Eba beyond theory v6 notes

Beyond Theory Business Architecture

1

Trained over 100,000 professionals

Completed over 1,400 requirements projects

In excess of 700 Organizations using our methods

Annually invested 10% of our

revenue in developing our methods and harmonizing these with industry best practices

Authors of The Business Analysis Benchmark

Worked with over 300 of the

Fortune 1000 companies Founding member of the IIBA

> 200 trained

professionals focused 100% on excellence in business requirements

Contributing Author to the BIZBOK ™

Learning Objectives

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Provide clear, rational reasons to do Business Architecture

Provide a filtered set of Business Architecture Models, views and uses to mitigate project and analysis risk Suggest a staged Execution Model

Business Architecture – Beyond Theory

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Topics

What’s Going On?

What’s the Effect?

How do we Respond?

Standards

Business Blueprints

Blueprinting Lifecycle

Technology Impact

Focus – Biggest Bang


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Change

What’s Going On? Forces at Work

Cost Revenue


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Costs and Convergence

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2006 2007 2008 2009 2010 2011 2012 2013 2014

Cost

Revenue

Revenue Pressure: Market Meltdown Customer Expectations Speed to Market Regulatory Constraints Workforce Attrition Competition

Cost Pressure: Transformation Infrastructure Maintenance New Projects Application Constraints Legacy demise Survival

Direction: What’s the Effect?


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How do we respond?

Efforts to drive the convergence in another direction

Don’t be complacent

Enterprise Architecture


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Business Architecture

Standards

Blueprint Models

Functional Models

Process Models

Impact on Technology


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Consideration for Intellectual Capital as an Asset and corporate memory

Relating Business Architecture to only IT

Historical approaches to solve business problems

Historical approach to funding models

What’s the Challenge? What value am I getting?

Changing Viewpoints

IT Understanding of business priorities & motivations

Organizational maturity to innovation and transformation


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An

alys

is R

esu

lt

Business Change- How Big? Competing or Complimentary Strategies?

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Bu

sin

ess

Str

ate

gy

Competitive Requirement

Cost reduction focus

Limited expected revenue increase

Business case may support transformational strategy.

Reengineering

Redesigning of the business process to meet market or competitive needs or increase efficiency/effectiveness of the current business operating model.

Business As Usual

Continue forward with marginal deployment capabilities

Keep the Lights on

Optimization

Redefining the business process to eliminate localized operational challenges

Future State

Market differentiation involving significant corporate will.

Requires policy change, product rationalization, resource rightsizing

Long term in nature.

Transformation

Radical, large scale change in the business operating model and the product or service delivery


Standards

• Open Group

• BPMN

• OMG Industry

• Ontology versus Glossary

• Verb and Event taxonomy

• Common Understanding

• Cross pollination of business concepts and requirements

Common Language

• Integrated with Business Process Management

• Integrated with Business Analysis techniques

• Governance

Methodology and Approach

• Repository Management

• Compliance Management

• Scalability

• Analysis capability

Tooling


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Business Blueprints

A blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands.

BAWG – OMG

Component Business Model: Human Capital Management


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Construct of a Blueprint

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Sales & Marketing Products & Services Operations & ProcessingRisk & Financial

ComplianceStrategy & Governance

Market Research &

AnalyticsProduct Development Resource Planning Regulatory Advisory Business Strategy Mgmt

Customer Mgmt

Strategy

Product Research &

Analytics

Operations Policy &

ProcedureAlliance Planning

HR Planning &

Governance

Segment Analysis &

PlanningChannel Mgmt Channel Mgmt Risk Mgmt

Programme & Change

Mgmt

Marketing Mgmt Business ContinuityFinancial Accounting

& Reporting

Regulatory &

Compliance Policy

Brand Mgmt Information Tech Decision Support Mergers & Acquisition

Sales & Contract

Monitoring

Product Catalogue

Mgmt

Central Service

ManagementBalance Sheet Project Mgmt Office

Relationship MgmtProduct & Service

MonitoringVendor Management Credit Oversight Audit

End to End Service

Level Perf MonitoringChannel Performance Statistics & Measurement Legal Advisory

Business Policy

Oversight

Authorization/ApprovalsRisk & Financial

Control

Compensation &

Benefits

Auth & Limits Delegation Financial Data MgmtRegulatory Compliance

Monitoring

Client Acquisition &

Referrals

Transactional

ProcessingCustomer Data Mgmt

Accounts Payable /

ReceivablesProject Cost Acct

Contact Mgmt Order Mgmt Statement Prep InvestigationsLearning &

Development

Compliant Mgmt Document Mgmt Collections &

RecoveryRegulatory Reporting

Prospecting & Sales Credit ProcessingCredit Approval &

ProcessingBusiness Procedures

Campaign Execution Fees & Billing MgmtFinancial

ConsolidationM&A Due Diligence

End Consumer Sales Payments Tax Reporting Vendor Mgmt

Strategic

Control

Execute

ILLUSTRATIVE

Product Performance

Mgmt

Campaign

Management

Pricing Policy

Channel Delivery

Mgmt

Product

Configuration Mgmt

A blueprint is constructed to reflect Business Competencies and Business Capabilities.

The capabilities are tiered by Strategy,

Control,

and Execution

to demonstrate a type

Opportunity Identification

Direct

Execute

Control

Bu

sin

ess

Ad

min

istr

ati

on

Marketi

ng

Asset

Mg

mt

&

Prod

uct

Develo

pm

en

t

Sale

s &

Ch

an

nel

Man

ag

em

en

t

New

Bu

sin

ess

Cu

sto

mer

Servic

e

Con

tract

Fin

an

ce

Bu

sin

ess

Ad

min

istr

ati

on

Marketi

ng

Asset

Mg

mt

&

Prod

uct

Develo

pm

en

t

Sale

s &

Ch

an

nel

Man

ag

em

en

t

New

Bu

sin

ess

Cu

sto

mer

Servic

e

Con

tract

Ad

min

istr

ati

on

Operations Planning

Service

Management

Contract &

Policy Set-up

Channel

Management

Campaign

Management

Alliance

Management

Product Management

Manufacturing Planning Distribution

Planning

Operational Control

Financial

Control

Accounting

&Finance

Planning

Asset &

Liability

Management

Funds Management

Trading

General

Ledger

Treasury

Claims

processing

Contact

Servicing

In-force

Processing

Check

Processing

Contract

Administration

Correspondence

Intelligent Routing

Contact

Repository

Customer

Profile

Fees &

Commissions

End - customer

marketing

Campaign

Execution

Product Development

Sales

Support

Product

Profile

End -

Consumer

Sales

Conservation

Human

Resource

Business

Planning

Management Manual

Regulatory

Reporting

Training

Council

Services

Systems &

Facilities

Helpdesk

Advisor/

Intermediary

Administration

Advisor/ Intermediary

Set-up

Wholesales

gaps gaps

gaps

Gaps – opportunity to implement new IT systems where none exist before

duplication

over- extension

deficiency

Deficiencies - the system lacks key functionality, or is poorly designed

Duplication – multiple systems compete for the same need. Opportunity for consolidation

Over-Extension – a system designed to support one component is extended beyond its core capability to help support others


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Methodology For Use

Business Strategy – Ensure project spend aligns

Synchronization of Business / IT transformation efforts

Project identification/rationalization- duplication, funding, resource

Technology portfolio decommissioning

Outsourcing Opportunities

Customer Segmentation Initiatives

Target Business Operating Model: Where and How?

Value-based prioritization and implementation strategy developed with consideration for budget, resource constraints, competitive market pressures and other factors.


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Strategic

Total Costs of Ownership Analysis

Spend Control and Funding Models

Shared Services

Strategic Vendor Sourcing

Scorecard based business strategy alignment

Acquisition and Mergers

Impact


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Blueprinting Lifecycle

Advantages

Visual improves ability for stakeholder sign-off

Well defined processes, terms and definitions

Acceleration in identifying reusable processes and rules

Consistent language

Logic is contained within the process

Each Capability is underpinned by a number of Business Functions

Each Function is in turn supported by a range of Business Processes

Each process collaborates across a set of activities and tasks to compete the business objective

The lifecycle employs methods, tools and techniques to develop agile and integrated business perspectives that provides traceability and alignment between levels.


Note: Copyright IBM Corporation 2006 17

Business Capability Models


Business capabilities are the highest level of business architecture

construction design and are market facing

Each Capability

• conducts a mutually exclusive, collectively exhausted (MECE) set of activities to achieve its business goal.

• require resources, people, technology, knowledge and assets to support activities

• is managed as a independent entity, with its own governance model

• provides and receives business services

• Produces or consumes work products from/to other capabilities in the organizational ecosystem

• is individually scalable and extensible.

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Business Functional Models


Business functions performed by an organization

Derived from the Business Blueprint

Next level of the Business Architecture deconstruction

Describe the functions which must be available for the

organization to meet its objectives

Models are available from the market

Can be constructed from the Organizational Charts.

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Business Modeling Core Process Models


Don’t make bad things happen faster

Start and End with a customer

Eliminate non essential steps, reduce cycle time and thru put time,

identify Automation opportunities, organizational

distribution/centralization

Must be expressed to enable Transformational change

Identified in project context by the use of Top Down Blueprint and

business function models

Baseline business case cost

Processes are where all the business requirements are .

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Strategic Impact

Use of the Functional Model will identify organizational redundancy and overlap.*

Opportunity for significant FTE reduction using Broad Banding and Span of Management standards and statistics

Investment projects mapped to the capability model will identify potential collision and identify direct and indirect stakeholders

Projects using the model will identify in scope business processes and business impact


*Note: Business Consulting Best Practice: “Form follows function” 21

Impact on Technology Current State Future State

Business Modelling

• Inconsistent approach to Requirements Management

• Methodologies are customized for each initiative

• Reuse is not easily visible

Req’ts Definition

• Terminology is inconsistent • Business rules and logic are disconnected from

the process • Difficult tracing process to Req'ts • Req'ts not well maintained

Analysis & Design

•Disconnect from business on requirement definition

•Modeling is not completed efficiently •Difficult tracing req’ts to usecase to process

Coding

• Coding is not derived from a design model • Coding is not clearly traced to Req'ts

Business Modeling

• Well defined process, terms and definitions

standard across all projects.

• Acceleration to identify reusable processes, rules and interdependencies

• Improved ability for stakeholder sign-off

Req’ts Definition

• Consistent language

• Logic contained in the process

• Requirements managed thru standard configurable tools

• Use case models to be used for Analysis

• Contracted definition phase through reusable artefacts and focus on net new

Analysis & Design

• Consistent language

• Logic contained in the process

• Requirement structure is standardized.

• Utilization of use case models

• Contracted phase through reusable artefacts

• Focus on net new

Coding

• Coding is driven from the model

• Enforces object oriented development approach

• Clear relationship between Req'ts, design and coding.

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Reduce Application Redundancy – Capability Model

• Eliminate duplication

• Reduce risk exposure

• “End of Life” legacy

• Identify required unsupported business capability

Eliminate Organizational Redundancy – Functional Model

• Identify Business units with same/similar functions to minimize redundancy

• Identify Core vs shared services

• Identify Cross business unit dependency

• Apply spans of control across functions

Core Processes – Prioritization

• Lifecycle – Open, Maintain, Transact, Renew, Close

• High Volume, High Costs, Low Revenue

• Expose Shared Services, Utilities, Black Boxes

• Scalable Business Services

• Target Scorecard Measurement

Focus

Asset Management

•Manage Knowledge as an asset through a Central Knowledge Repository •Rich Intellectual property exists

for scenario or project early analysis


Biggest Bang

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Increasing organizational capability and reuse while contributing to cost management, quality and risk

Value Business Architecture – Beyond Theory

Manage Costs

• Increase productivity and reduce costs by standardizing processes and capitalizing on economies of scale

• Improve the process first before you automate

• Apply functional alignment and spans of control analysis

• Understand capability performance through KPI’s and benchmarking

Quality

• Improve quality by deploying & using industry standards and methods

• Govern compliance to embed quality methods & standards

• Be customer centric

• Ensure methods and collateral is integrated, consistent and coherent across stakeholders and partners

Manage Risk

• Programme/Project Risk mitigate by holistic business impact analysis and change control

• Investment Risk – mitigate by aligning funded projects to strategic capabilities (Tear up the Road Once)

• Regulator Risk – mitigate by aligning the design and implementation to standard processes

• Development Risk -mitigate by clearer articulation of business objectives and requirements

Reuse/Opportunities

• Assess performance & discover new organizational capabilities

• Standardize processes to reuse “Fit for Purpose” technology by application of standards

• Assess the Investment portfolio for reusable common business components & functionality across programmes

• Control project cost by reusing deliverables ie: processes and UC .

Questions

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800.209.3616 PDU Information

1 PDU Activity Number: IAG 701 Provide Number: 2858