Providing Value with Business Architecture and IT Architecture
by Daniel Lambert (book a 30-minute meeting)
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Enterprise architecture needs sufficient resources to plan and map proper customer-driven business architecture, but the 3 domains of IT architecture should not be neglected, which are application/service, information/data, and technology/infrastructure.
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The Importance of Value in Business Architecture
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The business architecture domain within enterprise architecture is not just about business capabilities and business processes. It is foremost about optimizing value for your customers and contributing to building a more customer-driven organization.
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Traditionally, business processes have been the principal mean of interaction with business stakeholders for enterprise architects. As for the notion of business capability, it is a more recent concept also often used in enterprise architecture. Business capabilities allow a better understanding of how software applications are supporting the business. Often, some new business capabilities have no supporting applications, while other older capabilities have too many. Both concepts alone fail to capture the value that an agile customer-driven organization must undertake to keep and grow its market share with more and more rapid and continuous innovative changes and more informed customers that are forcing them to have more fluid business strategies.
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The concept of value needs to be mastered and used by enterprise architects in a customer-driven enterprise, as shown in Figure 1 below. An organization usually provides several value propositions to its different customer segments (or persona) and partners that are delivered by value streams made of several value stages. Value stages have as participants internal stakeholders, external stakeholders, and often the customer. Value stages enable customer journey steps, are enabled by capabilities, and are operationalized by processes (level 2 or 3 usually). The TOGAF® Business Architecture: Value Stream Guide video provides a very clear and simple explanation, should you want to know more. Customer journeys are not strictly speaking part of business architecture, but still, they can be very useful to interface with business stakeholders.
Value streams/stages cannot be realized out of thin air. An organization must have the ability to achieve a specific purpose, which is to provide value to the triggering stakeholder, in occurrence the customers and partners. This ability is an enabling business capability. Without this capability, the organization cannot provide value to triggering stakeholders (customers). A capability enables a value stage and is operationalized by a business process. It needs or can modify one or several information concepts. Lastly note that capability is also owned by one business unit or a division within an organization and used by one or more business units or a division, as explained in this article entitled “Providing Customer-Driven Value With a TOGAF® based Enterprise Architecture”.
Practically, value propositions, value streams, and value stages are the ‘Why’ an initiative or a project needs to be done. A stakeholder is the ‘Whom” that needs to participate to create value. The business process is the “How” an organization can create value. Finally, the business capability and information concept are the “What” the organization needs to manage or must have to create value.
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Important Business Architecture Definitions
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Referring often to TOGAF® Standard definitions, each element mentioned in Figure 1 above can be defined as followed:
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Business Process. A business process is a group of related and structured activities made by individuals or equipment, which is a specific sequence that produces a service or product (or serves a business goal or objective).
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Business Capability. A business capability is a particular ability that a business may possess or exchange to achieve a specific purpose. A business capability needs to be supported by applications, systems, and/or IT services.
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Customer. One who purchases a product or service.
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Customer Journey. The customer journey describes the full addition of all experiences that customers go through when interacting in a path of progressive steps with an organization before and after purchasing a product or service. Instead of looking at just a portion of a transaction or experience, the customer journey will document the complete experience of being a customer. A customer journey is comprised of several journey stages.
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Information Concept. Information concepts are standard valuable and agreed-upon business terms and semantics. Information concepts are required and modified by business capabilities. In information technology, data is derived from information concepts.
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Product. A product offered by an organization is a good, an idea, a method, information, an object, or a service conceived as a result of a process and serves a need or satisfies a want of a customer. A product is usually part of a value proposition.
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Stakeholder. An individual, team, organization, or class thereof that has an interest in a system.
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Service. A repeatable activity – a discrete behavior that a building block may be requested or otherwise triggered to perform. A product is usually part of a value proposition.
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Value Proposition. A value proposition is a commitment to deliver value to the triggering stakeholder (usually a customer), who has the conviction that at least one benefit will be received after purchase. A value proposition is made of one or several products or services.
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Value Stream. A representation of an end-to-end collection of value-adding activities that create an overall result for a customer, stakeholder, or end-user. A value stream is composed of several value stages with at least one identifiable participating stakeholder.
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The Three Domains of Information Architecture
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Enterprise architecture needs sufficient resources to plan and map proper business architecture, but the 3 domains of IT architecture should not be neglected. They are 1- application/service, 2- information/data, and 3- technology/infrastructure domains as shown in Figure 2 below.
An application/service architecture or domain describes the patterns and techniques used to design and build an application or a microservice. Data architecture or domain is a framework on how IT supports an organization’s data strategy and how data is acquired, transported, stored, queried, and secured. As for technology or infrastructure architecture or domain, it’s the architecture of the hardware, networks, and middleware that supports the applications and business systems of an organization.
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Today’s application architecture and data architecture need to be ready for speed, flexibility, and innovation. The key to a successful application and data architecture upgrade is agility, as shown in Figure 3 below. Organizations are now moving quickly to deploy new data tools in conjunction with legacy infrastructure to drive client-driven innovations such as more personalized digital approaches, real-time alerts, predictive maintenance, etc. These technical embellishments, including data lakes, client analytics platforms, and stream processing, for example, have hugely amplified the complexity of data architecture. Without a more modern approach to data architecture, the proliferation, and variety of data extracted from just about everywhere in a business’s environment are significantly impeding its ongoing ability to deliver new business capabilities to provide value, maintain current infrastructures, and safeguard the integrity of tagged raw data necessary to build artificial intelligence (AI) models, as explained in this whitepaper entitled “The Importance of a Modern Data Architecture”.
The steady flow of rapid market changes makes it very costly for organizations to wait for a more modern data architecture. Amazon, Apple, and Google among others have been successfully investing in innovations that are disturbing rapidly traditional business models, forcing laggards to reshape some facets of their own offering to keep up. Most cloud providers now offer serverless data platforms that can be used instantly, enabling early adopters to benefit from a faster time to market. Data analytics is now about automated model-deployment platforms enabling quicker use of new models. More and more businesses are adopting application programming interfaces (APIs) to share and synchronize data between disparate systems and applications within their data lakes to have a real-time view of what is really going on in their ecosystem to rapidly understand and integrate new perceived visions directly into their operational applications.
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Extracting Value from Business Architecture and IT Architecture
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By joining information technology architecture to business architecture, it becomes easier to understand how value can be extracted in a customer-driven enterprise, as shown in Figure 4 below.
Figure 4 includes business architecture concepts from Figure 1 with common IT architecture notions, including application, micro-services, master data, application data, and APIs. It explains that an enabling business capability needs to be supported by one or several applications or business systems that includes at least one but usually several microservices. Both Applications and micro-services will require, consult, and modify some application data while automating at least in part a business capability or a service that is included in a value proposition received by a customer. Finally, it is becoming more and more common to have a central master database with one source of truth derived from information concepts needed to operationalize a business capability. Application data will extract and update data with the master data repository using APIs.
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Important IT Architecture Definitions
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Each IT concept mentioned in Figure 4 above can be defined as followed:
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Application. In information technology, an application (app), an application program, or an application software is a computer device software program developed to assist people and/or an organization performing an activity.
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Application Data. Application data represents all records used by a particular application or business system relative to valuable and agreed-upon information concepts shared across an organization.
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Master Data. Master data represents all records used by all applications and business systems of an organization relative to valuable and agreed-upon information concepts shared across an organization.
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Microservice. A microservice is a loosely coupled and independently deployable smaller cloud-native component included in an application or a business system, often using an application programming interface (API), which is a connection between applications or business systems.
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Conclusion
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Extracting value through customer-driven business architecture results in a more adequate modernization of an organization's application and data architecture. This allows an organization to be more agile, flexible, and pertinent in its project delivery. Without a modern application and data architecture correctly linked to a customer-driven business architecture, traditional organizations have a greater risk of becoming laggards and more and more insignificant in tomorrow’s world.