System Transformation Portal

The Critical Role of Business Architecture

William Ulrich, Tactical Strategy Group, Inc.

Business architecture is the ongoing practice of visualizing and aligning organizational governance structures, business data, business processes and business rules across the extended value chain. While business architecture is an evolving collection of disciplines, organizations that formalize business architecture as a vehicle to understand and align core and peripheral business disciplines can benefit substantially.

Business architecture allows an organization to envision and articulate the essence of their organization while creating tangible ways to align business architecture with IT architecture. Business architecture enables a business to visualize, analyze, redefine and reengineer the way it functions and communicates internally, with business partners and with IT. Specifically, any enterprise that is retooling, reorganizing, realigning or otherwise streamlining its business and/or IT infrastructure can benefit from formal business architecture. Several key areas of focus include:

• Governance Architecture & Alignment
• Virtual Enterprise Architecture Alignment
• Business Process & Rules: Management & Synchronization
• Business / IT Architecture Alignment
• Synchronizing Business Architecture Disciplines

Governance Architecture & Alignment

There are two types of enterprise governance models. There is the formal organization chart, typically made up of boxes arranged in hierarchical structure, and there is the actual governance structure, which is not documented but comprises the real DNA of the enterprise. The formal organization chart is made up of formal reporting structures that span business unit silos. It is, at best, a way to assign and track responsibilities and, at worst, a way to discourage collaboration and protect fiefdoms.

Business architecture encourages the acknowledgement, visualization and alignment of �shadow� governance structures that reflect real world collaboration and infrastructure. This includes the use of collaborative organizational models as well as exposing and reconciling functional redundancies, inconsistencies and other pathologies that hinder efforts to streamline operational efficiencies and effectiveness.

Governance modeling and visualization dovetails with efforts to synchronize and align business process, business rule and business data modeling initiatives. This is because it is essential for an enterprise to understand how it is aligned or misaligned organizationally in order for certain business process and business rule initiatives to succeed. Governance must also align with the extended or �virtual� enterprise architecture.

Virtual Enterprise Architecture Alignment

Business processes, rules and data collectively flow beyond the bounds of the formal enterprise, spilling into business partner, supplier and outsourcing domains. However, the inability to understand or articulate internal flows, particularly as these flows extend to the hundreds or thousands of touch points to external entities, can stymie an enterprise�s ability to streamline and manage the virtual enterprise.

Documenting the extended enterprise is best accomplished from a business architecture perspective that can reconcile or accommodate redundancies from a more strategic perspective. These visualizations can synchronize internal governance structures, processes, rules and data in ways that allow for the increased streamlining of supplier / partner relationships, elimination of costly and error prone redundancies, and the flattening out of overly complex process flows across the virtual enterprise.

Business Process & Rules: Management & Synchronization

Organizations are overflowing with models. This is true not only within IT but more recently within various business units. As various business units and project teams expedite efforts to deploy process models, rule representations and data models, they must identify ways to address the overlap and interdependencies among these models. If this does not occur, standalone business models will become increasingly redundant, disconnected and irrelevant.

Consider a situation where an enterprise has three separate business units, all of which have responsibility for managing billing and customer support functions. Now further consider that a corporate strategy involves documenting, retooling and automating business processes and business rules with the goal of increasing overall efficiency and effectiveness. Each business unit will invariably create models that contain and expose redundant, inconsistent processes, rules and data.

Without higher level models to role up these granular views to an organizational level, segregated teams may never realize that these redundancies and inconsistencies exist. This in turn could torpedo subsequent retooling efforts while further disrupting downstream activities such as functional consolidation and IT architecture alignment. Business architecture provides the disciplines to allow management to collaboratively synchronize representations of processes, rules and data via high-level visualizations.

The visualization aspect of business architecture is particularly important. The process of exposing redundancies also exposes inefficiencies. A large telecommunications company exposed redundancies through bottom up analysis of business processes that were then rolled up to a more strategic level.

This approach allowed executives to streamline and consolidate business roles in a way that contained employee growth even as the enterprise expanded its revenues. This had a direct benefit of facilitating revenue growth while containing the costs of delivering this additional revenue.

Business / IT Architecture Alignment

One important benefit of business architecture involves the articulation of business requirements to IT and the provision of formal support for business / IT architecture alignment. In many organizations, it is painfully apparent that IT and the business community that IT services are poorly aligned. In some cases, business and IT are almost at odds with each other, thinking that each has a better understanding of what the enterprise requires and how to deliver on those requirements.

Visualizing the as-is business architecture and formally articulately how the business architecture must change to support business strategy is key to driving changes in IT architecture. IT architectures include data and applications that are, even in the best managed IT organizations, highly redundant, heavily segregated and not fulfilling many basic business requirements. In addition to studies confirming this claim[1], one only needs to consider how many businesses work around formal IT systems using spreadsheets, PC databases and manual workarounds to see an example of business / IT misalignment.

Consider the previously billing unit example. It is likely that the three redundant billing units align with redundant billing applications and data structures. IT cannot and should not launch a data and application architecture consolidation initiative without aligning disparate business data, rules and processes across these business units.

Business units, however, can work with IT to formalize a common set of business models that IT can use to establish a data and application architecture consolidation roadmap. In the absence of business architecture formalization and alignment, IT is merely fishing for the right solution without knowing if they are going in the right direction.

Synchronizing Business Architecture Disciplines

Business architects and analysts are practicing business architecture today, but tend to work from the bottom up without employing comprehensive business architecture representations. Process modeling tends to start at very granular level, as does business rule analysis, while ignoring governance issues. There is a clear need for strategic paradigms that can be used to facilitate the consistency, synchronization and deployment of these business modeling disciplines.

It is interesting to note that the practice of creating low level models without tying these models together parallels the growth of architecture within the IT industry. In the 1970s program design paradigms emerged and were followed by systems design paradigms. Over the past 25 years, IT architecture concepts matured into increasingly more comprehensive representations that support high-level visualization as well as the ability to drill down to more granular views within that same architecture. Business architecture must meet these same requirements � only from a business perspective.

Business architecture not only raises the visibility and understandability of cross-disciplinary business models, but ties together disciplines that have been evolving independently. Consider that business processes and business rules tend to evolve independently and lack a formal connection to business data.

Business architecture is the glue to bringing together cross-disciplinary models in ways that facilitate holistic approaches to streamlining governance structures, process, rules and IT alignment. Business architecture will take on an increasingly vital role in leading enterprises in coming years.