Technology, Business, & Architecture
Business Architecture Framework for Digital Transformation
An introduction and overview for beginners
Note to the reader: This article is an excerpt from my published book titled Agile Business Architecture for Digital Transformation.
To create effective business architecture for complex digital transformation programs, we must follow an established yet innovative framework. A framework is a basic structure underlying a business and technology system.
The framework can start with understanding the organizational structure of the business. This framework can include multiple considerations and business viewpoints. Business organizations are made up of stakeholders with different roles focusing on common goals.
This point takes us to the second key component in the business architecture framework: stakeholder awareness. There may be many people with varying roles and responsibilities undertaken by the business, technical, operational, and partnering stakeholders in the digital transformation programs.
It is one of our critical responsibilities to analyze our business stakeholders carefully and methodically. As business architects, we must precisely analyze our business stakeholders and document their roles, responsibilities, concerns, expectations, requirements, and aspirations.
Business organizations can have multiple capabilities. We can categorize these capabilities broadly under services and products offered to customers for generating revenue and growing business.
Related to revenue and growth, we also need to understand the incurred costs and profits gained from these business capabilities. Our understanding of business capabilities can help us establish a fundamental business architecture framework supporting digital transformation goals.
We all know that every business must generate revenue, control costs, grow strategically, and cannot survive without profit.
Apart from business capabilities, we also need to carefully consider business value streams. Business value streams can relate to both internal and external stakeholders. External stakeholders are usually the customers of the organization.
In the simplest terms, business value streams refer to the value gained from the customers based on products and services that the business organizations provide. Business value streams are also known as business value propositions.
We must analyze the value streams and map them to the future state of our business architecture framework by considering our organization’s business capabilities, vision, strategy, and tactics.
This critical focus brings us to the next significant component of the business architecture framework, which we call business vision, strategy, and tactics. These three critical business terms are interrelated.
Every business initiative starts with a vision that sets the future state. Understanding business vision helps us to set business strategies. Business strategy is supported by business tactics which are small stepping stones to the strategy.
These relationships between the vision, strategy, and tactics must be crystal clear in our business architecture framework.
The next core factor in our business architecture framework is business information. Every business organization generates and owns various information types and systems at the organizational level.
Business information can include facts and can be generated from data from various systems in the organization. In many business organizations, information not only establishes the communication and operating processes but can also be a critical asset in making the products and services for the customers.
Therefore, business information can be considered an important capability and fundamental business value proposition for our organization.
Our business architecture framework must consider the projects and initiatives of the organization. The main goal of these projects and initiatives is to enable business products and services for our customers.
It is important to note that projects and initiatives are particularly structured, and they can be seen as practical approaches to creating our business value. Projects and initiatives manifest as products and services of the organization. To reiterate, products and services are the major business capabilities.
Other important factors that we must consider are business events and decisions created by projects and initiatives. A business project life-cycle can consist of many business and operational events and require various business decisions related to marketing, sales, financial, political, and commercial aspects.
As business architects, we need to understand these critical aspects.
Our business architecture framework must also factor in governance requirements, including policies, rules, and regulations. These are fundamental business management factors to govern the internal and external aspects of our business and financial processes.
Governance relates to all aspects of a business organization. For example, effective stakeholder management requires a flexible and functional governance model.
And last but not least, from governance and administration perspectives, our business architecture framework must consider considerable amounts of metrics and measures to complete the whole picture.
To summarise and reinforce these critical points, our business architecture framework must include organizational structure, stakeholders, business capabilities, value streams, information, vision, strategy, tactics, projects, initiatives, events, decisions, products, services, policies, rules, regulations, metrics, and measures.
I redefined and detailed the new roles and responsibilities of business architects within digital transformation programs in my latest book titled “Agile Business Architecture for Digital Transformation.”
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