Many companies are considering or beginning a Business Architecture (BA) initiative. Most likely in the early stages of the initiative, it is treated as “exploratory” in nature or perhaps as a “pilot” project. Various BA approaches are analyzed, articles and books are reviewed and training classes are attended. After some serious examination of the available information, it is necessary to put forward a business case for the “strategic” BA initiative. At the BrainStorm conferences, many attendees are asking “How do you build a business case for Business Architecture (BA)? This is a most difficult question to answer in simple, clear and definitive terms as companies and their “business case” procedures are so vastly different. Nonetheless, this article will provide one some ideas to consider for developing the business case for Business Architecture.
The first idea to consider is that “You Can’t ‘Cost-Justify’ Architecture,” and this point was clearly articulated by John Zachman in an article titled by the same name. The reader is encouraged to closely scrutinize this most excellent article. And of course, this idea applies to the Business Architecture as well since it is an architecture found within any Enterprise Architecture (EA) framework. In this insightful article, one of the several points made by Zachman is that cost-justification is an idea that came out of the 18th century Industrial Age. One has to move beyond thinking of architecture in terms of being “cost-justified” to thinking in terms of architecture as being a “reusable asset” in this, the 21st Century Information Age. This “reusable asset” enables the enterprise to achieve something new, different or great; something that it cannot achieve in its current state. This is the power of architecture and a key consideration in the business case!
Consider the business case for building a new facility such as a manufacturing plant or field sales office. Most likely, it will yield approval based on what it will achieve for the enterprise – an expanding customer base, higher revenue, and/or greater profits – rather than reducing the costs in some specific area of the budget. The day the new facility is finished, it will not deliver any results; it has to become operational, producing something of value for the customers of the enterprise to buy. This new facility is a “reusable asset,” viewed in terms of what it can achieve for the enterprise that it cannot achieve before the advent of the new facility. These are truly significant achievements most likely expected from the corporate strategy.
In a similar manner, the development of a Business Architecture will not immediately yield an expected cost reduction in some specific area of the budget. Its value must be measured in terms of what it enables the enterprise to achieve that it could not achieve before the advent of the BA. This might be the ongoing faster delivery of new products and/or services into the marketplace ahead of the competition. Perhaps it will achieve this kind of outcome by exploiting emerging technologies and/or through better integration, enhancement and alignment of the enterprise cross-functional processes or value streams found in the BA. One most desirable outcome of a BA initiative might be “iPhone like!” For example, a few years ago, Apple brought the iPhone to market, along the way receiving the 2007 “Best of What’s New Award” from Popular Science magazine. Most likely, this was not a “cost justified” type of initiative, but one that delivered a new and innovative product to the marketplace that disrupted Apple’s competitors.
How does one better integrate value streams and exploit emerging technologies to deliver a new product or service to the marketplace ahead of the competition? Without a Business Architecture, this might be quite difficult and costly! One would never let a construction firm renovate an existing office building without understanding its existing architecture. So in a similar manner, why would one allow a strategic initiative to renovate the company without understanding its Business Architecture, and the initiative’s impact on the enterprise and its external environment? Many will also rightly ask “Is the Business Architecture Really Necessary?” In an article by the same name, this author asked the reader to run an exercise with several executives to see if a commonly accepted model of the enterprise exists or if one is generally understood throughout the enterprise. It is a safe bet that no commonly accepted model of the enterprise exists for analysis of strategic initiatives. If the reader doubts this statement, then run the exercise mentioned in the article and see what results!
How can the C-level executives evaluate the priorities of strategic initiatives without understanding the impact on the whole enterprise through analysis of the Business Architecture? What architectures, models or reference materials are the executives currently using? If one believes the executives require an enterprise blueprint or a Business Architecture for these purposes, then undertaking a BA initiative makes sense, but not from the point of view of displacing costs as Zachman noted, but by providing an enabling capability that does not currently exists in the enterprise or business unit. The BA enables the executives to view the enterprise from a commonly shared point of view; from an architecture of the business developed from the customer’s perspective; a view not available to the typical enterprise for analysis. Understanding this blueprint represents a new opportunity for the enterprise and another consideration for the business case!
With this new architecture, the Business Architecture, one must also consider its structure, organizing principle and purposeful reason for existence, and that is a focus on the customer realized from the enterprise value streams. James Martin, author of The Great Transition, defined a value stream as an end-to-end collection of activities that creates a result for a “customer.” It has a clear goal: to satisfy or to delight the customer. ”Customer Centric Behavior and the Business Architecture” must coexist in the model used for strategic analysis. Here again, one can achieve something new, different or great with the BA that it cannot achieve in its current state; that of viewing the enterprise or business unit through the eyes of the customer. And of course, the focus on a client, consumer, guest, passenger, patron, citizen, end user, and other similar terms are just as valid as customer. Instead of viewing the enterprise in terms of its organizations, functions, or its products and services, it views the enterprise in terms of its profit generating source and reason for existence, the customer! After all, that is how the buyers of the enterprise’s products and services view the enterprise and this idea deserves consideration for the business case as well.
In summary, this author can only provide a few ideas to consider for making the business case for Business Architecture since there is no established or proven template to follow. And, do not make the mistake of trying to “cost-justify” architecture as described by Zachman as it just will not work! ”The Real Reason To Build A Business Architecture” will come from a compelling vision, not necessarily from rows and columns of numbers in a spreadsheet. Do consider making the business case for Business Architecture based on achieving something new, different or great that the enterprise cannot achieve in its current state. The risks of cost overruns, delayed implementations, and failures are just too high! Overcome these risks with the BA by providing a commonly understood and shared architecture of the business through a generally accepted and widely used model. And with the BA focused on the customer, it is possible the enterprise will achieve something new, different or great; just maybe that new iPhone!
