Wednesday, November 07, 2012

The Purpose of Business Architecture

What is business architecture good for? Here are some suggestions.

Designing Organization Structure. Restructuring the organization and reassigning responsibilities are commonly seen as ways of dealing with poor performance, poor governance and other system-wide difficulties. But if the business requirements are not properly understood first, then it can produce massive disruption and distraction with little prospect of any real benefit. This is where a clear business architecture is important. (Advice: Don't try to produce a new Responsibility structure without first understanding Activity, Capability and Motivation.) See my post on Organizational Integration.

Designing Reward Systems. An enterprise has many goals and subgoals. Some individuals and groups and subcontractors may be given incentives to deliver against particular targets. However, poorly chosen incentives can result in dysfunctional behaviour - local success but global failure. The relationship between local performance and global performance is another area where the business architecture

Management Accounting. Distribution of costs, benefits and risks depends on the dependencies between activities, capabilities, resources and other things. See my post On Business Architecture and Management Accounting.

Outsourcing and Procurement. Designing clean, robust and governable boundaries between the company and its suppliers.

Systems Architecture. Design of sociotechnical systems, including information and communication systems.

In many organizations, the most obvious purpose of business architecture is to drive systems architecture. However, this is not the only way that business architects can deliver value.

Historically, a  number of functional specialisms, including accounting, contract management and human resources, developed in an era when business structure was a lot simpler, so functional specialists didn't need to worry about architectural complexity. However, these specialisms may continue to make simplistic assumptions about business structure, and this can result in strategic error and dysfunctional organizations. Business architecture needs to engage actively with all these functional specialisms, to help align their efforts with the real and often complex requirements of the business.

Places are still available on my Business Architecture Bootcamp (November 20th-21st)


Adrian Grigoriu said...

A business architecture is the blueprint of an enterprise, illustrating its business functions and flows.

I would say that one can use a business architecture for an unlimited number of purposes, as many purposes as its many present and potential stakeholders - in HR, Operations, Supply Chain, Strategy, IT, (other) technology functions, Planning and Programmes, Asset Management, Information Management...
The business architecture can be used as well to fix and improve the enterprise operation and roadmap its evolution.

The same goes for any architecture.

Hence, I would say that in truth the key purpose of business architecture is to document the enterprise. How it is used is a different matter, depending on the stakeholder.

John Forrest said...

Business management generally follows the premise of logical structures (groups of people) which facilitate the achievement of outcomes. IT of course relies upon purely logical structures.

A business architect does not offer value by showing how IT structures reflect business structures.

The value is in highlighting the differences between the business management structures and the reality of the complex adaptive organisational system.

Richard Veryard said...

I agree with Adrian that the business architecture can be used to fix things. More generally, I see the purpose of business architecture in terms of solving (helping to solve) some class of business problems, especially those that involve the relationship between structure and behaviour. But I don't agree with his final comment that the purpose of business architecture is documentation. Surely documentation is a means to an end, not an end in itself.

When John talks about "logical structures", I regard the word "logical" as loaded. Clearly different people have very different ideas about what counts as "logical", and what seems perfectly logical to business management may be quite different from what seems perfectly logical to IT. This is why the job of architecture is often described as "alignment" - working out how system logics (such as IT) can be mapped against the business logic.

Gabriel Morgan said...

I feel that Business Architecture, like most architecture skills, is more of a discipline than a 'thing'. That is, a business is best served by applying the Business Architecture discipline to areas of the business that are responsible for capturing business strategy, then streamlining the business to achieve it.

This is why I focus on designing and facilitating Business Performance Management processes within Microsoft. I'm not suggesting that this is the only focus area by any means, however, it's just one that directly aligned to the goal of business architecture I stated above.

Gabriel Morgan said...

I think the purpose of Business Architecture is the application of engineering rigor to the process of Business Performance Management.

Here's a link to an article I posted with more detail: