Large and complex organizations are complex enough to manage, as it is, but without a relevant and effective business architecture layer become exceedingly difficult to manage and steer in the right direction. For instance, a simple question like, ‘what must you improve to get competitive?’ for any medium or large sized organization is very hard to answer. One would think executives spend most of their time thinking about and answering these questions, but the reality is very different. It is not the lack of intention that limits them; it is the lack of a framework and structure that can yield valuable & actionable answers.
The issue though is very deep-rooted. Most organizations have a process-view or a department-view of themselves. However, this view is limited in the improvements it can lead to. What one needs is a business function to capability hierarchy and an ability to measure the maturity of each capability.
An organization also needs to assign the business value of having improved or best-in-class capabilities. Let’s be clear about it, no organization has every function best-in-class. More importantly, they don’t have to be best-in-class in everything they do. Business value analysis, a very hard, quantitative look at the value of the capabilities can help identify the priority and sequence of effort.
Business architecture is the bridge between the enterprise business model and enterprise strategy on one side, and the business functionality of the enterprise on the other side.
Business architecture can impact any business function positively. Take finance for example. The executives responsible for the finance functions have three main stakeholder commitments- Efficiency, Trust, Insights.
- That they will run their functions as efficiently as possible – Efficiency
- That they will do so while meeting all legal and compliance requirements and maintaining transparency in operations – Trust
- But finally, and most often forgotten, they owe to the organization a partnership commitment enabling the organization in its go-to-market efforts and providing insights to improve the business – Insights
Business Architecture Steers The Business Towards An Insight Producing Organization
With so many new regulations, frequent new product introductions, new offers, new models most finance functions are running full-steam only to keep up with supporting the business and making incremental improvements in their efficiencies. Most organizations do not get to their critical role of providing insights to guide-the-business.
Business architecture can help in many ways. It focusses attention to what needs done. It manages a capability-road map which when integrated with the corporate go-to-market or other mandate(s) roadmap, produces a well-aligned sequence of activities. It allows organizations to abstract requirements and view capabilities-as-a-service to architecturally align all projects/sub-projects. Most importantly, a good business architecture framework free up executive time to concentrate on insight-producing activities and partnering activities rather than managing and guiding program execution. Only with a little free time to concentrate on more strategic initiatives can the executives really devise and drive the break-away strategies that most businesses need today.