business-architecture

Business Architecture In A Nutshell

Business architecture incorporates the structure of an organization and demonstrates how elements including processes, capabilities, and information fit together. The Federation of Enterprise Architecture Professional Organizations (FEAPO) defines business architecture as a discipline that “represents holistic, multidimensional business views of: capabilities, end-to-end value delivery, information, and organizational structure; and the relationships among these business views and strategies, products, policies, initiatives, and stakeholders.

Understanding business architecture

The Federation of Enterprise Architecture Professional Organizations (FEAPO) defines business architecture as a discipline that “represents holistic, multidimensional business views of: capabilities, end-to-end value delivery, information, and organizational structure; and the relationships among these business views and strategies, products, policies, initiatives, and stakeholders.

Once applied, business architecture bridges the gap between an enterprise business model and strategy on one side, and the business functionality of the enterprise on the other. The relationship amongst elements from each side dictates and specifies what the organization does and how it can realize value by achieving its goals.

Business architectures are built by business architects, who work with senior stakeholders to foster continuous improvement, business transformation, and innovation initiatives. This is a critical role in any organization since only 10% of companies succeed in executing their vision.

Business architecture applications

Business architecture can be applied to a plethora of situations where it is vital corporate strategies are cohesive and aligned across and between business units.

These applications include:

  • Defining a new market.
  • Supply chain streamlining.
  • Divestiture. 
  • Business capacity outsourcing.
  • Driving legacy modernization. 
  • New product or service rollouts in the marketplace.
  • The integration of processes, people, capabilities, culture, and technology during a merger or acquisition.
  • Applying a customer-centric business model to a large enterprise, and
  • Reinventing who a company is or what it does.

Components of a business architecture framework

Business architecture frameworks help the organization connect strategy with operations in a clearly defined way. These frameworks do not impose restrictions on the business architecture itself. Instead, they serve as a foundation that organizations can build upon and customize based on their unique needs and real-world challenges.

Here are a few vital components of the business architecture framework:

  1. Business blueprints – these blueprints enable streamlined and transparent business transformation across multiple business units, stakeholders, and capabilities. Transparency is important in maximizing solution-related investments while ensuring that the success of a business unit does not create problems for the enterprise as a whole. Consider the example of a company requiring users from the same customer base to separately enroll for multiple products. While each product might have succeeded in principle, the lack of a transparent blueprint resulted in a convoluted process and high user dissatisfaction.
  2. Business architecture scenarios – these also provide transparency on specific business initiatives and are applied differently according to the situation at hand. For example, a team tasked with reducing customer churn rate would require different information from one involved in a merger and acquisition. Business architecture scenarios define the collective set of programs, projects, and initiatives that leverage business architecture. Importantly, every scenario has a suggested roadmap for action.
  3. Business architecture knowledgebase – a repository that stores and organizes concise information about the business relevant to its environment. Most corporations have divisions and departments, while governmental agencies may be structured differently and use different terminology. As a result, there are generalized approaches to knowledgebase structure in addition to organizational or industry-specific approaches.

Key takeaways:

  • Business architecture incorporates the structure of an organization and demonstrates how elements including processes, capabilities, and information fit together. Essentially, it bridges the gap between an enterprise business model and strategy on one side, and the business functionality of the enterprise on the other.
  • Business architecture is useful in a multitude of scenarios where corporate cohesiveness and alignment are beneficial. These include defining a new market, streamlining a supply chain, driving legacy modernization, and business capacity outsourcing.
  • Business architecture frameworks serve as the basic foundation upon which a firm can build according to its specific needs and real-world challenges. However, most frameworks incorporate three components: business blueprints, business architecture scenarios, and a business architecture knowledge base.

Related concepts to business architecture

market-analysis
Psychosizing is a form of market analysis where the size of the market is guessed based on the targeted segments’ psychographics. In that respect, according to psychosizing analysis, we have five types of markets: microniches, niches, markets, vertical markets, and horizontal markets. Each will be shaped by the characteristics of the underlying main customer type.
customer-experience-map
Customer experience maps are visual representations of every encounter a customer has with a brand. On a customer experience map, interactions called touchpoints visually denote each interaction that a business has with its consumers. Typically, these include every interaction from the first contact to marketingbranding, sales, and customer support.
customer-journey
The customer journey – sometimes called the buyer or user journey – tells the customer experience with a businessbrandproduct, or service. A customer journey is an alternative approach to other linear models like the sales funnel which hypothesize that most customers follow the same path.
360-degree-feedback
360-degree feedback is a comprehensive performance feedback strategy for employees. Traditionally, performance feedback was solely given by the employee’s direct superior. In 360 degree feedback, however, anonymous feedback is given by a range of individuals that the employee has a working relationship with. These include managers, colleagues, and in some cases, customers.
switching-costs
Switching costs consist of the costs incurred by customers to change a product or service toward another similar product and service. In some cases, switching costs can be monetary (perhaps, improving a cheaper product), but in many other cases, those are based on the effort and perception that it takes to move from a brand to another.
customer-development
Customer development is a formal process of identifying potential customers and determining how to meet their needs using testable hypotheses. Entrepreneur and business professor Steve Blank highlighted the Customer Development Manifesto principles in The Startup Owner’s Manual as the core principles for modern startups.

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