architecture
Create/Validate
Business-Level
Requirements &
Rules
Generate Ideas
Validate/Create
Vision, Strategy
Create Business
Case
Develop Solution-
Level
Requirements
Is This Initiative
Worth Funding?
Opportunity and Business Case Submission
• Business Context Models
• Business Activity Model
• Business Process Maps
• Cost Benefits Analysis (CBA)
• Systems Hours Estimates
• Business Case
• High-level Non-Functional Requirements
• Functional Requirements (Partial)
• Business Rules
Business Activity Model
• Identification of high level business requirements and business rules necessary for implementation of a business concept.
• More accurate business cases by providing detailed information to aid in the identification of resources and cost estimates.
Business Process Maps
• Represents a visual representation of the flow of work to produce a desired response to a business event.
Business Context Diagrams
• Assists to facilitate an understanding of the interaction of information between entities such as business areas, systems, or
applications that would be affected by the potential project.

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Develop/Utilize
Business
Architecture
Create/Validate
Business-Level
Requirements &
Rules
Create Business
Case
Develop Solution-
Level
Requirements
Define Business
Elements
• Activity Model
• Repository for the detailed business, functional, and non-functional requirements necessary for transition of
business architecture to systems for a solution implementation.
• Business Element Artifacts
• Items such as the Business Information Library and Glossary provide the definition and/or additional information
related to the corresponding pieces of business architecture, such as requirements and process maps.
• Completed Functional and
Non-Functional
Requirements
• Technical Requirements
(developed by solution
provider)
• Business Volume Metrics
• Roles
• Business Data Elements
Requirements and Refinement

68
The transition of Business Architecture to Systems for development and implementation is the
most critical step in the Project Initiation Lifecycle.
Why transition other business architecture components in addition to process maps?
Detailed business and functional requirements defined by the business gives the systems team a
workable set of requirements on which to build technical requirements and specifications; allows more
time for technical requirement definition rather than for determining the business needs from scratch.
A requirements set can facilitate requirements-based estimating (versus strategy or capabilities) for
project hours.
An activity model can help capture various attributes for each requirement such as priorities, releases,
users, impacted systems, process impacts, organizational impacts, sub-projects, etc.
Develop/Utilize
Business
Architecture
Create/Validate
Business-Level
Requirements &
Rules
Create Business
Case
Transition of
Architecture
to Systems
Is This Initiative
Worth Funding?

69
Upfront clarity and understanding of business objectives to reduce churn and increase
speed in project delivery
Direct linkages across business and technology to enable optimal prioritization and
roadmap planning
Common understanding of business vision and processes
Structured approach for evolving business strategies
Means to effectively identify and prioritize initiatives most aligned with company goals
and strategies
Measurement of business goal attainment via clearly defined Key Performance
Indicators for business strategies
Early identification of technology redundancies and/or reuse
What are the benefits of Business Architecture?

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Solutions that address all aspects of the solution e.g. organizational, cultural, operational...
Solutions that are innovative, solve the business needs, achieve their strategies & goals,
and move the business forward
Projects are driven at an enterprise level creating a unifying / integrated organization with
the ability to produce the value-creating operations
Projects are funded based on business need instead of budget
Common Language between Business and IT allow for better solutions
Business Requirements, Business Processes, and Organizational Design are based on the
Future-State vision and add valuable information to the develop and implement process
Roles are clearly defined eliminating overlap and confusion between organizations
Team members know who to go to for what and speeding up the decision making process
Success Metrics are developed throughout the process allowing for meaningful and
measurable results
What are the benefits of Business Architecture?

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Business
Requirements
Information
Systems
Analyst
Technology
Architect
Process
Architect
Competency
Architect
Release
Manager
Change
Manager
CMO
Program
Manager
UX Architect
Business
Architect
Business
Leadership
Advisory
Collaboration
Structure
Planning
Business
Information
Change
Management
Information
Release
Information
Organizational
Requirements
Competency
Requirements
Process
Information
Business
Process
Information
Business
Capability
Requirements
Competency
Information
Program
Information
User
Experience
Information
Solution
Requirements
Organizational
Architect
Business Architecture Organization Integration

72
Gov
Ops Org
Biz
Results
Strategy
Time
?
Will Actions Yield Desired Results?

73
?
Discussion

74
http://www.businessarchitectsassociation.org/
Robert Sheesley, MBA, FLMI
Certified Business Architect©
Celerity, LLC
One Oxford Centre
301 Grant Street, Suite 4300
Pittsburgh, PA 15219
Office 412-928-9250
Mobile 312-735-9559
rsheesley@celerity.com
www.celerity.com
Contacts
Jack Hilty
Certified Business Architect©
Managing Principal
SentientPoint, Inc.
727 S. Dearborn Street, Suite 710
Chicago, IL 60605
Office 312-925-6841
Jhilty@SentientPoint.com
www.SentientPoint.com

75
Understanding of Need
 Develop a Claim Business Activity Model to identify solution-agnostic business and
functional requirements; what the business does should be derived from its strategy
and the functions that support the strategy.
 Create a Process Model that will help to define the alignment of Claim activities (WHAT)
and processes (HOW) to enable better management decision making.
 Juxtapose business activities, snapshot sampling data and business processes to
perform a frequency and duration analysis and identify areas of need and efficiency.
ABC Company captured operational information related to key activities of the business
(WHAT is being done). Tying those activities to HOW the work gets done is needed in
order to reveal relevant information to help ABC Company increase its productivity and
decrease its operating costs.
A need exists to map and align WHAT ABC Claim does (activities) with HOW the work gets
done ( processes) to enable a greater understanding of what is real and relevant.
In support of responding to this need the following objectives need to be achieved:
Case Study Supplement

76
WHAT is REAL?
• The business has changed in response to market and internal drivers
• The business continues to change and should continue to be responsive
• The people executing the processes to support the business will and should change
• Processes change (planned through solution delivery; unplanned for other reasons)
• Measures of Success (Key Performance Indicators)
WHAT is RELEVANT ?
• SME-identified Business Activities (prelude to a Claim activity model) for Snapshot Sampling
• Snapshot Sampling Data
• Level 0 and Level 1 Business Process Maps
• We have to change the way our people work effectively and help them how to work efficiently
• What do we need to do to evolve our business model and make good use of the intersection
between WHAT we do and HOW we do it to move from reactive to proactive decision making?
So What?

77
Current Situation – What We Have Today
 Rudimentary Activity Model
- 300+ key activities identified by Subject Matter Experts that correspond with the claim lifecycle
- Over 17,000 occurrences captured during pre-Claim Center implementation snapshot sampling
- Over 30,000 occurrences captured during post-Claim Center implementation snapshot sampling
- Time metrics tied to activities to identify/assess the value that CC is delivering to the business
 Claim Center-solution business and technical requirements developed independent of process change
 Process maps of Claim Organization
- developed to support Claim Center and New Claim Model
- built independent of snapshot sampling activities
Snapshot
Activity
A
B
C
D
E
Pre-CC
(Hours)
Post-CC
(Hours)
120
200
80
179
55
634
Value to
Business
low
med
high
high
med
30
240
120
190
54
634
Delta
(Hours)
(90)
40
40
11
(1)
0
Value
Delta
(3.00)
14.00
22.00
6.05
(0.35)
38.70
Weight
Factor
.10
.35
.55
.55
.35
Good data and information in pieces originating from the need to accomplish a narrow scope (e.g.,
snapshot data used to justify the Claim Center business case). A structure doesn’t exist to facilitate
a thorough understanding of the Claim Operating Model it’s relationships, and decision making.

78
Vision/Strategy
• Market Position
• Objectives
• Targets
Strategic Plan
• Organization Alignment
• People Development
• Governance Model
Functions/Activities
• Business Rules
Business Processes
• Inputs
• Outputs
Functional Characteristics
• Functional Requirements
• Performance Metrics
Technical Capabilities
• Non-functional Requirements
• Technical Requirements
• Technical Design
WHAT HOW
Business
Technology
•Tasks
• Steps
Translation of Business Requirements
to Technical Requirements

79
Functions/Activities
• Business Rules
Business Processes
• Inputs
• Outputs
• Tasks
• Steps
Functional Capabilities
• Functional Requirements
• Performance Metrics
Development of a Claim Business Architecture will help reveal the value of the intersection
between WHAT we do and HOW we do it and to help Claim operations understand what is
relevant for making better decisions?

80
Strengthen Relationships (Company X/agents,
agents/customers) – Easy to Work With
Be well-regarded in industry:
competent, capable, tough, smart
Aggressive Cost Management
Provide timely & accurate
information & reliable data
quality
Efficient, effective
claim process
Proactive management of
changing business
environment
Develop high-quality workforce. Adequate
supply of competent, motivated employees.
Learning
& Growth
Process
Customer
Financial Contribute to NOI

81
Company X Claim Scorecard
Strategic Objective
FINANCIAL:
AGGRESSIVE COST
MANAGEMENT
SWOT
• Focus on cost
management (S)
• Claim recovery (S)
• Strategic Clarity (Mgt
team) (S)
• Sense of urgency (S)
• Decline in premium
and claim volume
(versus fixed cost
structure) (T)
• Technology and
decision support (W)
• Improve decision-
making on capital
opportunities (O)
• Improve vendor
management and
outsourcing (O)
• ECO & CLEM
Exposure (T)
• Rising legal exp (T)
Critical Processes
• Coverage analysis
• Investigation
• Litigation management
• Damage management
• Liability/compensabilit
y determination
• Loss estimation
(reserving)
• Vendor management
• ULAE management
• LIO measurement
Leading Metric
% Open cases
with LIO
% of new suits to
staff counsel
Lagging Metric
ALAE Composite
Unit Cost
(including Legal)
ULAE Composite
Unit Cost
Reserve adequacy
LIO
Avail.
Y
Y
Y
Y
Y
Y

82
Strategic Objective
CUSTOMER:
STRENGTHEN
RELATIONSHIPS
WITH CUSTOMERS
(BROKERS, AGENTS,
REGULATORS, ETC.)
SWOT
• Help strengthen
relationships Company
X-Agents, Agents-
Customers (O)
• Continuous
organizational change
(T)
• Understanding how
claim can add value to
customer relationships
(W)
Process
• RVP and Claim
Director visits to
agencies/HPAs/
PACER
Leading Metric
Customer Claim
review results
(RM)
RVP and Claim
director visits to
agents.
Lagging Metric
Account Retention
Agency
Satisfaction
Scores
Avail.
P
P
P
P

83
Strategic Objective
PROCESS:
PROACTIVELY
MANAGE CHANGING
BUSINESS
CONDITIONS
SWOT
• Knowledge sharing
and aligned metrics
with actuarial (O)
• Governance (S)
• Metrics aligned with
actuarial and UW (O)
• Declines in premium
and claim volume
(versus fixed cost
structure) (T)
• Change Management
(O)
• Manage FTE’s based
on staffing models (S)
• SLC organizational
structure (W)
• Extend metrics to all
oper. levels (O)
• Shared mindset (S)
Process
•Knowledge sharing with
actuarial and UW
•Lost estimation
•Best practice integration
•Benchmarking
•Forecasting
•Modeling
Leading Metric
Claim volumes
Written premium
Lagging Metric
# of FTE’s vs.
Staffing Model
ULAE ratio
Avail.
Y
Y
Y
Y

84
Strategic Objective
LEARNING &
GROWTH:
HIGH QUALITY WORK
FORCE. ADEQUATE
SUPPLY OF
COMPETENT,
MOTIVATED
EMPLOYEES
SWOT
• Loss of Talent (T/W)
• Lack of low level
management talent (W)
• Gaps in succession
plans (W)
• Take advantage of
market disruptions to
hire good people (O)
• Strengthen
performance
management (O)
• Leadership (S)
Process
• Recruiting
• Training and
development
• Turnover
• Promotion
• Performance
management
Leading Metric
Employee
engagement
(survey)
Employee
commitment
(survey)
Lagging Metric
Voluntary turnover
Percent of “high
potential”
employees
promoted
Avail.
Y
Y
P
P

85
Initiatives
Strategic Objectives
C
o
n
s
i
s
t
e
n
t
,
s
o
l
i
d
f
i
n
a
n
c
i
a
l
p
e
r
f
o
r
m
a
n
c
e
A
g
r
e
s
s
i
v
e
l
y
M
a
n
a
g
e
C
o
s
t
s
B
e
w
e
l
l
-
r
e
g
a
r
d
e
d
i
n
t
h
e
i
n
d
u
s
t
r
y
S
t
r
e
n
g
t
h
e
n
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
a
g
e
n
t
s
/
c
u
s
t
o
m
e
r
s
P
r
o
a
c
t
i
v
e
l
y
m
a
n
a
g
e
c
h
a
n
g
i
n
g
b
u
s
i
n
e
s
s
T
i
m
e
l
y
a
c
c
u
r
a
t
e
d
a
t
a
E
f
f
i
c
i
e
n
t
p
r
o
c
e
s
s
e
s
H
i
g
h
q
u
a
l
i
t
y
w
o
r
k
f
o
r
c
e
Initiatives
Expand Staff counsel offices x x
Claim Model (FNOL, Express, COE) / GSL x x
Staff Modeling x x x
Work Comp BPI x x
Knowledge sharing with UW and Actuarial (qrtly mtg) x x
Business rationalization reviews
Strategic Sourcing (Pharmacy, DME, PT, etc) x x
Recovery (SIF, TPD, Subrogation lawyers) x x x
ECO x
Monitoring Counsel (in-sourcing) x x
Coverage Counsel x x
Panel firm management (including Visibility) x x
Attorney Evaluation x
Agent Communication Plan x
Aggregates monitoring x x
Duplicate payment audit x x
BPO Outsourcing x x x
Legal Expense Assessment x x x
Telephonic Nurse Case Mgr Assessment x x x
Vendor Management (VMS) x x
Bill Review x
Claim Cirriculum x
Career planning x

86
Claim Management
Create Claim
Service Claim
Comply with Regulation
Legal Management
Manage Internal Policies
Etc…
Manage External Legal Network
Risk Underwriting
Etc…
Ability to create new claim
Etc…
Represents Sub-activities
within each Function
Represents Functions within
the business
Represents Activities within
each Function
ABC Company Claim Business Activity Model Prototype

87
Activity
Function
Activity
Sub-Activity
Function
Activity
Subject
Function
Bus Req.
Subject
Bus Req. Bus Req.
Functional Req. Functional Req. Functional Req.
Increasing
Detail
and
Specificity
Snapshot
Sampling
Data
Snapshot
Sampling
Data
Snapshot
Sampling
Data
Once a common Business Activity Model is created Claim Business Architects will
map the snapshot sampling data to a new activity model and convert the data into a
process view to help identify areas of redundancy and improvement…
ABC Company Claim Business Activity Model Prototype

88
A business process:
1. Has a Goal
2. Has specific Inputs
3. Has specific Outputs
4. Uses Resources
A business process is a collection of activities designed to produce a specific output for a
particular customer or market. It implies a strong emphasis on how the work is done
within and organization, in contrast to a product's focus on what. A process is thus a
specific ordering of work activities across time and place, with a beginning, an end, and
clearly defined inputs and outputs: a structure for decisions and action.
Activity and Process Tracing
Rationalization of business activities (and business requirements) with business processes will provide
several benefits to the Claim Division of Company ABC.
1. The impact of technology solutions designed to service a business requirement mapped to a
business activity and traced to a process will be more easily defined (and controlled).
2. The development of a process view of time distribution will reveal new process efficiencies,
otherwise not known, or too costly and/or cumbersome to identify.
ABC Company Claim Business Process Model (HOW)
5. Has a number of activities that are performed in some order
6. May affect more than one organizational unit; horizontal impact
7. Creates value of some kind for the customer (internal or external)

89
Business
Process
Model
Business Activity Model
Activity
Function
Activity
Sub-Activity
Function
Bus Req.
Subject
Bus Req.
Snapshot
Sampling
Data
Activity
Bus Req.
Bus Req.
Bus Req.
Activity
Sub-Activity
Activity
Bus Req.
Bus Req.
Activity
Bus Req.
Snapshot
Sampling
Data
Snapshot
Sampling
Data
Business Process
Business Process
Snapshot
Sampling
Data
Business Process

90
Activity Remark
Activity Remark
Job Title Responsibility (Job Activities)
 An Activity model defines the discrete work of a business function
 A Process model defines a work flow of an organization
 A Business Architecture (e.g., Claim Model Office) defines the relationships between activities,
requirements, processes, metrics and other attributes of the organization.
ABC Company Claim Business Architecture Relationships

91

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