Business driven architecture is an approach to strategic transformation that involves confirming the business strategy context, understanding how the business wants to operate through its business model and operating model, and performing impact analysis to understand how changes will affect business capabilities. The approach bundles proposed changes into initiatives, builds a case for change and risk for each, and develops a sequenced multi-year roadmap. It requires collaboration between business and technology experts to ensure strategic objectives are properly translated into operations and technology.

1. www.pwc.com/us/
Business Driven Architecture for
Strategic Transformation
July 18, 2011
David Baker
Principal, PwC
Proposition Leader
Strategy & Business Design
david.c.baker@us.pwc.com
+1.512.554.9035 (mobile)

2. Businesses face some typical challenges attempting to realize
the value locked in their business strategy
Inadequate level of Difficulty in identifying
clarity in the business “customer experience” or
strategy “market” needs
Difficulty in
Overwhelmed
translating Difficulty in quantifying and
with complexity
strategic objectives assigning responsibilities for
of ongoing
to operations and business benefits and costs
initiatives
technology
7/18/2011
PwC 2

3. These Business Architecture approaches are key to mitigating
those challenges
Confirm the way the
Confirm the full context business wants to operate
of the business strategy – products, services and
operating model
Trace the impact the
Define the Define a multi-
business strategy and
business year sequence of
operations have on the
capabilities activities
business capabilities
7/18/2011
7/18/2011
PwC 3

4. The first step is to confirm the context of the business
strategy
To achieve alignment, we must first:
Internal & External Drivers
• Understand the factors that motivate the
Makes business
operative
Vision Mission
Statement Statement
• Extract and drive additional detail into
Amplifies A component elements of the business plan
of
Channels • Clearly articulate the Ends – things that
Effort
Goals Strategies the business wishes to achieve
Quantifies Implements • Clearly articulate the Means – things that
the business will employ to achieve those
Objectives
Channels
Effort Ends
Tactics
& Metrics
In this way, the business plan becomes
ENDS = Desired MEANS = Courses the foundation for connecting
Results of Action solutions to their business intent
Terms and relationships adapted from the Object Management Group’s
Business Motivation Model, Release 1.3 7/18/2011
PwC 4

5. You can use several methods to engage the business
leadership in confirming the business strategy
Gather
Existing Draw and
Strategy Model the
Documents resulting:
Hold Hold
Workshops Workshops
Goals,
on Strategic on Strategic
Objectives,
“Ends” “Means”
Metrics,
Conduct Strategies,
interviews of Tactics
key business
stakeholders
7/18/2011
PwC 5

6. Confirm the way the business want to operate – Business
Offerings & Model
Share of
Asset Type Total
Revenue of
U.S.-Listed
Firms
Financial Physical Intangible Human
Manufacturer N/A*
Creator 57%
0% 57% 0% 57%
Asset Rights
Financial Wholesale / N/A*
Distributor Trader Retail 14%
<1% 14% ~0% 14%
Financial Physical IP Landlord Contractor
Landlord Landlord Landlord 28%
8% 10% 2% 8% 28%
Financial Physical
Broker Broker Broker 1%
<1% <1% 0% ~0% 1%
Share of Total
Revenue of 9% 9% 81%81% 2% 2% 8% 8% 100%
U.S.-Listed Firms
Source: “The Business Models Investors Prefer”, MIT Sloan Management Review, * Not a legal business model 7/18/2011
Peter Weil, Thomas W. Malone, and Thomas G. Apel, June 22, 2011
PwC 6

7. Key questions to answer using the Business Model
Framework
• What are our business models today, and how have they changed over the
last 10 years?
• How do our business models compare with those of our traditional and
nontraditional competitors?
• How can we adjust our overall business model to include more revenue
from the models that are most highly valued today (such as IP landlord
and innovative manufacturer) ?
• To make any change in our business model, what capabilities do we need
to further develop, and what strategic experiments can we do today to test
new business models for tomorrow?
Answers to these questions are input to the impact analysis necessary to determine
how the business must change to reach its goals
Adapted from : “The Business Models Investors Prefer”, MIT Sloan Management 7/18/2011
Review, Peter Weil, Thomas W. Malone, and Thomas G. Apel, June
PwC 7
22, 2011

8. Confirm the way the business wants to operate – Operating
Model
High Coordination Unification
Shared customers with highly Consistent product design and
customized products, services, globally integrated processes for
and features all customers
Business Process Integration
Focus: Focus:
Integration capabilities Centrally designed and managed
Diversification Replication
Few shared customers with Few shared customers with
highly variable product design operationally similar product units
Focus: Focus:
Localized development speed and Replication of standard capabilities
autonomy and provision of APIs
Low Business Process Standardization High
7/18/2011
Source: Jeanne Ross (MIT CISR) - Enterprise Architecture as Strategy
PwC 8

9. One outcome of the Operating Model decision is the level of
service standardization across the enterprise
High Coordination Unification
Prsntn Business Enterprise Data Prsntn Business Enterprise Data
Svcs Services Services Services Svcs Services Services Services
Business Process Integration
Infrastructure Services Infrastructure Services
Diversification Replication
Prsntn Business Enterprise Data Prsntn Business Enterprise Data
Svcs Services Services Services Svcs Services Services Services
Infrastructure Services Infrastructure Services
Low Business Process Standardization High
7/18/2011
PwC Not Std Partial Standard 9

10. A business capability map (current and future) is a critical
input for doing impact analysis
Strategy & Vision Product & Service Marketing & Operations Service
Design Selling & Support
• Develop Strategy & • Analyze Products & • Advertize Products • Plan & Distribute Schedule
Vision Service Marketing & Services • Optimize Aircraft Routes
• Plan & Schedule Crew
• Decide & Manage • Design Product & • Offer Products & • Plan & Schedule Station / Ground
Initiatives Service Offerings Services Facilities / Resources
• Plan & Schedule Maintenance
• Conduct Market • Fare Product & • Make Reservations
Equipment & Resources
Research Service Offerings
• Book / Issue • Checkin
• Segment Target • Design Brands Tickets • Perform Gate & Boarding Services
Markets • Plan Flight & Dispatch
• Conduct Product & • Collect Payments • Track Flight & Aircraft
• Define Product & Services Tests • Perform Inflight Services
Brand Strategy • Manage Revenue • Perform On-ground Operations
• Perform Maintenance
• Manage Partners
• Service Customer Requests
• Manage Customer Relations
Corporate Functions
HR Finance Supply Contracts & Comms Compliance IT Process Training Facilities
Chain Legal Improv.
7/18/2011
Example derived from an airline company
PwC 10

11. Once the business decisions are understood, current and
future states can be compared to generate a roadmap
Input
Current
State
 Identify  Case for
Impact and
(strategy, Change
business and Gaps
operating model,
technology)
Future State  Identify   Lay Out
(strategy, Themes & Mitigate Risk
business and Roadmap
operating model,
Programs
technology)
 Business  Sequence
Prioritization Programs
7/18/2011
PwC 11

12. Conduct workshops with business owners and SMEs to
analyze how each business architecture decision impacts the
business capabilities
Business Strategy Business Model Operating Model
Ends Means
Vision Mission
Goals Strategies
Objectives Tactics
Business Operating
Tactics
Model Model
Impact
Impact Impact
Capability 1 Impact A Impact B Impact C
Business Capability
Map Capability 2 Impact D Impact E Impact F
Capability 3 Impact G Impact H Impact I
Capability 4 Impact J Impact K Impact L
7/18/2011
PwC 12

13. Example Impact Analysis
1 Biz Model 41 Op Model
140 Tactics
Decision Decisions
Business Operating
Tactics Technology
Level 1 Level 2 Model Model
Impact Impact
Impact Impact
Strategy & Vision
Defined Product & Brand
Strategy
Product & Service Design
Design Product & Service
Offerings
Marketing & Selling
Offer Products & Services
Operations Service & Support
Optimize Aircraft Routes
Corporate Functions
HR
Finance
Supply Chain
7/18/2011
Example derived from an airline company
PwC 13

14. The capability model also provides a link to the systems
architecture
Products & Marketing & Operations Corporate
Strategy & Vision
Services Design Selling Service & Support Functions
Pricing, Inv. & Itineraries Pricing, Inv. & Itineraries
Airport Concourse
Airport Operations
Experience
Cargo
Customer
Website.com
Customer Service & Support
Loyalty Loyalty
Customer Business Services
Back Office
Customer Funds Engines
Customer Management Engine
Reservation System
Network Planning Network Planning
Crew Planning
Aircraft Operations
Crew Scheduling
Crew Training
Ent. Workforce Admin.
Operations Bus. Services
Cockpit Systems
Cabin Systems
Enterprise Safety Mgmt. Enterprise Safety Mgmt.
Operations Control
Weather
Automated Outbound Ms
Maintenance & Eng.
Planning and Budgeting
Enterprise
Finance/Controlling
Mgmt.
Sourcing/Procurement
Human Capital Mgmt.
Analytics/Reporting Legend Analytics/Reporting
Capability Areas
Self Service Portal
System Suites
Img. / Doc Mgmt / Wkflw
7/18/2011
Example derived from an airline company
PwC 14

15. Bundle changes into initiatives and describe the case for
change for each
Case for Change
Objectives Achieved
Business
ID Initiative Rank T I E C S Risk Cost
Sequence
P W
2 27 Combine multiple proposals into one solid case 7 H N/A N/A N/A M N/A L $xxx,xxx
Rationale for achieving Objectives Risk Rationale Technology Impact
 Reduces the need for the RGO to review and  Rate discounts will not be able to be factored  Change to system to support screens for
consolidate multiple proposals since new proposal will have been neither rated selection of proposals to merge
 Reduces errors that result from combining nor sent for underwriting  Change to system for logic to take multiple
multiple proposals manually proposal and safely combine
Tactics Included
 Copy and combine coverages from multiple proposals into a single new proposal for submission to Case Install; this will not overwrite any existing
information in the original proposal
 Provide the end user the capability to submit multiple proposals for the final submit
 Validate or rate the combined proposal (prior to submission to Case Install)
Related Tactics Capabilities Involved Current Assumptions
 Business Sequence 5 (55) – Generate Application Package  New Business  Only coverages from submitted proposals can be combined
during Proposal Process  Amendments  Amendments and renewals will not require this functionality
 Business Sequences 8 (65) – Make Final Proposal Updates as these processes will use a single proposal
Prior to "Submit“  Applies only to proposals created in CPS
 Business Sequence 9 (25) – Capture “Scribbles” in CPS  Existing (current state) PDF capabilities will remain
Notes Section
 Business Sequence 11 (54) – Submit Proposal to SBR and
Case Install
 Business Sequence 12 (30) – Transfer Proposal to HQ
7/18/2011
PwC 15

16. Strategic Planning projects require Enterprise Architects
from both business and technology competencies…
Role # Competency / Responsibilities
 Focus is on cross-enterprise business functions, architecture processes, and
Enterprise oversight
Handful
 Ensure interoperability across domains
Architect
Enterprise
 Ensure compliance with architectural blueprints, roadmaps, and standards
per  Focus is on enterprise-level business solutions in a given domain such as HR,
Architects
Business business Finance, Supply Chain, Claims, etc
domain,
Architect number  Provide deep business knowledge and guide project architects to ensure
varies compliance with enterprise and domain blueprints
Technology <= #  Focus is on system technology solutions; for example, a component of a
technology solution such as enterprise data warehousing, content management,
Architect domains integration, etc
Must meet  Provide architectural expertise to lead solution delivery projects
Project project  Responsible for overall system architecture and integration with other domains and
Architect demands systems
 Focus on “internal” software architecture
Software Varies
 Creates technical requirements based on business requirements and technical
Project
design specifications
Developers
Engineer
 Process planning and control, verification and validation
Business Varies  Converts the business model, organization and operations into system requirements
Analyst
Software  Codes software modules to design specifications
Varies
Developer  Unit tests software modules
7/18/2011
16

17. …that can come from multiple different organizations within
your enterprise
Business Environment
Emerging Technologies (regulation, compliance,
market factors)
Enterprise Architecture Information Technology Business
Business Architecture
Business Owners
Application Architecture Business Relationship
Managers Business SMEs
Information Architecture
Infrastructure Architecture
Services Services Services
Strategic Planning Project
Architecture PMO
(updates, exceptions)
Project Manager
Technology Domain Business Domain
Architects “Architects”
SMEs
7/18/2011
PwC 17

18. Summary of Business Driven Architecure
• Drive detail into the strategy context
• Know the business model and any desired changes
• Know the operating model and any desired changes
• Perform impact analysis using the capability map
• Bundle changes into initiatives
• Build the supporting case for change and sequenced roadmap
7/18/2011
PwC 18

19. Questions?
©2011 PwC. All rights reserved. "PricewaterhouseCoopers" refers to
PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context
requires, the PricewaterhouseCoopers global network or other member firms of the
network, each of which is a separate legal entity. This proposal is protected under the
copyright laws of the United States and other countries. This proposal contains
information that is proprietary and confidential to PricewaterhouseCoopers LLP, and
shall not be disclosed outside the recipient's company or duplicated, used or disclosed,
in whole or in part, by the recipient for any purpose other than to evaluate this proposal.
Any other use or disclosure, in whole or in part, of this information without the express
written permission of PricewaterhouseCoopers LLP is prohibited.
7/18/2011
PwC 19