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Business Ecology Initiative & Service-Oriented Solution

Michael Poulin

Business Architecture and IBM Component Business Model

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Right by the end of 2009, Marc Fiammante, IBM's Chief Architect WW Engagements, pointed my attention onto the IBM Component Business Model with respect to 'SOMA 3'. Since I am working on the same topic now, it was very interesting learning and I decided to start my 2010 BLOG with comparison of the IBM Component Business Model (based on available materials) and my approach to the Business Model.

Let me start with saying that the IBM Component Business Model (IBM CBM) is classical external view on the corporate Business - "Using the Component Model methodology, our [M.P.: IBM] consultants identify the basic building blocks of your business." As I mentioned before regarding a 'view on', it is always subjective. IBM says: "Each building block includes the people, processes and technology needed by this component to act as a standalone entity". The 'technology' element in each block is definitely a tribute to IBM's primary business while it is not a mandatory part of many business components in reality. The term 'process' also requires additional explanations because it has dual meaning in Business and single meaning in IT; which one has been meant here? And why each business component has to act as a "standalone entity" instead of being a compositions of business components as well (i.e. it cannot act standing alone)?

The IBM CBM appears rather empirical than conceptual. It is not obvious why particular cells present in the CMB matrix if "each component business map is unique to each company", are they common for all enterprises, are they typical to particular industry, and so on. If a company has a purpose and goal(s), how the IBM CBM relates to this purpose, what mechanisms are used for establishing this relationships in company specific/unique business landscape? So far, I am able to find that following advantages are attributed to the IBM CBM:

1) "It represents the entire business in a simple framework that fits on a single page", i.e. it is a convenient 'single look' at the entire Business Model of the enterprise. According to IBM, "After a comprehensive analysis of the composition of each business, we map these individual building blocks, or components, onto a single page". Unfortunately, we do not know how large this page has to be and what requirements are to the viewer's vision abilities...

2) the map contains 'individual building blocks' regardless actual business organisation of the enterprise, i.e. across the administrative boundaries. This is certainly useful if you are interested in finding where you can make a change. However, the map does not reflect potential consequences of the change because there are no inter-dependencies shown in the map


The map structure is quite instrumental:

  • "The columns are created after thorough analysis of a business's functions and value chain"

  • "The top row, "direct," represents all of those components in the business that set the overall strategy and direction for the organisation"

  • "The middle row, "control," represents all of the components in the business that translate those plans into actions, in addition to managing the day-to-day running of those activities"

  • "The bottom row, "execute," contains the business components that actually execute the detailed activities and plans of an organisation."


Nonetheless, I do not see how just described mapping provides for "which components of the business really create differentiation and value", "where you have capability gaps that need to be addressed", and how "you can identify opportunities to improve efficiency and lower costs across the entire enterprise. Identify the components where you can realise the greatest impact". Certainly, knowing what you have is the baseline for further modifications but this map is mute without additional information about corresponding components' values, deltas/gaps to your targets and component inter-dependencies (impacts). As of "opportunities to improve efficiency and lower costs", these categories are simply invisible on such map.

So, what the IBM CBM actually provides beside a convenient single map of consultants' discoveries about your enterprise? Well, it does help you if you do not know what the business values your organisation creates, if you want to move somewhere but you are not sure where you are now, if you have heard that others worry about business efficiency and lower costs and you want the same (you, actually, did not worry about them since you did not know your values and your current position).

In the contrast with the IBM CBM, I am trying to create a view of the Business Model from inside of the company. I have started with the understanding of the enterprise Business Architecture as an organising concept of the Business and proceed to the architecture surrounding environment - business component eco-system. Probably, I will end up with a component matrix very similar to the IBM CBM, I am not at this point yet, but my content of the cells of the matrix are supposed to reflect real internal entities of the organisation. On Figure 1 below, you can see how I position enterprise Business Architecture in the enterprise Business environment.

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Figure 1
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The major point of this incomplete (yet) work is to define Business Architecture as the heart of the business component structure, define its boundaries as well as which component influences others and which components are influenced by it. The Business Architecture in this context is the composition of the business functionality, which is following the common principles of the relationships between business functional entities and created with the guidelines from the enterprise business model, business strategies and market needs. The Business Architecture describes what the enterprise is doing to meet its goals and objectives in the external (market) environment, by who and for whom. Thus, Business Components in the enterprise are viewed from the perspective of business functionality: what components are needed to fulfil the functionality and what components are needed to convert the functionality into the business values specified in the business strategic plan.

Depending on the Business Architecture, which exists explicitly or implicitly in any business organisation, we can select particular set of business component comprising the enterprise as the whole and address its uniqueness. The view from the Business Architecture perspective allows for comprehensive analysis of the component baseline and the gap to the target component structure directed by the business strategy (and articulated via Business Architecture Strategic Transformation), discovery of flexibility problems, setting the directions for innovations and planned new business values in correspondence with the changed business environment.

In short, the IBM CBM is the great answer to WHAT but without WHY and WHAT FOR - enterprise business concept - it is a bit incomplete view on the business component structure, which allows for a misinterpretation.

HAPPY NEW YEAR!

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3 Comments

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Hi Mihael,
Happy new year.

A business strategy (the why and what) has always been viewed in SOMA as a premice to SOA, and business map as a CBM is the result of a strategy and change approach and roadmap which does capture the why.
See the strategy and change consulting approach
http://www-935.ibm.com/services/us/index.wss/bus_serv/gbs/a1005266
However a business strategy looking at the enterprise objectives and business challenges may result in a wide palette of enterprise focus initiatives among which growth strategy, sales and marketing transformation, corporate social responsibility initiatives, pricing strategy, business model innovation often leading to business processes optimization (and we do mean the way business operates and measuring the business efficiency here), organization changes, mergers and acquisitions strategy, application portfolio management, rationalization, etc, etc..

Hope is helps puts CBM an SOMA in a more global enterprise wide roadmap.
Regards
Marc

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Hey Michael

nice thoughts on CBM.

Let's put it in this way: IBM CBM methodology is only one technique to describe an enterprise. The result is indeed a statis view of blocks (components).

Only this view is a restricted view. I like to have the responsibilities, business rules, goals, processes and entities linked to these blocks.

To have a more dynamic look, you can present a high level pocessmodel (business processes) with the components as a solution to support these processes. Then you get a picture a CIO or CEO can read.

Kind regards,
Bernard

I agree, Bernard, static picture is not that interesting as the dynamic one or as a the tendency to dynamic one. Where I disagree is that CEO and, probably, CIO will not be interested in the process in the picture because they do not reflect the goals and objectives; instead, they reflect yesterday implementation based on yesterday business capabilities. Well, it is good to know what you have but the real reasoning of current architecture is about what you need or where we should be.

That is, combining goals with responsibilities, I tend to articulate the architecture in the terms of functions and services aimed to the goals. With services, it is much easier to observe the gap between current responsibilities and business goals as well as business capabilities of the enterprise.

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In this blog, Michael Poulin writes about business and technology ideas, concepts, methodologies and solutions leading to service-oriented enterprise, the primary instrument for obtaining business objectives in fast-changing environments.

Michael Poulin

Michael Poulin is an enterprise-level solution architect working in the financial industry in the U.K. and the United States.

He specializes in building bridges between business needs and technology capabilities with emphasis on business and technical efficiency, scalability, robustness and manageability. He writes about service orientation, application security and use of modern technologies for solving business problems. He contributes to OASIS SOA standards as an independent member and is listed in the the international "Who's Who of Information Technology" for 2001. View more

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