How Business Architecture informs, focuses, and guides business process efforts

1. From Business Strategy to IT Services:
The Role of Business Process Management in Business Architecture
Hugh Ma
Principal
Diamond Management & Technology Consultants
hugh.ma@diamondconsultants.com
November 13, 2007

2. What you can expect to learn
• What is Business Architecture?
• Why is Business Architecture important to BPM?
• What are the components of Business Architecture?
• What is the Operating Model and why is it a key to success?
• Learn how Functional Models describe “what” an organization
does and enable BPM to accurately define “how” those things are
done
Page 2
© 2007 Diamond.

3. The promise of BPM centers on optimizing
and automating core functions
Companies that outperform their peers do so because they
have an automated and efficient foundation
Business Process Management is a critical tool for delivering
that foundation
Page 3
© 2007 Diamond.

4. Dynamic innovation is built on a stable
foundation
• Stable operations allows the business to focus on new
opportunities and ideas
• Streamlined processes support speed to market
• Lower operating costs free up the funds needed to
explore new opportunities
Page 4
© 2007 Diamond.

5. It’s important to optimize and automate
but not at the cost of innovation
• BPM enables optimized and stable processes at the cost
of reduced agility
• Innovation requires agility and needs to prove itself
before being added to the core
• New products and markets frequently require operations
that change rapidly and don’t lend themselves to BPM
Page 5
© 2007 Diamond.

6. BPM practitioners need to be aligned to
business strategy more than ever
What are the core functions for our business?
What capabilities make up those functions?
Are we getting the benefits we expected?
Page 6
© 2007 Diamond.

7. Symptoms of a problem we all face
• Your Organization may be Process Oriented, but is it Process Driven?
• The BPM Cycle of Change: Managing People from Denial to Commitment
• Gaining Traction for BPM in an Organization
• Fifteen days to 45 Minutes: Dramatic Process Improvement by Changing
the quot;Right Stuffquot;
• Business Innovation: A Balanced Approach to Creating Value and Agility
• People, Process, Technology: Why Can't They All Get Along?
Page 7
© 2007 Diamond.

8. Every BPM implementation faces a host of
questions
These risks and challenges to implementation are
symptoms:
– Business strategy hasn’t been translated into tangible actions
– The operational model isn’t clear
– The high level functions haven’t been clearly identified
– Organization hasn’t been aligned to the core functions
Page 8
© 2007 Diamond.

9. Business Architecture gives you a
roadmap to know what processes are core
• Translates broad business strategy into tangible
capabilities
• Identifies the metrics and benchmarks that will show
progress
• Provides a big picture view of how people, process, and
technologies come together to build a core foundation
Page 9
© 2007 Diamond.

10. So what is Business Architecture?
Operational Business
Strategic Business
Architecture
Architecture
Identifies the
Identifies Capabilities
Operational Model,
needed to deliver the
business strategy and Functions and People
the Metrics that show that capabilities must be
progress implemented within
Page 10
© 2007 Diamond.

11. Strategic Business Architecture
 A comprehensive statement covering
Strategic Business Architecture
the major functions and operations of
Mission a business
 An inspirational, forward-thinking view
Guiding Principals
Vision
of what the program wants to achieve
 The top priorities that would achieve
Goals
the vision
 A set of realistic outcomes tracked by
KPI
Objectives KPI
KPI
performance indicators
 A description of what it takes to
Capabilities
achieve the objectives
Page 11
© 2007 Diamond.

12. Operational Business Architecture
 A comprehensive high level
Operational Business Architecture
view of the business that shows
how functions, people, and
technologies come together
Operational Model
 Top-Down functional view of the
business that identifies the
groups of core processes that
Functional Organizational
Model Model make up the organization
 A depiction of organizational
boundaries and how that relates
to operational functions
Page 12
© 2007 Diamond.

13. Understanding your Operational Model is
key to identifying core functions
High
Business Process Integration
Coordination Unification
Diversification Replication
Business Process Standardization
Low High
Page 13 Source: Jeanne Ross (MIT CISR) - Enterprise Architecture as Strategy, Diamond.
© 2007 Diamond.

14. Business Architecture delivers the
business clarity you need to succeed
Strategic Operational Business
Business Architecture
Architecture
Core
Processes
delivering
Key
Capabilities
that BPM can
Prioritized Functions and optimize and
Capabilities People automate
Page 14
© 2007 Diamond.

15. Business Architecture starts with
partnership
• Collaborate with senior management to understand the
business strategy and operating model
• Often one or both are not well defined or documented
• Frequently, we must be the ones to reach out and
facilitate the conversations needed
Page 15
© 2007 Diamond.

16. Business Architecture provides a
structure to frame the conversation
• Strategic Business Architecture provides a framework
for articulating strategy and driving it into tangible
capabilities
• Operational Business Architecture provides a framework
for understanding the functional and organizational
implications of strategy
Page 16
© 2007 Diamond.

17. Engage the Business early
Business
BPM Project Business
Strategic Planning Execution Operations
Planning
Use enterprise
Ensure the
and business unit BPM Analysis
organization is Run the
direction and and
prepared for Business
goals to drive Implementation
change
BPM plans
Project
Unit 1
Goals
Project
Filter
Enterprise
Project
Unit 2 Gals
Goals
Project
Unit 3
Goals
Project
Multi-Year Plan Budget Cycle Project Cycle Continuous
Page 17
© 2007 Diamond.

18. Start Bottom Up to Go Top Down
• Start with operational model and capabilities, not
requirements
– Requirements are good for implementation but bog down the
planning process
– Capabilities provide a manageable level of detail for prioritization
and release planning
• Start with functions, not with processes
– Process engineering requires a tremendous amount of detail
– Functions allow coarse-grained prioritization and justification for
follow-on detailed process work
Page 18
© 2007 Diamond.

19. Key Takeaways
• Adopt a holistic model for functional identification
– Work with the business to understand what is core
– Engaging the business ensures all parties understand how
organizational structures align (and don’t align) to functions
– Be a part of planning at a business strategy phase to capture the
true capabilities needed by the business
• Use Business Architecture methods to identify core
business functions
– Engage the business to determine the prevalent operating model
– Helpful to identify business domain specific processes separate from
enterprise-wide shared business processes
Page 19
© 2007 Diamond.

20. Thank You
Questions?