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| 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
| 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
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• Practitioner career lifecycle
management
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• PAYG payroll services
• Learning forums
Skills Uplift for Organisations &
Individuals
• TOGAF® 9.1 Certification
• ArchiMate® 2.0
• Advanced / Applied EA
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• Solution Architecture
• BPMN
Strategic Relationship With
Corporate Clients
• Strategy & Architecture Capability
Improvement
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outcomes
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| AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 33
Twitter @eatraining
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| AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 34
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| 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
| 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
| 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
| 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)
| 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
| 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
| 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
| 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.
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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”
| 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
| 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
| 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
| 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
| 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
| 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”
| 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?
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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”
| 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
| 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
| 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
| 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
| 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
| AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 353
The Business capability anchor model – Overlays:
Strategic Alignment
| AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 354
The Business capability anchor model – Overlays:
Business Capability Maturity
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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
| 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)
| 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
| AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 372
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An Introduction into the design of business using business architecture

  • 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. | 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. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 33 Twitter @eatraining Email craig.martin@enterprisearchitects.com
  • 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 353 The Business capability anchor model – Overlays: Strategic Alignment
  • 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | 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. | AN INTRODUCTION INTO THE DESIGN OF BUSINESS USING BUSINESS AR CHITECTURE | ENTERPRISE ARCHITECTS © 201 372 Questions?