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Adrian Grigoriu

The Business Model Canvas is neither ontology nor business architecture, it is a value chain

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Is Alex Osterwalder's Business Model Canvas, BMC, an ontology or a (business) architecture as it is sometimes claimed or... something else?

To start with, BMC cannot be both a (business) architecture and an ontology. That is, assuming that an architecture is a model then and ontology is a metamodel of the architecture domain under scrutiny.  BMC is either one or the other.  

Whatis.com states that "an ontology is the working model of entities and interactions in some particular domain of knowledge or practices." 

A first question is then, what is the domain which the BMC is an ontology for? Without that, we cannot proceed with the ontology assumption. It does not seem to be the enterprise since there too are many missing elements.

But let's take the Customer and Supplier, parts of the BMC canvas, are they elements of an enterprise domain? 

Imagine only an enterprise like Microsoft whose customers represent a generous section of the individuals and companies of the world. Had the enterprise included customers, then it has to include the customers of the customer enterprises, and so on. Not to mention that a Customer is a Supplier too, which  another element of the BMC. What would the final enterprise footprint look like then? If it could be ever drawn, it would appear like a giant picture of all the companies in the world.

Well then, we have to eliminate Customers and Suppliers as part of an Enterprise ontology.

I can continue to argue for each element of the BMC but I won't do that here and now.

There are a number of other BMC versions that exhibit different elements and even links. But the links have not been ever specified. They have loose meanings. In any case, the BMC model in use looks like the Windows 8 start screen, that is a number of boxes without interconnections. That might have been the reason it was called a canvas in the first place rather than an ontology or an architecture which exhibit meaningful interconnections. In practice, one just fills in the boxes of the canvas. Links are not necessary.

Also we do not fill in ontologies, or metamodels for that matter, like we do fill in the BMC. 

Some BMC representations feature connections in a kind of general  boxes and lines diagram that could denote any diagram, for example a flow one rather than an ontology which might look more like an entity relationship diagram.

Rather than continue on this path, let me state what BMC does represent in my view. It is a basic product value chain. Take for instance SCOR's (Supply Chain...) Source - Make - Deliver.

The BMC shows the flow 

 *  beginning with Sourcing from Suppliers
 *  to Making activities and resources
 *  and Delivering to Customers through channels

Now this a thing I can work with. I can see how the Business Models are implemented on an enterprise value chain. I can map a business model on an enterprise architecture that describes its processes and resources. I can calculate then the costs, the revenue and as such the value proposition of the Business Model. Moreover, Porter's Value Chain exhibits an element called margin. This would be the profit of the BMC value proposition. 

Could the BMC illustrate then somekind of a basic value chain flow diagram then? It could and it does in my view. 

But then, is it a business architecture?

No, because there are more value chains in an enterprise. Resources are not part of a business architecture but of an enterprise architecture that includes technology and people. 

But you can map the BMC on an EA described by GODS-FFLV for instance which exhibits both a generic business architecture and an EA framework. The BMC elements can be easily identified then on the EA, the path through the EA drawn and the costs and revenue calculated.

  
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Adrian Grigoriu blogs about everything relating to enterprise and business architecture, SOA, frameworks, design, planning, execution, organization and related issues.

Adrian Grigoriu

Adrian is an executive consultant in enterprise architecture, former head of enterprise architecture at Ofcom, the spectrum and broadcasting U.K. regulatory agency and chief architect at TM Forum, an organization providing a reference integrated business architecture framework, best practices and standards for the telecommunications and digital media industries. He also was a high technology, enterprise architecture and strategy senior manager at Accenture and Vodafone, and a principal consultant and lead architect at Qantas, Logica, Lucent Bell Labs and Nokia. He is the author of two books on enterprise architecture development available on Kindle and published articles with BPTrends, the Microsoft Architecture Journal and the EI magazine. Shortlisted by Computer Weekly for the IT Industry blogger of the year 2011.

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