Business Architecture: Upwards, Downwards, Sideways, Back

Business Architecture:Upwards, Downwards, Sideways, BackTom Graves, Tetradian Consulting

Business architecture:What’s this about?

What is business-architecture?

Where do we start?

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What isBusiness Architecture?

Business-architecture isthe architecture

– the structure and the story –of the business of the

business.

What is Business Architecture?

Domains typically include business-models, operating-models and

capability-models.Domains in the business-architecture may also

include process-architectures, organisation-architectures, financial-

architectures and more.

Each organisation’s Business Architecture is its own choice of

architecture-domains.

Warning…

It’s a distinct architecture in its own right– we need to understand it as such,and then how it intersects with IT.

Business-architecture is more than“anything not-IT that might affect

IT”!

Where to start: Business-model…

Business Model Canvas and Value Proposition

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Where to start: Business-model…

Business Model Canvas populated, crosslinked

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Where to start: Business-model…

Business-model as descriptive story20/01/2016CC-BY-NC Strategyzr

Where to start: Capability-maps…

Capability-map: Functional Business Model

Accept Orders

Contact Customer

Manage the Business

Deliver Orders

Support the Business

Process Orders

Consolidate Orders

Manage Production

Management

Manage Licensee Outbound Operations

Manage Materials

Receipt and Verification

Manage Facility

Pre-Production Processing

Manage Container & Label StrategiesManage VehiclesManage Equipment and

Equipment-StrategiesManage Facility

Property

Manage Relationship

with Licensees

Manage Asset

Service Providers

Manage Transport Sub-Contracts for

Delivery

Manage NCR-Code Configurations

Define Processing Strategies

Define Performance Management

Manage Production Systems Strategies

Design and Develop Facility I nfrastructure

Manage Production-Planning Strategies

Manage Facility

I nformationManage Core

Business

Manage Post-Production Operations

Setup for Contractor Delivery

Manage Equipment

Maintenance

Manage Production Operations

Accept from

Agency

Accept from

Contractor

Accept at Facility

Accept at Customer Location

Manage FinanceManage Human Resources Manage Facility Administration

Manage Materials Strategies

Prepare Customer Transfer

Support Customer

Bulk Orders

Handle Customer

Complaints & Inquiries

Process Service

Requests

Fulfil Order

Prepare Fulfillment Transfer

Support Bulk Fulfillment

Orders

Handle Fulfillment Complaints & Inquiries

Process Fulfillment Requests

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Where to start: Capability-maps…

Three-tier Functional Business Model

Customer

OutboundInbound

Support

Transport

Process

Check and prepare vehicle

Road Transport Operations

Drop Off Orders & empty containers

Handle vehicle incidents (breakdowns,

re-fuel, etc.)

Capture transport run events

Drive transport vehicle between locations

Pick Up Orders & empty containers

Complete preparation of orders into consignments

Commence carrier service

Carrier staff verify consignment details & hand

over consignment to contractor

Lodge consignments with carrier

Verify / accept consignment Visit "trans-ship" port

Complete carrier service

Receive & verify consignments

Handle consignment exceptions

Separate and store containers etc. in preparation

for transport to facility

Domestic Carrier Transport Operations

Planning & Monitoring of Carrier Services

Determine required lodgement &

handover times

Receive new/ updated schedules

from carriers

Develop & maintain carrier lodgement

schedules

Monitor carrier services & provide corrective action

Assess disputed/late consignments

Transport Facility Management

Time and Attendance

Monitoring & Control

Review Facility Performance & implement

improvements

Planning & Scheduling

Staffing & Rostering

Manage

Stream orders into production

batches

Manage batch containers prior

to pick up

Consolidate Orders

Create & Maintain Facility NCR-Code

Plans

Estimate Production Volumes

Plan & Schedule Production Operations

Staffing & Rostering

Time and Attendance

Monitor Order Processing

Review Facility Performance & imp.

improvements

Corrective Action for Processing

Quality Control

Dock Management

Production Management

Corrective Action for Transport &

Delivery

Materials Receipt and Verification

Inspection of inbound materials

Process “Under Bond” Materials

Process Hazardous Materials

Handover Materials to Warehouse

Licensee Outbound Operations

Inspection of outbound product

Prepare licensee consignment for

despatch

Capture outbound volumes and

events

Despatch outbound product via licensee

carrier

Receive Transfers at Facility

Transfers Damage Check

Slotting / Sequencing

Interleaving

Pre-Mould Verify

Slippage Adjustment

Batch Alignment for Moulding

Pre-Production Processing at

Facility

Capture Processing Events

Prepare Customer Transfer

Plan Transfer Production

Prepare Transfer Data

Prepare Transfer Production

Prepare Transfer Documentation

Support Customer Bulk Orders

Advise customer of bulk-order

issues

Manage Customer Order

Quality

Support customer bulk orders

Handle Customer Complaints &

InquiriesReceive & record

notification of problems

Investigate & resolve problems

Report Status of Order

Handle general inquiries

Process Service Requests

Process Requests

Process Other Requests

Process Payment for Service

Consumable Tools

ManagementSpecify Tools requirements

Acquire & Locate Consumable Tools

Maintain inventory of Consumable Tools

Manage & perform maintenance of

Consumable Tools

Container & Label Management

Specify container requirements

Acquire & Supply Containers

Manage & perform maintenance of

containers

Maintain inventory of containers

Label Policy & Design

Manage Label Stock

Specify vehicle requirements

Vehicle Management

Purchase or Lease vehicles (&

accessories)

Dispose of vehicles

Maintain inventory of vehicles

Manage contracts with fuel suppliers

Monitor payments to fuel suppliers

Manage allocation of vehicles to facilities

Manage vehicle registration &

insurance

Prepare claims for diesel & alternative

fuel grant

Manage maintenance of

vehicles

Design, Specify & Evaluate New

Equipment

Purchase/Dispose Equipment &

Spares

Install & Relocate Equipment

Develop Maintenance

Strategies

Monitor & Optimise Performance &

Reliability

Equipment Management

Ensure Logistics & OH&S Compliance

Manage Equipment Configuration

Manage Technical Documents &

Support Systems

Manage Inventory, Repairs & Stores

Infrastructure

Property Management

Specify Property Requirements

Acquire Property

Dispose of Property

Manage Building Administration

Establish & Maintain Relationships with

Licensees

Manage Relationship with

Licensees

Calculate Revenue due from Licensees

Specify materials requirements

Materials Management

Acquire & Locate Materials

Maintain inventory of Materials

Select & Manage Asset Maintenance Service Providers

Evaluate & select Asset Maintenance Service Providers

Establish & maintain Asset Maintenance

Contracts

Monitor Service Provider performance

Terminate Contract

Manage Transport Sub-Contractors

Maintain Contractor Service Information

Evaluate & Select Transport

Contractors

Establish & Maintain Transport Contracts

Monitor Contractor Performance

Manage Payments to Contractors

Terminate Contract

Select & Manage Agencies

Evaluate & Select Agencies

Establish & Maintain Contracts with

Agencies

Monitor Agencies Performance

Manage Payments To/From Agencies

Terminate Contract with Agency

NCR-Code Management

NCR-Data Strategy, Policy &

Procedures

Maintain NCR Information

Maintain Machine Configuration Data

NCR Configuration Improvement

Manage Machine-Specific NCR Configuration

NCR Code-Sharing Management &

Support

Processing Policy, Procedures & Governance

Processing Strategies

Sorting Strategy & Design

Develop Processing Plans

Measurement of Service Quality

Measure Financial Performance

Measurement of Resource Utilisation

Performance Analysis

Performance Management

Production Systems

Initiate Project

Evaluate Solutions

Finalise Project

Systems support & maintenance

Develop / Enhance System

Implement System

Determine business systems

strategies

Systems control & Administration

Specify Facility Requirements

Model Proposed Solutions

Select & Design Preferred Solution

Plan & Schedule Facility

Development

Implement Facility Changes

Construct Facilities & Equipment

Facility / Infrastructure Design & Development

Production Planning

Determine prod’n strategy & direction

Capacity Planning

Investment Planning

Determine prod’n principles &

policies

Legislative Compliance

Develop & maintain Dangerous Goods

policies & procedures

Production Capability Analysis

Manage Facility Information

Define Costing Reference Data

Maintain Prod’n Structure

Information

Define terminology, & codes

Manage barcoding standards, formats & characteristics

Manage central storage of event

information

Manage inventory of

scanners

Manage central storage of production

volumes

I nternational CarrierTransport Operations

Receive inbound containers at origin

port

Handover outbound containers at

destination port

Transport bond containers from origin port to destination port

Manage Core Business

Develop Business Strategies

Manage business performance &

operations

Co-ordinate Projects

Develop Business Plans Manage Projects

Develop business perf. measures

& targets

Receive Container from Contractor

Drop-Off

Setup forContractorDelivery

Receive Misdirected Container from

Contractor

Deliver Container via Contractor

Record errors & notify customer

Store articles

Verify Customer Pick-up

Handle Undeliverables

(including missorts)

Calculate Priority Delivery Charge

Capture Contractor Delivery Events

Despatch Container for Contractor

Pick-Up

Handle delivery vehicle incidents

Check & Prepare Delivery Vehicles

Document Handover to Transport

Driver

CaptureNon-Contractor Delivery Events

Setup forNon-Contractor

Delivery

Handle Customer Returns

Deliver Container to Customer

Operate Vehicle for Transport Runs

Drop Off / Pick Up at Facility Depot

Establish Production Volumes

Time and Attendance

Monitor Post-Production Operations

Corrective Action

Review Facility Performance &

Implement Improvements

Manage Post-Production Operations

Staffing & Rostering

Plan & Schedule Operations

NCR-Code Updates

Capture Machine Configuration

Changes

Capture Tool Changes

Capture Machine Changes

Capture and Notify NCR-Code Changes

Equipment Maintenance

Plan & Schedule Equipment

Maintenance

Perform & Reord Equipment

Maintenance

Correct & Record Equipment Faults &

Parts Usage

Monitor & Report Maintenance Compliance

Modify Equipment

Optimise Equipment

Performance & Reliability

Handle Non-Valid Orders

Machine Preparation

Moulding

Capture volumes & machine statistics

Prepare agency consignments

Prepare product for road transport

Production Operations

Capture production events

Inward Dock Operations

Initial Preparation

Move Product between

processing steps

Order Configuration

Machine Production

Manual Preparation

Capture Order

Assemble Order

Prepare order documentation

Accept from Contractor

Accept Agency Order

Capture inbound order events

Receive inbound order from agency

Print & apply agency identifier

labels

Reconciliation of agency bills &

orders

Record agency order violations

Handover order documentation to transport driver

Receive Order Lodgement

Accept at Facility

Receive electronic order via internet

Process electronic order via email

Verify Order

Preparation & Streaming

Handle Rejected Orders

Capture Order information

Process Payment for Order

Handover Order to Transport

Driver

Capture actual acceptance

events

Verify Order

Accept at Customer Location

Finance

Provide Financial Analysis & Direction

Support Business Cases

Produce budgets & forecasts

Manage Financial Policy & Procedures

Record & monitor expenditure

Human Resources

Succession Planning Recruitment Maintain employee

recordsOccupational Health

& Safety Operational Training Leave AdministrationStaff Development Industrial Relations

Facility Administration

General Administration

Perform & Manage Stores Function

Manage Technical Documents

Maintain Technical Help Desk

Capture Consolidation

Events

Accept Inbound Requests

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A cautionary tale…

Foiled by financial-architecture?CC-BY-SA foam via Flickr

• Look upward to connect with big-picture

• Look downward to connect with real world

• Look sideways to connect all together• Beware of the pressures to go

backward

Four themes…

Business architecture:Looking upward

What is the broader context for this business-model?

How will the business-model make sense to all of its stakeholders?

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Why anything happens…

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The vision describes the desired-ends for action;values guide action, describing how success would feel.

A tension exists between what is, and what we want

The nature of service…

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A service represents a means toward an end – ultimately, the desired-ends of the enterprise-vision.

Relations between services…

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Services exchange value with each other, to help each service reach toward the respective vision and outcome.

Values and value…

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Each service sits at an intersection of values (vertical) and exchanges of value (horizontal)

Organisation and enterprise…

Organisation“a structure and means to achieve

ends”(bounded by rules, roles and responsibilities)

Organisation and enterprise are not the same!

Enterprise “a shared purpose, a bold endeavour”

(bounded by vision, values and commitments)

Organisation as ‘the enterprise’

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This is almost entirely internal – no-one else involved.

Supply-chain as ‘the enterprise’

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This is about transactions with others, but usually from the organisation’s view first, or only.

Market as ‘the enterprise’

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We start to address the complexity of the market-place – which often includes a more customer-centric view.

Shared-story as ‘the enterprise’

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We engage with all of the complexities of the entire shared-enterprise – the enterprise-as-itself.

A stakeholder in the storyis anyonewho can wielda sharp-pointed stakein our direction…

CC-BY-NC-SA evilpeacock via Flickr

Stakeholders in the enterprise

(Hint: there are a lot more of them than we might at first think…)

Beware of anticlients…

Anticlients arise through deeply-held beliefs, or from perceived betrayal by the

organisation.Do not ignore anticlient-risks!

– anticlients do not transact, but interact in the story in ways that can destroy the

organisation.

Anticlients share the same enterprise, but deeply disagree with how the organisation

operates within that story.

Vision, purpose, promise

This is also about howwe keep to our purpose,and keep our promise……in a viable business, we don’t make promises that we can’t or won’t keep! Proximus, Belgium

A three-part ‘story’ that makes sense to all enterprise-stakeholders

Elements of a vision-statement

Action (‘How’): what is being done toor with or about the concern

Example: “Ideas worth spreading”

Qualifier (‘Why’): the emotive driverfor action on the concern

Example: “Ideas worth spreading”

Concern (‘What’): the focus of interestto everyone in the shared-enterprise

Example: “Ideas worth spreading”

Vision outlines the shared-story…

Principles devolve from values…

Value-propositions must align to vision, values, principles…Vision, role, mission, goal…

Values devolve from the vision…

Connect to the story

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A cautionary tale…

Organisation as enterprise?

Business architecture:Looking downward

How will the business-model be implemented?

What are some of the hidden ‘gotchas’ that could break the business-model?

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Realising the business-model

Use SCORE to identify:- capabilities needed for the business-

model- which can be bought-in or outsourced

- which capabilities must remain in-house- the reasoning behind those decisions

Assemble from capabilities(‘capability’ as ‘the ability to do work’)

Introducing SCORE

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Start with an assertion:Everything in the enterpriseis or represents a service.

(If so, we can describe everythingin the same consistent, fractal way.)

(Business Model Canvas isn’t fractal– it’s linked only to a single high-level

view– so we need to adapt that business-

modelto a more fractal frame.)

Fractality is our friend…allows us to use the same

patternseverywhere, at every level

Business-model to Enterprise Canvas

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From an IT-centric view…

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…but it’s much more than just IT

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Service-content…

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We can view in various ways what services consist of – but eventually we’ll need the full detail.

Service-content…

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At higher levels of abstraction (lists and relations only), we can get away with simple Zachman-interrogatives…

Service-content…

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…as we move towards detail, we must become more specific – yet still fully fractal.

Asset (‘What’)- a resource for which

the enterprise acknowledges responsibility

Composition:any combination of asset-dimensions.

Function (external of ‘How’)- external-facing interface,

responsible for service-contracts, protocols, SLAs, etc;

accepts and returns assetsComposition:

any combination of asset-dimensions.

Location (‘Where’)- a position within the terms of

a specific schemaComposition:

any combination of asset-dimensions,plus time-as-location.

Capability (‘Who’ / ‘How’ / ‘What’)- the ability to do something:

- agent enacts the capability- action asset-type acted upon

- skill-level competence of the agentComposition:

agent / action: asset-dimensions;skill-level: skills/decision dimensions;

also recursively consists of other services

Event (‘When’)- trigger for a function and

underlying capabilityComposition:

any combination of asset-dimensions.

Decision / Reason (‘Why’)- sensemaking / decision-

makingfor the service, and/or its type

of guidance or governanceComposition:

any combination of decision/skills dimensions.

Asset-dimensions…

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Most entities will consist of any appropriate combination– e.g. book is physical ‘thing’, has information, is valued.

Decision/skills dimensions…

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Most contexts will need to include combinations of these.

Working with complexity

Some complexities must be removed, others acknowledged and embraced

Use SCAN to identify:- where complexity exists, in what form- which complexities can be eliminated

- which complexities are inherent (‘wild’)- what techniques to use for each

SCAN for complexity-mapping

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Order and unorder

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“Insanityis doing

the same thingand expecting

the same results”(not Albert Einstein)

ORDER(IT-type rules do work here)

UNORDER(IT-type rules don’t work here)

“Insanityis doing

the same thingand expecting

different results”(Albert Einstein)

certain

uncertain

edge of uncertainty

Same and different

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A quest for certainty: analysis, algorithms, identicality, efficiency, business-rule engines, executable models, Six Sigma...

SAMENESS(IT-systems do work well

here)

UNIQUENESS(IT-systems don’t work

well here)

An acceptance of uncertainty: experiment, patterns, probabilities, ‘design-thinking’, unstructured process...

certain

uncertain

A surgical example…

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patient identity

surgery plan

emergency action

theatrebooking

consumables

pre-op complications

family behaviour

surgical-staff availability

change oftheatre-availability

action-records

equipmentplan

patientcondition

verify identity

NOW!

certain

uncertain

before

SCAN framework summary

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order unorder

SIMPLE(enact)

regulationrotation(rules)

NOT-KNOWN(explore)reframe

rich-randomness(principles)

COMPLICATED(evaluate)

reciprocationresonance(algorithms)

AMBIGUOUS(experiment)

recursionreflexion

(patterns, guidelines)

NOW!

certain

uncertain

plan

actual

before

A spectrum of servicesalso implies

a spectrum of governance:governance of governance

itself.

Backbone and edge

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order(rules do work here)

unorder(rules don’t work here)

fail-safe(high-dependability)

safe-fail(low-dependability)

analysis(knowable result)

experiment(unknowable result)

BACKBONE EDGE

Waterfall(‘controlled’ change)

Agile(iterative change)

Backbone and edge

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Backbone, domain and edge

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order unorder

fail-safe(high-dependency)

BACKBONEsafe-fail

(low-dependency)

EDGE

plan

actual

Waterfall(‘controlled’ change)

Agile(iterative change)

Mixed(guided change)

analysis(knowable result)

DOMAIN experiment(unknowable result)

Pace-layering (and more)Different elements change at different rates – from days to

decades.Different elements have different lifetimes – from nanoseconds to

centuries.Different elements reference other

elements that have different rates of change, and different lifetimes.

It gets kinda complicated…

A cautionary tale…

Do the small details matter?

Business architecture:Looking sidewaysHow do we ensure compliance in the business-model?

How do we guide connection and change?

How do connect to and support the values of the broader enterprise?

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Link services to broader enterprise

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Horizontal value-flow is easier to model, but we need also to support vertical links to enterprise-values

Interrelations between services

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Direction – strategy and tactics

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Direction – management-functions

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Staff-management includes policy, strategy, tactics

Staff-management, line-management

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Staff-managemen

t(looks to future)

Line-managemen

t(looks to past)

Coordination – action and change

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Coordination end-to-end

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Coordination over time

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Coordination – projects and change

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Modes for coordination link to modes for direction

Validation – connecting to values

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Enterprise-values areeveryone’s responsibility.

(Enterprise-values typically include:health-and-safety, security, reliability,

efficiency, effectiveness, financial-probity,environment, ethics and many more.)

Supporting the values

- build awareness of the business-importance of that value

- build capability to enact supportfor that value in real-world action

- assess compliance on and support continual-improvement on that value

For each enterprise-value,we need support-services that:

Investors and beneficiaries

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We need to considerinvestments and returnsof every applicable type,

to and fromevery type of stakeholder.

(‘Applicable type’ is determinedby the shared-enterprise values.)

Always start from the values.

(Not the money.)

Hidden risks of outsourcing

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Boundary-of-control is a legal constraint;boundary-of-identity is where enterprise thinks it is…

Connect values across boundaries

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A cautionary tale…

Playing ‘Pass The Grenade’?

Business architecture:Not going backwards

What anti-patterns do we need to avoid in the business-model and business-architecture?

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Upwards, downwards, sideways…

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the organisation within the shared-enterprise…

…built from services like this…

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…but there are all manner of conceptual-errors that can cause an organisation and its business-model to become

disastrously inefficient and ineffective.

These include…

Business-Design Error #1:“It’s all about us”

Leads to inability to engagewith customers and others,and creates anticlient risks.

Business-Design Error #2:“It’s all about

efficiency”Often leads to local-efficiencies

at the expense ofoverall effectiveness.

Business-Design Error #3:“It’s all about control”

Often leads to attempts to control that which cannot be

controlled– inherently causing frustration

and failure.

Business-Design Error #4:“It’s all about the silos”

Beware of Conway’s Law – it leads to end-to-end fragmentation and

incomprehensible systems.

Business-Design Error #5:“It’s all about the

owners”Over-focus on a single group of stakeholders will increase risks

from anticlients and (many) others.

Business-Design Error #6:“It’s all about the

money”Over-focus on money will distort

all forms of decision-making, and will cause longer-term

failure.

If we focus too much on money, we lose track of the ‘why’ of values.

If we lose track of the ‘why’ of values,

we disconnect from the enterprise.If we disconnect from the enterprise,

there’s no business…Always start from the values.

(Not the money.)

Values-first architecture…

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Money-first architecture…

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The supposed ‘normal’ architecture for businessembeds all of those design-errors, and more…

A cautionary tale…

“Our strategy is last year +10%”

SummaryIn business-architecture:• Look upward

to connect with big-picture• Look downward

to connect with the real world• Look sideways

to connect everything together• Beware of the pressures

to go backward to what doesn’t work

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Contact: Tom Graves

Company: Tetradian Consulting

Twitter: @tetradian ( http://twitter.com/tetradian )

Website: http://tetradian.com

Weblog: http://weblog.tetradian.com

Slidedecks: http://www.slideshare.net/tetradian

Print-books: http://tetradianbooks.com

E-Books: http://leanpub.com/u/tetradian

Example titles:

• Mapping the enterprise: modelling the enterprise as services with the Enterprise Canvas (2010)

• The service-oriented enterprise: enterprise architecture and viable services (2009)

• Doing enterprise-architecture: process and practice in the real enterprise (2009)

Further information: