Business architecture

The term, Business Architecture, is used to refer to a process, model or profession. In these usages, "Business Architecture" refers to the organizing framework of a business, the documents and diagrams that describe that structure or the people who help build such a structure, respectively.

A formal definition of the first meaning is defined by the Object Management Group's "Business Architecture Working Group" as follows:

"A blueprint of the enterprise that provides a common understanding of the organization and is used to align strategic objectives and tactical demands.” [Object Management Group, "Business Architecture Working Group", [http:///bawg.omg.org Definition] ]

= Overview =

Business Architecture defines the structure of an enterprise in terms of its governance structure, business processes, and business information. In defining the structure of the enterprise, business architecture considers customers, finances, and the ever-changing market to align strategic goals and objectives with decisions regarding products and services; partners and suppliers; organization; capabilities; and key initiatives.

Business Architecture primarily focuses on the business motivations, business operations and business analysis frameworks and related networks that link these aspects of the enterprise together. In order to develop an integrated view of an enterprise, many different views of an organization are typically developed. The key views of the enterprise within the business architecture are: 1) the Business Strategy view, 2) the Business Capabilities view, 3) the Business Process view, 4) the Business Knowledge view, and 5) the Organizational view.

The Business Strategy view captures the tactical and strategic goals that drive an organization forward. The goals are decomposed into various tactical approaches for achieving these goals and for providing traceability through the organization. These tactical and strategic goals are mapped to metrics that provide ongoing evaluation of how successfully the organization is achieving its goals.

The Business Capabilities view describes the primary business functions of an enterprise and the pieces of the organization that perform those functions. This view further distinguishes between customer-facing functions, supplier-related functions, business execution, and business management functions.

The Business Process view defines the set of strategic, core and support processes that transcend functional and organizational boundaries. It sets the context of the enterprise by identifying and describing external entities such as customers, suppliers, and external systems that interact with the business. The processes also describe which people, resources and controls are involved in the process. The lowest process level describes the manual and automated tasks that make up workflow.

The Business Knowledge view establishes the shared semantics (e.g., customer, order, and supplier) within an organization and relationships between those semantics (e.g., customer name, order date, supplier name). These semantics form the vocabulary that the organization relies upon to communicate and structure the understanding of the areas they operate within.

The Organizational view captures the relationships among roles, capabilities and business units, the decomposition of those business units into subunits, and the internal or external management of those units.

In addition to the above views of the enterprise, the relationships connecting the aforementioned views form the foundation of the business architecture. This foundation provides the framework that supports the achievement of key goals; planning and execution of various business scenarios; and delivery of bottom line business value.

= Discussion = Business Architecture's value proposition is to increase operational effectiveness by mapping and modeling the business to the organization's business vision and strategic goals.
* Mapping identifies gaps between the current and target business capabilities (underlying processes, people, and tools).
* Modeling discovers business requirements in the area of interest including stakeholders, business entities and their relationships, and business integration points.

Business Architecture and Business Strategy

Business Architecture is directly based on business strategy. It is the foundation for subsequent architectures (strategy embedding), where it is detailed into various aspects and disciplines. The business strategy can consist of elements like strategy statements, organizational goals and objectives, generic and/or applied business models, etc. The strategic statements are analyzed and arranged hierarchically, through techniques like qualitative hierarchical cluster analysis. Based on this hierarchy the initial business architecture is further developed, using general organizational structuring methods and business administration theory, like theories on assets and resources and theories on structuring economic activity. Based on the business architecture the construction of the organization takes shape (figure 1: strategy embedding). During the strategy formulation phase and as a result of the design of the business architecture, the business strategy gets better formulated and understood as well as made more internally consistent.

The business architecture forms a significantly better basis for subsequent architectures than the separate statements themselves. The business architecture gives direction to organizational aspects, such as the organizational structuring (in which the responsibilities of the business domains are assigned to individuals/business units in the organization chart or where a new organization chart is drawn) and the administrative organization (describing for instance the financial reconciliation mechanisms between business domains). Assigning the various business domains to their owners (managers) also helps the further development of other architectures, because now the managers of these domains can be involved with a specific assigned responsibility. This led to increased involvement of top-level management, being domain-owners and well aware of their role. Detailed portions of business domains can be developed based on the effort and support of the domain-owners involved. Business architecture therefore is a very helpful pre-structuring device for the development, acceptance and implementation of subsequent architectures.

The perspectives for subsequent design next to organization are more common: information architecture, technical architecture, process architecture. The various parts (functions, concepts and processes) of the business architecture act as a compulsory starting point for the different subsequent architectures. It pre-structures other architectures. Business architecture models shed light on the scantly elaborated relationships between business strategy and business design. We will illustrate the value of business architecture in a case study

= Standards Work =

The Object Management Group

OMG’s modeling standards, including the Unified Modeling Language™ (UML®), Model Driven Architecture® (MDA®) and the Business Process Modeling Notation® (BPMN®), enable powerful visual design, execution and maintenance of software and other processes, including IT Systems Modeling and Business Process Management.

The OMG established the [http://bawg.omg.org Business Architecture Working Group] (BAWG) in December of 2007 to pursue the development of standards to support the Business Architecture community. The group has begun an effort to catalog business scenarios and to capture a library of business techniques that will be used to isolate and prioritize areas of work. This initiative has as a key part of its mission the interlinking and unification of existing standards to accommodate the demands for integrated end-to-end business analytics. The BAWG conducted a Business Architecture Information Day on September 23, 2008 in Orlando at the OMG's quarterly Technical Meeting as part of an outreach effort to bring interested practitioner and vendor organizations into the standards process.

The Open Group

The Open Group's TOGAF-framework is a community-based effort for describing methods and tools used by architecture. It is being developed and continuously improved by the Open Group, a consortium of interested individuals and companies involved in information technology.

Although the Open Group limits their framework to be used to develop Information Systems only, their framework includes “Business Architecture” as one of the four "domains" of architecture. The other three domains are Application Architecture, Data Architecture and Technology Architecture. TOGAF describes business architecture as follows:

“the business strategy, governance, organization, and key business processes”.

A Business Architecture describes the structural aspects of the business domain instead of the IT domain. TOGAF defines four dimensions, three of which can be considered relevant to Business Architecture: Scope (breadth of the enterprise or across a specific business function from end-to-end), Level of detail, and Time (as-is architecture vs. to-be architecture).

= Frameworks =

eTOM

The eTOM (tmforum.org) has been applied in a variety of industries, like Telecommunications, Banking, Insurance Industry and Franchise Industry. The same basic structure holds, barring the use of industry specific terminology, e.g. core banking system vs. billing system. eTOM together with NGOSS, has taken the best of TOGAF and Zachman and applied that into a flexible business architecture environment adaptable to a wide range of industries.
The core of the eTOM business architecture framework revolves around the SIP (Strategy, Infrastructure & Product), Operations (fulfillment, Assurance and Billing), Enterprise Management (Strategic Enterprise Planning processes, Financial & Asset Management processes, Enterprise Risk Management processes, Stakeholder and External Relationships Management processes, Enterprise Effectiveness Management processes, Human Resource Management processes, Knowledge & Research Management processes). The "raw" business processes are "overlayed" with the Enterprise Management Processes. Balance Score Card or House of Quality, KPI's and RACI's are added as control and measurement elements to the processes, from which the instructional processes are developed. The ideal is to combine common processes and re-map all processes and process-flows accordingly. Such processes are usable as a basis for SOA implementation, in areas of process automation.Fact|date=April 2008

=References=

Footnotes

General References

* Versteeg, G & H. Bouwman. Business Architecture: A new paradigm to relate business strategy to ICT. "Information Systems Frontiers" 8 (2006) pp. 91-102.
* [http://www.research.ibm.com/journal/sj/381/mcdavid.html A Standard for Business Architecture Description - IBM] (circa 1998)
* [http://www.tmforum.org eTOM]

=External Links=
* [http://www.basociety.com Business Architecture Society]