Business Architecture and the Strategic Enterprise — Its Place in Strategy
Introduction
Business Architecture is an essential business-level blueprint for digital transformation of an enterprise. There are a number of definitions, but only a handful of ideas are published around this subject in terms of its constituents, implementation, and how it should be pursued in a pragmatic sense in industry. Although it is important to understand these different views, do expect to hear about them in a separate post in detail. This article is the first of the series of articles on Business Architecture. It highlights my idea of business architecture developed from practice over the years in terms of its position in strategy, its role in digital transformation, the different types and the importance.
Business Architecture in the Strategic Enterprise
Business Architecture (BA) is an essential blueprint of an enterprise’s strategic business that precedes the implementation. It provides critical guidance to bridge the process of business strategy planning and strategy execution. As shown in figure 1, business strategy drives the entire enterprise, which then fuels the information technology (IT) strategy and organization strategy at a high-level. Further, the IT strategy and organization strategy influences each other and must be adjusted to work in unison with the business strategy.
Every time the business strategy changes, the business architecture must change to reflect the exact needs of the business. This dynamic ability to change and cascade relevant changes to the subsequent strategies (IT and organization) is easily enabled by the business architecture.
Let’s look at a different perspective of business architecture in the strategy process. Figure 2 shows the place of Business Architecture in the overall strategic plans of an enterprise. An enterprise has business goals and direction set out for the long term which are achieved through the corporate or business strategies. It has been set out after careful consideration of the internal and external influences and a thorough strategic analysis of the company’s current position. Accordingly, business architecture sits in between strategy formulation and strategy execution, takes the former as an input and feeds into the latter.
Importantly, the internal and external environmental changes of the business impacts the changes to business architecture. Whelan (2014) states that it “serves to facilitate change and the identification of change work packages (programmes or projects) necessary to take the organization from where it is today to where it wants to be in the future, following a defined roadmap”.
At the bottom, the information and communication technology plans, process level plans and organization — that is, functions, teams and people plans fall into place to realize this business strategy through the Business Architecture. It must be noted that these artifacts are still at the planning stage but provide a little bit more detail than the strategies which are more abstract. For instance, if the company’s product is at its centre, the information and communication technology may discuss the information strategy, technical architecture, and security plan.
Business Architecture sits in the middle of these two levels and receives its’ inputs from the business strategy. Careful analysis of the strategic capabilities and values form the basis for this architecture. The primary influencer is the internal and external changes in the environment in which the business operates. It’s important to note that the Business Architecture may consist of one or more abstract illustrations or be presented as several artifacts. However, they must seamlessly be connected to one another.
Role of Business Architecture in Digital Transformation
Business Architecture is a key driver in digital transformation initiatives in corporations, primarily contributing to business-technology alignment. According to a number of researchers and practitioners, it has been identified as being a crucial component in the planning stages of the projects along with enterprise architecture practice (Lambert, 2018). Gartner recognizes Business Architecture as a mandatory requirement and not optional in digital transformation projects. The key benefits of having the business architecture in place for such projects include:
- Better investment decisions
- Increased value for money
- Faster, lower cost and more consistent delivery
- Reduced operational risk
- Improved agility
- Increased flexibility
- Optimized change portfolio
- Improved business change requirements
Types of Business Architecture
There can be two types of Business Architectures in digital transformation projects; that is of the current state of the business and the desired or future state of the business. Ideally, in digital transformation projects the enterprise should design the future state based on business goals for the next period of 5 to 10 years. Such business architectures are designed for greenfield projects while those that require current and future states are more concerned with brownfield projects, because the gaps between the two architectures helps to identify misalignments with strategy.
Importance of Designing a Business Architecture
“Digital Transformation without a Business Architecture is just like a House without an Architecture”
Architectures are critical in the construction industry to build the underlying structure and ensure its longevity. Imagine that you are building your dream home. An architecture is the nexus between your dream home and making it reality. In other words the bridge between the house plan and execution. If you really give it a thought, would you let a contracting company build your house without first reviewing the blueprints with you? No one would let the contracting company dump the materials and source people to build a house without a well-designed blueprint. It is the same with building an enterprise architecture. However, we take the business architecture for granted and conveniently skip it in the process of building an enterprise architecture (Whittle and Myrick, 2003). In such situations consequences are severe and the cost of rectifying such results is high. Hence, it is important to give due consideration to business architecture at the outset of the digital transformation projects, just like when a house is planned and designed before it is built.
With that we come to the end of this article, but not the business architecture series. Look forward to more discussions in my future blogs.
References/ Bibliography
- Brand, S. and Blosch, M. (2019). Toolkit: Construct Business Architecture Deliverables that Deliver Value to Business Leaders. Gartner Research Inc.
- Barnett, G. (2019). Enterprise Architecture in 2020 and Beyond. Forrester Research Inc.
- Barnett, G. (2016). Business Architecture 2020 — Evolving to Influence Business Strategy. Forrester Research Inc.
- Lambert, D. (2021). ‘Digital Transformation using Business Architecture’. CIO.com. October 2018. Available at: https://bit.ly/3uTIAZv (Accessed: Feb 2021).
- Versteeg, G. and Bouwman, H. (2006). Business Architecture: A New Paradigm to relate Business Strategy to ICT. Information Systems Frontiers.
- Whittle, R. and Myrick, C. (2003). Enterprise Business Architecture: The Corporate Nexus — Understanding the Missing Link between Strategy and Results. Enterprise IT Solutions LLC.
