ESSENTIALS OF BUSINESS ARCHITECTURE: Freedom Within a Framework

Introduction

In the Business Architecture Essentials articles preceding this one, I have outlined the attributes of what I have discovered to be required for the work of each perspective or domain to assure high professional quality and integrity. In the first article I referred to the insight of George Box's words: 'All models are wrong, but some are useful'. Our aim is to be useful, knowing we will not get it perfect and that a long and winding journey is ahead of us regardless of the progress we have made. In reality, I have never been faced with the same business scenario or drivers twice and the path has never been the same. It is almost a truism to say that Business Architecture is not an end in its own right but a means to a number of ends, each unique to an enterprise. We must solve a particular problem or meet a need, and each will drive a different journey, albeit using many reusable techniques sitting in a framework that is sufficiently adaptable and available to tackle a specific challenge. This should enable us to use stable approaches where appropriate and to vary when necessary.

Erich Fromm (1900—1980) was a German-born American psychoanalyst and social philosopher who had said in the 1930's:

“True freedom is not the absence of structure — letting the employees go off and do whatever they want — but rather a clear structure that enables people to work within established boundaries in an autonomous and creative way.”

This is a good mantra for practitioners who must be able to prove Business Architecture value within their companies. It is the message that I will attempt to support in this article.

Revisiting the Framework

Process Renewal Group (PRG) Business Architecture Framework

The Process Renewal Group's Business Architecture framework is depicted in Figure 1 below. The diagram shows its main logic.

Freedom-Within-Framework_1

The four phases, and the four sections within, each show a cycle of learning that builds the knowledge up over time but there is no preset starting point, sequence and pre-defined depth to pursue. There is a logic, but the situation at hand will dictate how to go about it.

Working with the end in mind, the overall approach simply implies that you cannot optimally 'Operate the Business' day to day if you have not carefully and effectively built the processes, capabilities, systems and human competencies to do so. It is unusual, however, that we are driven by the goal of architecture perfection for its own purpose.

There is always the need to quickly and effectively continue to improve the mechanisms utilized to conduct daily work and to question the value of what we currently do, given then-current operational circumstances and enterprise priorities. All of these, as indicated by the center circular arrows in each phase, should continually help move the organization forward in an agile way.

Freedom-Within-Framework_2

Moving from right to left, we need to be sure that when we 'Build the Business' we are building the right things. That means we must have ways of prioritizing all the possible things that may need to change so that the transformation portfolio can be populated with the right projects to tackle changes in the required aspects of the Burlton hexagon shown once more in Figure 2. These have to be agreed, estimated and subsequently resourced so that a commonly agreed roadmap will be scheduled, and all types of resources are committed and available when required to pull of the actual changes as defined by project plans. Then, the actual execution of projects can be conducted and controlled by project teams of various hexagon components in play, such as process articulation, technology development and training production among others. As well, the rollout of changes can be accomplished to allow operations using new capabilities to start up and keep going. In reality, there are many ways to go about drilling into the various aspects of the framework based on the issue or opportunity that has justified the architecture development or emphasis.

Framework Concepts

Thw PRG Framework can also be viewed through the lens of a model of key concepts representing the knowledge areas that are may be critical to defining what is required to design the business solution. This diagram represents the types of knowledge that are to be captured. The image in Figure 3 is not to be read from any particular starting point but to be read from one concept box to another by reading the box name and then the connecting box one at a time following the arrow. This is to show the fundamental nature of how to understand the knowledge needed and the logical connections mong the pieces. So, regardless of method, at the end of the day the information in boxes is needed and the connections between each shown pair is established. Again, on tackling the architecture there will be different emphasis on different aspects based on the mandate given to the architecture team.

Freedom-Within-Framework_3
Simplified Business Architecture Concept Model for PRG Framework

The blue colors are generally introduced in the 'Define the Business phase', the brown in the 'Design the Business phase' and the orange in the 'Build the Business phase' although information about any concept can be picked up and enhanced at any point.

The Arguments from Incumbent Professionals

Freedom-Within-Framework_4

From the dawn of professional management, vociferous arguments have waged over the best methods to conduct enterprise level analysis and design. Top-down versus bottom up, strategy versus operations, MBO's versus empowerment are just a few examples. In the business architecture community, there have been angry debates about process-led – usually from the industrial engineering crowd, capability-led – usually from the IT enterprise architects and data as prime – usually from the data quality folks. So, who is right? Well, the true management consultants would utter their time-tested response of 'it depends'. In reality, these all play off of one another as seen in Figure 4. The 'it depends' factor is critical because no one does Business Architecture without some benefit having been expected for the investment made in it. That expectation of benefit will drive the style and approach to its realization. There will be differing degrees of emphasis – process, capability, information – or in some balance in the middling zone. Iteration will occur as each domain informs and validates the other iteratively (agile thinking). So, what are the factors that may get us to get going in a defined initial direction. I will try to answer that question next.

The Drivers for Business Architecture Adoption

The approach you can take to be best served will be determined by examining two perspectives; external and internal drivers.

The External Point of View: Pressures

Freedom-Within-Framework_5

As I have addressed in a different article, the ecosystem of your enterprise is critical to understand to know what is most needed in the content and depth of your business architecture. It is also a major factor in deciding how to go about developing it. Figure 5 illustrates the popular STEEPL approach to examining the outside world and informing a suitable architectural response.

Let's look at each factor to see some illustrations of what a natural architectural response may be for some pressures.

Social

The predominance of a fast-moving younger market may lead to a response that emphasizes the need for continuing data analytics and ready access to timely and accurate information leading to a data-first approach requiring trust in one source of the truth. If your interest is in influencing that market, then you will have to know a lot about those in it and reach them easily with the right offerings based on market insights gained from working with rich data sets about them and the market they are in. The implication is to get your data sorted early since it will be your core asset.

Technological

If your market is financial services, especially in 2020-21 you have to accelerate your move to running with digital solutions and end to end digitalized self-services ASAP. This driver argues for reuse of planned capabilities to shrink the time to market rapidly as well as processes that connect all the dots end-to-end. The technology can then be built and configured to achieve seamless value delivery without long delays in development and implementation.

Economic

At the time of writing, if you are an airline, you cannot survive with cost structures completely out of synch with customer revenue volumes. Survival is a major concern and cost must be taken out to avoid bankruptcy or bailouts. Process will lead the charge because the execution of work is where the money is largely spent, and we have to become more efficient while we are making some other tough capacity reductions.

Environmental

In the time of pandemic, training companies and universities have had to rapidly change their delivery methods and move to virtual delivery for student learning, meaning we have to establish a lot of new education and administrative processes enabled by existing or newly acquired technology for use by everyone including students. Here processes are the key start point.

Political

With persistent political turmoil and an uncertain future everywhere, government and semi-government agencies have to be very flexible, meaning their capabilities must be built for both business and technical ease of re-configuration and their process build for agility. Assuming there is recognition of this reality, capabilities and process are initially both on the table together.

Legal

The flood of regulations and new standards introductions and renewal such as Basel in banking, and IFRS in insurance and GPDR in any industry all require significant changes to data capture and reporting for compliance purposes and punishing penalties for non or mis-reporting. To be able to handle it, we have to build new data cohorts and combinations. Information management is the key first position.

The External Point of View: Natural Tendencies for Industries

The nature of your industry and your marketplace may also bring some inherent architectural style.

There is a natural style that lends itself naturally for certain industries. Although there are exceptions to the pattern, you can expect to find business architects in similar businesses naturally bending towards leading with similar models showing their predominant way of thinking about their models and the value of them.

Architecture Method and Style

I will borrow a phrase from Bruce Silver (ref), a noted though leader in the process and decision management world. Bruce observes that there are a number of ways of approaching professional practices that can be applied utilizing the same modeling notations and tools. Bruce refers to these as 'Method and Style' and some work better than the others. By extension, there are ways to produce high quality model deliverables and ways to do the opposite. There are some industries that are better served by certain architectural methods and styles than others. Again 'it depends'. I am convinced that data-centric, process-centric or capability-centric are all possible initial choices for certain industries.

Data centric

Data-centric is a good style for organizations that have information capture and distribution at the heart of what they do. You could say that data is their core product or is extremely critical and closely tied to it. Social media companies, entertainment distributors, news and knowledge access entities are good examples. In addition, there are organizations that rely almost completely on information to make decisions or manage risk without frequent interactions with external parties. These would include insurance and re-insurance companies that rely on reliable data and algorithms to make risk or loss mitigation choices. Others may include survey and polling firms and rating agencies where data is the basis for selling their services. Recipients of their offerings would be knowledge-oriented decision makers, often with a financial concern.

Process-centric

Process-centric organizations are many. Service oriented organizations depend on highly interactive processes to maintain a continuing dialog and tackle a variety of cases and situations as they evolve. The effective adjustment of the flow path while interacting with outside parties and bringing new information to it requires agile processes. Examples are medical organizations such as hospitals and clinics where the patient journey has to be managed flexibly in the quest to reach the next and often immediate goal. Government agencies providing citizen services are similar, despite the reality that sometimes some of them are not good at what they do. Professional service firms also must be able to execute services in an adaptable manner since the need varies from time to time. Their methods are their processes. Those that process customer information transactions like banks will have a high degree of process orientation as well.

Another type of organization that tends towards a process orientation are those in manufacturing and distribution featuring challenging supply chain risks. Many of these are organizations are actually a network of players that have to be working in unison to deliver physical items ultimately to a customer. This is also true of an information supply chain. This type of organization is characterized by the need for smooth, lean operations and seamless service with the avoidance of delays and errors requiring rework. Food manufacturers and their grocery clients selling to consumers both need great processes to be able work in a just-in-time manner. Time is of their essence. Delivery companies need a process perspective to deliver as promised despite the fact that the item may have traveled through more than one country and seen many distribution centers and transportation hubs.

Capability-centric

Fast change industries certainly need to have a grip on their processes and have quality data, but their driving foundation is typically the capabilities that have to be well defined and built quickly and, most importantly, be able to change easily. Great capabilities can typically be composed into a configuration that can be dis assembled and reused in other configurations. Modern research and development (product-oriented) organizations will strive to design component parts that can be assembled into a variety of distinct products. Think of IKEA and LEGO products as an analogy but apply the same thinking to enabling the business itself. These organizations are driven by speed and ease of change and of avoiding re-invention of enabling resources each time a change is required. Typically, this challenge is share by technology companies with major reuse of system functionality that is configurable to a client problem. Financial service companies are similar especially when they have many lines of business and markets. There is no point having a payment capability that is uniquely defined for each of the Consumer bank, Business bank and Wealth Services organization; a payment is a payment for all. In general, organizations that have multiple lines of business may wish to define common ways of conducting much of the work that is similar using the same capabilities. Telecommunications companies, in addition to needing great customer services processes, are typical of industries that have to change often so would benefit from finding stable capabilities and isolating the variable aspects to avoid changing everything each time. Business Agility is the driver within these industries.

The Internal Point of View

In addition to natural tendencies of particular industries and types of external pressures to prioritize business architectural domains, there are internal reasons why a particular approach may lead. Your fundamental value proposition within a market, your embarkation to a different business strategy and your strengths and weaknesses will also play a role. In all of the industries there is room to differentiate. Not everyone will strive to be the closest to their customers. Some may choose to be more cost effective and unobtrusive instead focusing on price and not on service. There is room for all propositions in any industry. Usually though each organization will have a style that will be close to the industry norm.

Value Proposition

Your main value proposition articulates which orientation your organization is primarily striving to attain in its marketplace. There are three classic ones; operational excellence, customer intimacy, and innovation. Each one provides an implied method and style.

Operational Excellence

Operationally excellent oriented organizations have an unrelenting cost concern and want no wasted effort or time delays in the workflows while assuring that the quality of their products and services are uncompromised. They are passionate about everything being right and that all work is done in the right way optimizing resources. Their focus is all about having no gaps in the workflow and effective handoffs where required. Connecting the Business Process dots is their main concern. Data quality is usually the next concern especially if poor data results in extra work, time and cost.

Customer Intimate

Consumer intimacy strives to get and keep customers for the long run. The lifetime value of the relationship with them is the major intention with each and every customer. The relationship feels personal. In this sense, the products and services may vary over time and any specific product may become secondary. It is more about the strong trust developed between players. Quality of service is paramount. The experience is important – even critical. All employees must exhibit behaviors that show that we have the customer's best interests at heart. To make this proposition work, it is essential we have significant knowledge about the players in the relationship and the appreciate the relevant wants and needs of the customer and deal with them positively and proactively. Deep knowledge based on the customer's place in life and relevant preferences is essential. Data orientation is a normal first concern when you have to know lots about those you are serving. Great processes to keep interactions smooth may also be important. Innovation is not main focus to drive a capability argument.

Innovation

Organizations facing time-in-market and time-to-market pressures must become very good and fast at changing what and how things get done. Those who choose to continuously bring innovative products and services to market as a strategy – think mobile devices – to catch up to or get ahead of their competitors and continually adapt must establish the building blocks to do so. Establishing a set of configurable capabilities – reusable parts of the business – will be the challenge and priority.

Change in Strategy

Organizations these days find themselves rapidly moving into and out of positions of strength and weakness relative to a set of fast-moving external opportunities and threats. They have to examine their strategy regularly and decide on a course of action to renew flagging weaknesses and to turn them into needed strengths so long as they can realize the implementation of the required change in course. Many are reaching out to Business Architecture as a way of formulating a new response. For example, It is not unusual to see organizations decide to implement a new technology to help them. Some have decided to acquire capability through acquisition or corporate consolidation. Some have realized that they must scale the business to be competitive or more cost effective. Some need to be able to comply with new regulations or suffer reputational risks and significant penalties. Some realize they must adapt due to a competitor's actions or new market opportunity or lose it forever. Some are caught in a sweeping industry-wide disruption and must act just to survive. The strategic choice can be proactive or reactive, but the pressure of threat and opportunity are real for everyone. A business Architecture is needed to effectively turn the decision into a solution, but the approach of method and style must fit the challenge. One way is not right for all.

Some Examples of Organizational Strategic Responses

Every situation is of course different, and you have to find the right approach for the situation. As I noted earlier 'it depends'. Additional considerations may be determined by where you are on your journey. You may have been at this for a while and have some aspects well covered. If you are more mature and not just starting out and processes are well established and modeled perhaps moving to reusable capabilities may be in order or vice versa. Also, do not ignore the politics of the organization. Some powerful players may have strong opinions – well justified or not – and that may dictate what is achievable. The following will illustrate several examples of what some chose to attack the business architecture at the time. They have been slightly changed to protect identities.

Regulatory Agency – Business Renewal and IT Replacement

Ecosystem

  • Operates to monitor and assure compliance with regulated products and safe practices based on regulations legislated by government.

Situation

  • Over years, mandated to regulate more and more types of coverage.
  • Each area of coverage has unique rules derived from different legislation, has exercised different approaches to its mandate, and each evolved its own organizational silo.
  • Many essentially similar services and processes were developed differently.
  • IT solutions have used different terminology for similar ideas and ran isolated software solutions despite a common flow of logic.
  • The baseline IT technology release is soon out of vendor support.

Architecture Method and Style

  • Initial focus on a shared strategic intention and KPIs
  • Process Architecture to provide management framework for similar work
  • Information Concept model to build common meaning and normalization of terminology
  • Process Prioritization based on architecture and strategy and roadmap to rollout changes
  • Deep dive into user centric process design and IT requirements for all areas to share

Financial Asset Investment company – Audit and Compliance Rethink

Ecosystem

  • Deals with pension funds invested on behalf of national government and institutional stakeholders.

Situation

  • Strong Enterprise Architecture heritage for IT solutions with strong applications perspective
  • Business processes previously developed but only for functional departments control purposes not aligned to clients of the business
  • Had unmaintainable, detailed business functional descriptions in text documents
  • Essential to show financial and operational risk compliance with auditors and avoid reputational risk to investors.

Architecture Method and Style

  • Initial focus on doing an end to end process architecture in stealth (underground) mode
  • Revisited Enterprise Architecture to incorporate Process Architecture and establish a governance framework for IT work
  • Function by function incrementally gained acceptance for cross functional model of processes with alignment to data lineage across functions due to changing audit needs
  • Gained acceptance by working with the financial governance and risk group and work the processes down to auditable workflows
  • Replaced functional text descriptions with process models, accepted by auditors and process owners

Provincial Justice Ministry – Digitalization for New Citizen Service Offering

Ecosystem

  • Judicial Services for civil disputes for citizens of a Canadian province.

Situation

  • Civil cases were following the same rigorous court-based approach as criminal cases resulting in delays and cancellations
  • Need was recognized to reduce courts bottlenecks (delays and resource constraints) with small civil cases that were the majority
  • Decision was made to handle civil cases through a peer-to-peer digital platform to avoid adjudication
  • Rewrote legislation to enable a new technology platform to enable self service management of disputes asynchronously and virtually.

Architecture Method and Style

  • Initially establish the data needed to guide cases through to resolution
  • Established the Process Architecture and optimized the workflow model of various scenarios and tied to data and evidence creation and usage
  • Role-played scenarios based on various user journeys to validate data structure and process viability
  • Built wireframes and ran prototypes to validate new product
  • Developed complete business model for a new agency to administer the business solution in market

Re-insurance Company – Redesign Operations

Ecosystem

  • Re-Insurance services for life and health insurance companies globally

Situation

  • Company strategy featured significant growth aspirations – outgrow the market
  • Company acquired another player in the industry in a different global region with different processes, data types and structure, and regulations as well as totally different technology support.
  • To gain efficiencies and to scale globally decided to integrate company operations with design for additional acquisitions
  • Concurrently, significant industry regulatory changes announced with massively different data needed and huge penalties for non-compliance in reporting.

Architecture Method and Style

  • Evaluated upcoming data content and structure needs and access to historical records challenge
  • Established the Process Architecture and developed compliant process workflow models for all regions with a global team of business experts
  • Identified required IT capabilities and roadmap for tackling them
  • Developed requirements for each capability group and conducted software assessment for global usage
  • Re-examined roles, processes, data actioned and relevant decision rules

Alignment Among Domains

Regardless of your approach, at some point the domains will come together. This is especially important in defining the integrated solution components of an initiative that will leverage your architecture choices of starting point or emphasis.

The issue is one of connectivity of domains. As depicted in Figure 4, W can make a choice of a prime aspect of the business architecture structure but that choice is still either dependent on or affects choices in other domains. To choose a capability to work on means that you have to know which value streams and processes may use that capability to get work done and what information has to be created or used. Figure 6 indicates the issue we often call the fan out – fan in challenge.

Freedom-Within-Framework_6

In the illustration, our prioritization work identified a specific process as not performing well (red) and of high strategic importance. The challenge is then to figure out what to do to improve it. This process creates some and uses other information. Is the information it uses – created by other processes – of poor quality? If so, do we have to clean up the information at its source? Also, a process not performing well (red) due to a capability of questionable effectiveness? If so, we have to fix or redesign that capability to solve the process problem. Our challenge beforehand, however, is that we have to search out the other processes and information types that use that capability as well. In the redesign we must understand how that capability is used by other domains and redesign it to suit all processes that use it, not just the one chosen, and ensure the integrity of the information no matter where it is relevant. The architecture once fully baked will support such questions and integrations

Conclusion

Business Architecture can provide a rich knowledge set to enable transformation as well as the sustainment of a business's ability to remain relevant and agile. A framework is of immeasurable benefit in taking on the journey due to this complexity. However, it must not be seen as or treated like a cookbook. It is not an invariant methodology. Arguments over practice is a waste of effort and appears unprofessional. There is no right one approach that will always work. I guarantee you that it will always be different each time and so you must be ready for that. A mature business architect will know this and find the way through the minefield of opinions and prejudices that undoubtably will come up. She, despite personal preference, will listen, propose, adjust and ultimately gain agreement for what makes sense given the situation. He will gain consensus of what to include, where to start, how broad and deep to go, how iterative to be, what resources should be marshalled, what is sufficient for the purpose and how to retain the knowledge gained for later leverage as other efforts needs fill out the knowledge base. The development of a comprehensive set of architectural areas concurrently is unlikely to come in one go. Business architecture will require diligence, patience, common sense and a whole lot of judgement and passion.

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Roger Burlton

Roger Burlton

Roger Burlton is Chairman of the BPTrends Board of Advisors and a Founder and Chief Consultant of BPTrends Associates. He is considered a global innovator in methods for Business Process and is recognized internationally for his thought leadership in Business Process Management. Roger has developed and chaired several high profile conferences on Advanced Business and Information Management and Business Process Management, globally.  He currently chairs the annual BPM Forum at the Building Business Capability Conference in the US and the IRM UK BPM Conference in Europe and his pragmatic BPM global seminar series, started in 1991, is the longest continuous running BPM seminar in the world. Rogers is the author of the best selling book, Business Process Management: Profiting from Process and the Business Process Manifesto. He is widely recognized for his thought leadership in business process strategy, business architecture, process analysis and design and process management, measurement and governance.  Roger graduated with a B.A.Sc. in Industrial Engineering from the University of Toronto and is a certified Professional Engineer in the Province of Ontario.
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