“There is only one valid definition of business purpose: to create a customer. Because it’s purpose is to create a customer the business enterprise has two- and only these two basic functions: marketing and innovation. Marketing and innovation produce results all the rest are ‘costs.’” – Peter Drucker (Strategic Management Consultant)
This is the mantra that every competent or aspiring Business Architect should hold at the core of their practice of business architecture i.e. creation of value is paramount. Business Architecture is a broad and diverse subject. Even with the help of the BIZBOKTM Guide 3.0 produced by the Business Architecture Guild, the topic is still very broad and technological advances act as a multiplier to the breath and complexity of business today. For the Business Architect this has meant, that where to focus Business Architecture Activity and how to communicate Business Architecture Value in a quick and succinct manner has become extremely challenging.
In a bid to alleviate this difficulty Vayase Consulting has developed the Business Architecture Compass. This is a Business Architecture practice tool that has been designed to provide a short cut value and people centric method for navigating the various aspects of the business architecture discipline. It is free to use for 90 days under the Business Architecture Compass v1.0 Evaluation License. The diagram below illustrates the Business Architecture Compass.
The compass consists of 4 basic elements,
- The concept of “North”,
- The Cardinal Points,
- The Ordinal Points
- And Business Architect Bi-Focus
Business Architect Bi-Focus
The key to succeeding with the Business Architecture Compass is to split the focus of the Practice and of individual engagements in two, basically primary and secondary focus. The rational is that as the Primary focus pivots it’s backed up by a secondary focus which acts as a cross reference and support for the primary activities. Working in this manner ensures that inconsistencies are captured and dealt with early. So for example if the Corporate Strategy is generally misunderstood or not bought into by stakeholders, having a secondary focus that is validating Business Architect understanding then alerts the Business Architects to adjust their activities on Strategy with a view to triggering a communications intervention that will shore up understanding and support for the Corporate Strategy among Stakeholders. Thus when the Business Architects come to now focus Primary on Stakeholders they will have a clear understanding of where they’re stakeholders are in relation to strategy enabling them to optimize activity accordingly.
North represents the fundamental direction that the Business is heading in regardless of size or growth stage. The concept of North encapsulates the two key forms of Value in a business enterprise. These are:
- Corporate Value
- Executive Value
This represents the interests of shareholders and the general business enterprise. This is usually constant through out the life of a business
This represents the direct interests of Executives and can be made up of power, influence or financial remuneration to name a few elements. This understanding is vital to a Business Architect because this represents the Business Architecture sponsor’s interests therefore a clear understanding of what is important to the Executive is a necessary platform for a successful engagement. Hence the label “True North.” It is also worth noting that Executive value is not constant and shifts between Front Line Outputs and Business Change initiatives taking Business Architecture Focus with it.
The generally speaking Corporate Value and Executive Value are usually aligned in some way shape or form, however there is a fundamental difference between the two. This difference is that “What is in the interests of the Corporate Shareholders” is not necessarily “In the interests of Corporate Executives.” Understanding this de-lineation is key for the Business Architect, because this de-lineation carries many cultural and political risks that can in the best case impede in the worst case terminate a Business Architecture engagement or tenure.
The Cardinal Points
The cardinal points represent the foundational aspects of Business Architecture that any Business Architecture practice needs to strive to have in order to ensure it’s continued existence and success.
This represents the strategic elements of Business Architecture as documented in the BIZBOK TM Guide 3.0. Strategy is generally consistently aligned with “North” and is the lynch pin for all Corporate activity
Stakeholders are the other side of strategy because if the stakeholders have not bought into the strategy then the Business Architecture practice is compromised and needs to carefully re-orient to deal with this reality. For the Business Architect a good understanding of stakeholders and their relationship to strategy is vital because stakeholders are the usual source of the political and cultural crosswinds that can either enhance or destroy Business Architecture Activity.
Value streams are the core of Value description within a business and are comprehensively explained in the BIZBOK TM Guide 3.0. Establishing these quickly is crucial for a Business Architecture practice because these are the primary vehicles through which Business Architects will communicate the Value that they seek to bring about through Capabilities when discussing Change with Executives.
Capabilities are the core of Business Architecture and are explained within the BIZBOK TM Guide 3.0. Capabilities provide the lynch pin by which all the other elements of Business Architecture hang together. The key point to note here is that gaining an understanding of Capabilities is fundamental for a Business Architecture practice but not for the Executives or Stakeholders. Capabilities are the focal point for the various mapping and planning activities that the practice will conduct. However for Executives and Stakeholders their view is Value and results driven it is not their job to understand the intricacies of Business Architecture, what they usually need is a clear view of is:
- “What is not working well?”
- “What needs to change?”
- “How might it be done and who will do it?”
- “When and how long will it take?”
- “What is the benefit?”
- And “how much will it cost?” – this being key
With an understanding of capabilities in place that have been linked to the other elements of Business Architecture answering the questions above is relatively straightforward for the Business Architect. This is where the value lies.
The Ordinal Points
The Ordinal points are just as important in that these elements are usually more in place when encountering Greenfield and Brownfield enterprises with respect to Business Architecture. However when setting up a Business Architecture practice Ordinals are best avoided as they carry the strong risk of pigeon holing the practice. For example if the practice starts in Business Change it will be more challenging for the practice to spread its influence across the business because it did not have the initial and visible support from the Executive as an enterprise wide Value Creating discipline that will be coming to a business unit “near you.”
Front Line Value Outputs (Products & Services)
Front Line Value Outputs (FLVO) represent the items that a business will exchange for some form of Value e.g. money with its customers. These are present in all businesses regardless of growth stage or sector. The details of this are comprehensively explained in the BIZBOKTM Guide 3.0.
This is coupled with FLVO’s because organization is usually centered on delivery of FLVO’s. Organization encompasses how stakeholders are arranged to facilitate and contribute to the value exchange. The details of this are comprehensively explained in the BIZBOKTM Guide 3.0.
Business Change (Initiatives)
Business Change is usually present in organizations that are in the Growth or Mature phases of the Business Lifecycle. Business Change encompasses Projects, Programmes and change Portfolios as described in the BIZBOKTM Guide 3.0. Business Change initiatives are usually the final result for a Business Architect as Business Architecture generally drives change within a business and usually supports innovation.
Information is coupled with Business Change because in a lot of instances Business Change will lead to significant changes in information concepts and information flows. This is explained in more detail in the BIZBOKTM Guide 3.0.
The key point to bear in mind with the Business Architecture Compass is that the purpose is to reduce the “time to value” for your and your Business Architecture practise. It will also help you greatly when you are bogged down in Capability Mapping or Capability Based planning with explaining the value you are trying to achieve as well as helping you re-focus on value if you find yourself lost in the depths of an engagement, or blown off course by political or cultural cross winds and event.