Why is Business Architecture only now finding its way into companies?

Why is Business Architecture only now finding its way into companies?

Companies are turning towards Business Architecture to help guide their transformation. But this isn’t a new idea; Ross, Weil and Robertson proposed the concept of using Business and Enterprise Architecture to shape corporate strategy that actually makes an impact as early as 2006. A quick search on Google Trends also shows peak interest around 2005. So why are organizations across the globe only investing in it now?

Changing the way IT works in an organization

Not only has technology changed; the way IT departments operate within a company has also transformed dramatically. Much of this can be attributed to a shift in viewpoint from inside-out towards outside-in. Whereas it was previously all about value for the company, now business people are looking at the impact on customers.

The importance of the roadmap

Go back fifteen years and you’ll see that it was all about the IT roadmap. Technology projects were usually long term and required substantial investment. This meant the outcome needed to be predictable. Moreover, these roadmaps were conceived from an IT and application point of view. An organization’s IT department would come up with a project, such as creating an app or updating its legacy infrastructure, and then take this idea to the business to seek approval.

Unfortunately, however, the business was often unable to answer these questions. Most organizations struggled to convert their strategic objectives into an actual plan to achieve them, and to clearly describe the impact of any changes on the business. This of course made it difficult to know whether something was a good idea or not.

We’ve changed the way we work

In 2010, we saw the pace of change pick up. Digital transformation became a key point for many companies. Instead of simply launching ideas, value came first and customer-centricity was the prime motivator. We’re seeing value-based processes such as customer journeys becoming more prevalent. Innovation now serves first and foremost to create business opportunities. We’re seeing change or digital transformation happen at three different levels: customer intimacy, operational excellence, and innovation projects. Whichever approach is chosen, they all have one thing in common: there is a measurable business impact.

The need for Business Architecture arises

Digital transformation and its rapid pace have increased the importance of clearly describing the impact. Even more importantly, there is a need to guide change and not let it become transformation simply for the sake of it. Leadership therefore wants business architecture to fulfill this need – both at a strategic level which looks three to five years ahead, and the tactical level which takes into account the next two. As such, companies are increasingly building the capability to clearly describe the business impact of change by implementing business architecture practices.

The five components of a business architecture description

A business architecture can be divided into five levels, each with their own responsibilities. It marries a company’s long-term vision with the short-term agility to deliver current and future projects.

1. Strategy: at this top level, you define the company’s overarching structures, determine the business model, and generally describe your operational organization. This also includes the reason for your company’s existence. What drives and motivates your organization and employees on a daily basis?
2. Capability model: this layer looks at your value chains. How do you deliver value to your customers and what business capabilities do you have for this?
3. Operating model: you need to refine the overarching operating model defined previously, and drill down further into your capabilities. Define how they are organized and which processes flow from, through or to them. What information is required to make these capabilities happen? And what technology do you need?
4. Performance model: you need to define and monitor KPIs and success factors for your business to make sure everything runs according to plan. This is essential to continuously improve your organization.
5. Business Architecture practice: all five levels are part of a Business Architecture, but this part of the description is all about setting up the right governance and assessing an organization’s maturity to make the above happen.

Architecture in an Agile environment

A sound Business Architecture helps companies take back control of their change, although they’re not quite out of the woods just yet. Architecture can be rigorous. But it can be combined with an Agile way of working to give companies the flexibility they need to stay relevant in this day and age. Read all about combining Enterprise Architecture with Agile in our blog here.

The why and what of Business Architecture

On 5 June 2020, we explained the why and what of Business Architecture. Jean-Francois Declercq, Business Transformation Lead at XPLUS, kicked off the session and was followed by special guest  Marc Vandeperre, Head of Enterprise Business Architecture at Colruyt Group.

He shared his insights and experiences in establishing and managing the Business Architecture practice at Colruyt Group.