Business Integration with Enterprise Business Architecture
By Ralph Whittle
Today, corporate executives have access to numerous business and technology opportunities for improving performance. Some deal with the integration of business and technology while others deal with technology alone. What is motivating these executives to consider the possibilities promised by these performance improvement initiatives? Most likely, these executives are coming under increasing pressure to deliver more with less, while increasing profits and cutting costs. Some have the luxury of developing strategic initiatives based on the corporate vision, while others are struggling with the pain associated with cost overruns, delayed project completions and excessive technology costs. Many executives are chasing an illusive business model, one that changes more rapidly and is further compounded by an equally illusive supporting technology model.
For example, say you are the brand new CEO of a mid-cap company. If you ask the COO, the CFO, the VP of Sales, the VP of Human Resources and the CIO to come to a meeting with a business model of the enterprise, what do you think they will present? It is a safe bet that each will present a different model of the enterprise. Most assuredly, each will present accurate information, and compliment their discussion with a rich and descriptive dialogue. However, each will present a somewhat different view of the enterprise, just as the children’s story of the blind men describing an elephant.
If each executive were to post their respective model on the wall, it is doubtful that one model will illustrate relationships with the other models. Their verbal descriptions might explain the relationships, but unless you record their conversation, most is lost after the presentation. The new CEO will never glean an understanding of the enterprise by simply reviewing the models posted on the wall. The models are probably not consistent and not rich enough in semantics and syntax to precisely describe the complexity of the business. If you do not believe this, then just try it as an experiment and see what happens!
In order to build any complex thing, such as a house, ship, airplane or enterprise, you must have some sort of formal model of its structure or architecture, developed through a deliberate, disciplined engineering approach. Models and architectures are requisite for houses, ships and airplanes, but are virtually non-existent for enterprises though just as mandatory. If they do exist for an enterprise, most likely the models are not integrated, but presented as separate parts of a disconnected whole. What do you get if you run the experiment suggested above? Perhaps it will be a marketing presentation, and, once you get past the attractive high-level slides and overheads, you will find very little useful substance that can be used in research, analysis, and design. The models and architectures that do exist are usually out of date, not integrated, unavailable to the typical business and IT manager, and consequently are seldom used or exploited when undertaking a major new strategic initiative.
How then does the new CEO choose which performance initiative to undertake even if the corporate strategy is sound and up to date? What is going to enable business integration? What is the common repository of information used in strategic initiative exploration and selection? Many will say it is a model of the enterprise or the business model as defined in the strategy. But, what is this model and what information does it provide? As just stated, most likely this model does not really exist in the form necessary for use in conjunction with the strategy. If one does exists in the strategy, most likely it is too high level for any thorough scrutiny.
What we need is an architecture of the business, one that is representative of the enterprise, understood by the business designers and users, and enables business integration. The best way to summarize and represent the business for analysis is in a model built using a rigorous and disciplined approach. In addition, the building of a business architecture from the customer centric perspective enables corporate leaders to view the enterprise holistically. It puts the customer first, above the internal politics and functional silos. The models illustrate the alignment and formal links between the strategy, vision and corporate objectives, with the strategic initiative roadmap. Finally, it establishes the metrics, measures, and expectations for success from this customer centric view. When the initiatives from the consequent strategic roadmap are implemented, the results provide a clear competitive advantage and improve stakeholder value.
Therefore, we need a formal model representing the business as a manifestation of the strategy; an Enterprise Business Architecture (EBA). The Enterprise Business Architecture defines the enterprise value streams and their relationships to all external entities and other enterprise value streams and the events that trigger instantiation. It is a definition of what the enterprise must produce to satisfy its customers, compete in a market, deal with its suppliers, sustain operations and care for its employees. It is composed of architectures, workflows and events. *1 1 A value stream is an end-to-end collection of activities that creates a result for a “customer,” who may be the ultimate customer or an internal “end user” of the value stream. The value stream has a clear goal: to satisfy or to delight the customer.*2
Structuring the enterprise around a core set of building blocks, called “value streams”, is one of the key enablers or precepts to enterprise wide integration. The value streams (sometimes called core processes) contain the cross-functional processes and ordered sequence of activities that produce results from functional organizations. The value streams are customer centric and designed around the effective and efficient delivery of results, outcomes, products or services. A capability not afforded by viewing the enterprise in terms of its functions. The value streams are purposeful encapsulations of the results of optimized processes that are connected by the balanced and leveled, inputs and outputs of the processes. You connect and integrate business processes in an architecture model by using the inputs and outputs as the nexus or “causal link.” Ultimately, the results of the value streams are linked to the defined and measurable outcomes of a strategic objective.
Having connected the logical EBA to the corporate strategy we must continue its integration with any major initiative that is defined in the strategy. The strategic initiative may require process improvement, IT architecture build-out, software development, package software configuration, security architecture analysis and organizational architecture development. The EBA approach lets the business person define all of their requirements and business rules in one model and in terms that business people understand and use. It requires the process analysts, software developers or enterprise architects to extract their information needs from this base of shared knowledge rather than having the business person create different sets of specifications or views for each strategic initiative or project. We must understand the EBA’s role in the enterprise, and treat it as part of a unified whole rather than as an isolated part or component.
The formality and discipline of the EBA may frighten some business people and others may feel it is unnecessary. After all, an architecture including one of the business may seem “too structured, too engineering like, and too technical for a business person!” Many still prefer the informality of loosely defined diagrams and business models presented in colorful and creative presentations. However, these are mostly useless during the life cycle of a strategic initiative, because they provide little “substance beyond the show” and frequently fail to deliver the expected results.
From the holistic perspective, we can build the Enterprise Business Architecture, which contains all of the enterprise value streams that integrate all elements of the business; people, processes and technologies. These value streams are tied to the strategy and corporate objectives through the various metrics and measures that determine success. From the efficient workflows found in the value streams, you link to any strategic initiative using a common model built with an architectural discipline. Many strategic research and analysis firm have recognized the importance of integrating the EBA with its supporting IT architectures and they have frequently reported on its increasing value to successful companies. Used properly as a management tool, the EBA can create opportunities for improving enterprise performance. An approach worth serious analysis that can enable the visionary executive to deliver more with less, while increasing profits and cutting costs!
*1 Ralph Whittle and Conrad B. Mryick, Enterprise Business Architecture: The Formal Link between Strategy and Results (CRC Press 2004), 31.
*2 James Martin, The Great Transition: Using the Seven Disciplines of Enterprise Engineering to Align People, Technology, and Strategy (American Management Association 1995), 104.
About the Author
Ralph Whittle is co-author of a book titled, Enterprise Business Architecture: The Formal Link between Strategy and Results, CRC Press 2004. He is a Strategic Business/IT Consultant and subject matter expert in Enterprise Business Architecture development and implementation. He has built Enterprise Business Architectures in various industries, such as manufacturing, healthcare, financial, and technology. He has worked in the IT industry for over 26 years, conducting engagements in enterprise business process modeling, strategic/tactical business planning, enterprise business requirements analysis, enterprise business architecture and IT architecture integration, strategic frameworks integration with systems development methodologies and IT service offering enhancement. He is a co-inventor of a patent (currently pending) for a Strategic Business/IT Planning framework. You can contact him at rwEBAauthor@enterprisebusinessarchitecture.com or visit his web site at www.enterprisebusinessarchitecture.com.