The Macro Picture
The extraordinary events in the financial markets early in the twenty-first century had a substantial impact on the global economy – almost everyone was impacted in some way, either directly or indirectly. Private and public organizations tightened their belts, reignited their focus on delivering value from their investments and demanded more bang from their buck. But, as the saying goes, ‘Money isn’t everything,’ and characteristics such as a compelling customer experience, innovation and agility have become prominent differentiators.
At the same time, organizations have become increasingly complex ecosystems. Rigid organization structures are being replaced with a network of inter-related, loosely coupled capabilities fused by a common vision – or at least you would hope so! Product and service offerings are now more sophisticated, and the ‘customer expectation’ bar is rising every day. Industries and marketplaces face increasing regulation, introducing constraints on the one hand, and opportunities on the other.
International companies, once ‘holding companies’ for a loose confederation of businesses operating in geographical silos, are now striving to become truly internationalized businesses. New technologies that enable the creation of a systems and informational platform capable of supporting global operations are now breaking down traditional silos and creating integrated businesses. The benefits of rationalization, economies of scale, global customer propositions, franchising and labour arbitrage are driving businesses to become webs of interconnected and integrated service providers in a way that they have never been before.
But that just brings us as far as today. What about the big issues that we face in the future? The growing global economy and globalization increases competition, and that in turn fuels greater innovation. The frequency and potency of technological innovation is likely to increase. Other dimensions also play their part: scarce resources (minerals, water and food) in the face of a growing human population. Ecological concerns are driving organizations to consider total product life cycle beyond sale into product recall and recycle. Demographics is forcing a greater focus on long-term financial planning and commitments. Trading zones and supranationalism are stimulating the free movement of labour and immigration, and social networking is enabling new kinds of democracy.
About Business Architecture
Against this backdrop of change, business architecture is maturing into a discipline in its own right, rising from the pool of inter-related practices that include business strategy, enterprise architecture, business portfolio planning and change management – to name but a few.
But what is business architecture? Ask ten architects and invariably you will get at least ten answers! It is different things to different people, although there is generally common ground about what it aims to achieve. There is no single agreed definition of business architecture, or any other architecture for that matter. We do not intend to offer yet another definition, although we do position ourselves to address this complex topic.
In this book, we view business architecture as a collection of assets, methods, processes and resources that all contribute towards enabling the goals of the organization. Of course, to existing practitioners there is more to it than that, and we address those details, including the purpose of business architecture, its value proposition and what the key assets of a business architecture look like.
Several definitions of business architecture exist:
The fundamental organization of a system embodied in its components, their relationships to each other, and to the environment, and the principles guiding its design and evolution.
Although this is a definition for the architecture of software systems, the core concept is applicable to business architecture. You can replace ‘system’ with ‘business’; the components are the resources (people, technologies, facilities and so on) that collaborate to deliver products and services.
a description of the structure and interaction between the business strategy, organization, functions, business processes, and information needs.
a blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands.
a part of an enterprise architecture related to corporate business, and the documents and diagrams that describe that architectural structure of business.
Each definition is valid, but no single definition is all-encompassing. In this book we aim to push the boundaries by exploring deeper into the discipline of business architecture, for example by addressing the non-deterministic, ‘living’ ecosystem that represents today’s organizations. We also focus considerably on the rationale for using it, and we deliberately take a business-centric perspective in order to shift the thinking away from the IT-centric views that have shaped the discipline to date.
Business architecture is not just for the global operatives; yes, the larger the organization, the more formal the manifestation of its architecture should be. But the ambitions and ideals of a business architecture should benefit all organizations, be they large or small, for-profit or not-for-profit, emerging or established. We must not lose sight of the fact that architecture is a means to an end, and for business architecture the end is the realization of the business vision. But in reality, we also need to consider the journey as well as the destination.
Inside Business Architecture
Business architecture is a complex topic comprising numerous layers. Developing a business architecture for an organization means taking a 360-degree perspective incorporating each of those layers. We do the same for the business architecture practice, and like an onion, we peel away the different layers of the topic. Figure 1.1 shows our Value Creation Model that defines those layers.
Using the VCM, we look at the environment within which the organization and practice operates, and we identify the influences that pose as threats and opportunities. We outline the rationale for getting started, and the value proposition that a business architecture practice can deliver to stakeholders.
Taking this value proposition, we then present the different ways in which the practice can be integrated into the fabric of the organization, identifying ten major stakeholder groups and six major process life cycle groups through which business architects can engage.
Recognizing that one size does not fit all, we discuss the different manifestations of business architecture. We present a Four-level Business Architecture Model, starting with the top, macro-level architecture and working down through to the bottom, project-level architecture. We also discuss the various deviations from this model that we have experienced during our practice in larger organizations. We also discuss the various architecture outputs produced, including, for example, operating models and business architecture descriptions (BADs).
We then identify the business architecture ‘building blocks’ used to construct the architecture outputs: the elements, views and underlying models that describe an architecture.
Achieving a sustainable value proposition means investing in establishing a robust business architecture practice, so we identify the challenges it faces, its critical success factors, the role of a business architect, and the evolution of the practice.
Finally, we discuss some of the prominent architecture resources: the architecture frameworks, reference models and tools available to business architects to increase their productivity and deliver value more quickly to stakeholders.
The organization must support progressive change with minimal impact to business operations. It must also facilitate business-led reconfiguration to enable the timely exploitation of new business opportunities. To achieve this we believe organizations must be created from an explicit business architecture. Current state architecture expresses a representation of the current organization, whether architected or not. Future state architecture represents the envisioned organization in abstract form that is then created in reality via change initiatives (programmes and projects). The VCM provides a framework to optimise the practice of business architecture and to optimize the transition from the current organization to the desired future organization.
Later in the book we talk about engagement principles for the business architect. More than one of those principles highlights the need to establish a common language with which to connect with architecture stakeholders and describe the business architecture consistently. In this spirit, before jumping into the rest of the book we will describe a few concepts and terms to ensure that the meaning and spirit of the text is conveyed in line with that principle.
This book discusses business architecture, but we recognize that the subject matter is as applicable to governmental and non-commercial organizations as much as commercial businesses, hence we have used the terms interchangeably.
Throughout the book we have used the term architecture element to represent any discrete thing that could be used to describe a business within the architecture; we also use the terms element and component synonymously. We use the terms agent, building block and relationship to be more specific than ‘element’: the term agent is used to represent parts of the architecture that may be described as active, initiative, non-deterministic, self-minded, chaotic, natural, social or organic (usually reserved for people, organization units and organizational entities); building blocks may be described as passive, reactive, deterministic, synthetic, technological; we capture important relationships between building blocks and agents: for example, causality, dependency, location, applicability, ownership, command/control, composition, inheritance, or any other meaningful and useful association. Recognizing that building blocks come in different forms and that constructing more sophisticated building blocks is certainly a product of advancing technology, we may qualify building blocks as ‘primitive’ or ‘composite’: primitive building blocks represent base or atomic parts, and composite building blocks represent assemblies of other architectural elements. We generally assume agents to be composite in nature, but we often have no control over that composition.
There is a lot of discussion among business architects of the concept of capability and capability models. We use the dictionary sense of the term ‘capability’: an ability that an organization, person or system possesses to do something or achieve certain outcomes. To describe a capability might mean having to create a composite building block, typically describing why it is required, what activity is, or can be, accomplished (perhaps in terms of services), what resources are needed (skills, knowledge, information, technology), what methods (processes and procedures) are used, what controls are required to manage and govern the capability, and what metrics are used to measure performance.
For the sake of brevity, we have used the term customer offering to mean either product(s) and/or service(s).
We use the term organization unit to represent a real, internal unit within an organizational entity of any size, for example: teams, departments, divisions, subsidiaries and branches. We don’t preclude an organization unit being a legal entity within a group of companies. An organization unit is a kind of agent (see previous definition).
We use the term deliverable and artefact synonymously to represent things that are produced as outputs from the business architecture: for example, business architecture descriptions, reports, analyses and information for publication.
We use the term asset to represent any kind of non-consumable or financial resource to which the organization is reliant for its success.
We use view and viewpoint as described in ISO 42010: a view presents a specific set of architectural information to a standard dictated by the template of the viewpoint. The viewpoint describes the stakeholder (user), the concern addressed by the view (the content) and other aspects such as format and style. Despite the simplicity, these terms are occasionally considered to be confusing. To clarify: a viewpoint is like a lens or filter that you would use to view the architecture; each different architecture or part of the architecture you observe through the lens will give a different view.
We define some other terms in the Glossary.