Business Architecture Grid

In some of my posts, I have used the terms vertical and horizontal in relation to Business Architecture. The purpose of this post is to analyse what these terms actually mean.

Firstly, the word vertical is often associated with value chain thinking. Typically, there is a process that spans from the raw materials to the finished product or service, and this process may either be divided between different actors or controlled by a single actor. Where a single organization controls the end-to-end process, this is known as vertical integration.

Large organizations typically have several versions of these processes, or even several entirely different processes. Bunding these into a single organization only makes economic sense if they can share resources and other stuff. For example, if procurement is done jointly, this may give the organization more buying power.

So there are typically a number of cross-cutting concerns, which may be referred to as horizontal. TOGAF 9 (released in 2009) identified "rich domain knowledge of both horizontal, cross-cutting concerns, such as human resources (HR), finance, and procurement alongside vertical, industry-specific concerns" as fundamental to Business-Led SOA.

So one version of horizontal integration involves establishing shared capabilities or services, which may support multiple value chains. Even when these value chains are distributed across different companies across different market sectors, one actor may seek to dominate the provision of these shared services, whether by merger and acquisition, technological superiority, or sheer market power.

In a 2005 discussion on Efficiency and Robustness, Stu Berman commented

The US economy is remarkably resilient to a wide variety of shocks (9/11 is a good example, as is Katrina) due to our horizontal integration rather than vertical. It is easy to look at history and see where colossal economic problems occurred - Soviet central planning, Nixonian gas price controls. via Chandler Howell

I have always argued that Business Architecture requires multiple Viewpoints. One reason for this is that the Activity or Value Stream viewpoint concentrates on the vertical dimension, while the Capability or Service viewpoint concentrates on the horizontal dimension. (Further viewpoints are required, because business architecture is not simply a two-dimensional problem.)

Note that the terms vertical and horizontal also appear in discussions of technology architecture, where they mean something rather different.

 

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Further discussion

Efficiency and Robustness: Central Planning (September 2005)

Business-Led SOA (February 2009)

Towards an Open Architecture for the Public Sector (May 2014)

 

See also

Philip Boxer, The Double Challenge (March 2006)

Richard Veryard, Six Viewpoints of Business Architecture (LeanPub, 2012)