Nightmare 1 – Competing with newer and nimble competition, who have better and more modern business models

New start up companies are generally more nimble that established companies, but are more fragile and prone to failure once the venture capital money runs out.
New start up companies may end up being very successful capturing customers without needing all the baggage of older more establish companies.
However when they are successful (which is not guaranteed) they can be very profitable and become a takeover target.
When is the best time to acquire them and gain value from them? Will they be worth it? Will they be a good cultural match with your company?

The answer is to use Enterprise Architecture for performing due diligence on them and determining value, business fit and technical fit.
Model the current state Architecture of each company in a merger, then define a single target architecture for the proposed new merged company.
Plan the business transformation with an EA Roadmap.

Nightmare 2 – Dealing with the Effect of Regulatory changes

What will be the impact on political change to the market and a new international trading environment with BREXIT?
How can we ensure the company remains profitable during the transition period, as well as afterwards?
Can we implement the new EU GDPR regulations in good time to avoid the heavy fines? Is your company already very late in starting a GDPR implementation?

The answer is to already be using Enterprise Architecture to understand your current baseline architecture, understanding all the various components in your business, all the connections between data and processes, and all the connections between processes and applications. This will enable you to design your target architecture to implement GDPR compliance.
It’s so much easier with enterprise architecture than starting from a blank model.

Nightmare 3 – Engaging more customers with digital architecture approaches

What is digital Architecture anyway? Its a nice buzz word and everyone will say that they are going digital, but few really understand it.
It is a very fuzzy term.
Is digital technology enough in itself, or is a culture change to the business also needed? The answer to that question will be yes.
It really represents an entirely new way of doing business, not simply new technology.
Digital is about getting closer to your customers, who are adept at using mobile devices, tablets and eCommerce websites to engage with you and your competitors.
Their customer journeys and scenarios are important to understand. An outside in approach is mandatory not optional.

The answer is to use enterprise architecture to understand the market environment, your competitors, your customers as well as your own company.
This needs to be from both business and technology perspective.
If you don’t understand what is happening then how will you be able to compete?

Nightmare 4 – Developing new Strategies and Innovations

Its hard and difficult to develop new strategies. Most CxOs are not really that confident in doing it.
Too often conventional strategy fails. A few one line strategic statements are not particularly actionable.
The dynamic dependencies and manoeuvres are all multidimensional. Companies need greater situational awareness.
How do we deal with dependencies between strategies? Are you being reactive or pro-active?
Is simply copying your competitors strategy a good plan? Or only a focus on mitigating Risks, Issues and Challenges?

The answer is to use enterprise architecture approaches to model your strategic situation, converting strategies into an actionable EA roadmap.
Using Business Models, Wardley Mapping, Business Capability models and Business Motivation Models is a good start for evaluating the pros and cons of strategies.

Nightmare 5 – Managing change – maintaining business agility and speed of change

Everyone wants Faster, Better, Cheaper but its still only possible to achieve 2 out of 3 of those! Is there a silver bullet? No, only in Vampire movies!
There is the lure of Agile, but does it work? Will business agility be achieved by developers using Agile methods for development? Probably not.
There is also the lure of DevOps, but is this just the latest fad? Does it work in all circumstances? How will these work with Lean and 6Sigma approaches?
In reality Agile and DevOps are not the silver bullet for organisations wanting things faster, cheaper and better. Think ‘Horses for courses’.
What about a roadmap for future changes and balancing out the needs of Digital Architecture and your business capabilities.

This will take enterprise architecture and planning, not just agile development. For true Business Agility, your organisation will need to properly plan its future using Enterprise Architecture.
Long term strategic planning, enterprise architecture and road-mapping are always needed.

Nightmare 6 – Growing new business, new Products and Business Services

Many businesses simply think of growth in terms of increased sales, but it’s also important to maintain profitability and viability.
It’s important to have the appropriate business models and think about your value propositions, not just for new customers but for existing customers.
Why not create a Business Model to explore how your customers and competitor work?

The answer is to use enterprise architecture to model your business with a Business Model Canvas and Business Scenarios. Business Scenarios are answering ‘what if’ questions about the future, and how you should prepare. There can be multiple business scenarios for after BREXIT for example, and companies must be prepared for any of them.

Nightmare 7 – Managing Costs and Risks

It’s always more expensive that you thought to improve things. Nothing is ever simple.
Aim for simpler but no simpler. Aim for low risk and low costs, but trade off the risks for market share and share of the customers wallet.
Think of the law of Requisite Variety. And of balancing your problems with your responses.

The answer is to use enterprise architecture for tracking costs, efficiencies, total cost of ownership, balancing the relationships between cost and revenue items, and between risks and mitigation activities. Enterprise Architecture is inherently a cross disciplinary and multi-dimensional approach and usually no single change will solve the issues.
And don’t forget that if you don’t measure anything, then you can’t manage it!
Ensure that you are taking an enterprise investment view of all your new initiatives and change portfolios. Is every initiative actually worth investing in?
Will everything make a profit for your company? When is the best time to invest in change? What are the dependencies between investments in change?

Conclusion

Working out your strategic direction, ensuring that the right initiatives are invested in and ensuring that these are executed properly is exactly what enterprise architecture is used for.
It’s not just about better IT, but about planning a better future for your business, keeping it viable in the long term, helping to make the appropriate fact based decisions.
An enterprise architecture repository is the knowledge base to provide you with answers to your questions.

Enterprise Architecture helps you get on top of business transformational nightmares, to avoid those feelings of anxiety, fear, uncertainty and doubt.

And helps the CEOs sleep better at night.

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By now most companies should have heard about the new EU General Data Protection Regulations (GDPR).  https://en.wikipedia.org/wiki/General_Data_Protection_Regulation

The deadline is looming ever closer, and there are some hefty fines for companies that fail to implement it. The penalties for not complying with the legislation are potentially going to put a huge dent in your profits and viability. These include fines of up to €20 million or 4% of annual global revenue. This is then a huge reason for your company to be using Enterprise Architecture to deal with the GDPR changes.

And GDPR does not just have to be affecting European based companies, it applies to any company dealing with European citizens. And what’s more, even BREXIT won’t help. The UK government is already committed to GDPR after BREXIT. Sorry!

Companies that already have a healthy and strategic Enterprise Architecture Capability will be in a much stronger position. I don’t just mean EITA here of course, but real Enterprise Architecture.
GDPR is not just about IT change, but also about business change. Your existing Enterprise Architecture models will make it very much easier to identify the impact of the EU GDPR regulations, using new attributes and heat maps on existing catalogues, matrices and diagrams.

Purpose of GDPR

The purpose of GDPR is to improve on the previous data protection rules. In this digital eCommerce world, this is absolutely essential. This is no longer a so called box ticking exercise but a cultural change in mindset and levels of trust and integrity.
Companies, such as UBER, can no longer be blase and hide being hacked for months and losing huge amounts of customers personal data, without coming clean about it, and consequentially stopping it happen again.

See http://ec.europa.eu/justice/data-protection/reform/index_en.htm

The aim of the General Data Protection Regulations is to ensure that personal data is stored with customers informed consent, where the customer knows for what purpose data about them will be used and for how long it will be kept. Customers will want to know how their personal data is being used afterwards, especially after a merger or acquisition. What, for example does Facebook plan to do with WhatsApp data now that it has acquired Facebook?
It is certainly not transparent, is it? A customer might have trusted WhatsApp, but do they still trust the new owners Facebook? Facebook seems to be increasingly pushing fake news and becoming more political, which is troubling. Don’t just worry about SkyNet but also about Big Brother.

GDPR has been introduced to help companies be honest and increase their data security and their overall integrity. Luckily Enterprise Architects are already skilled at providing details about party data, data models, data flows and data security to support information security audits and personal impact assessments, and other regulatory requirements.

Something like GDPR is exactly the kind of strategic change scenario that Enterprise Architecture is designed to support.
What are the requirements? How do they affect the various EA domains? Strategy, Business Architecture, Information and Data Architecture of course, Services and Application Architecture and also the technology and infrastructure Architecture, where the personal data will be stored.
The same considerations apply whether the data is stored on premises or in the cloud. Enterprise Architects now need to build privacy by design.

Organisations will need to know why the data is needed? Is it always really needed, or is it just for future cross selling and data analytics?
Is that personal data compliant with GDPR? Probably its not longer compliant. Who uses the personal data? What business processes are involve? Too many process models that I’ve seen fail to show access to read and update data objects in their process models, let alone the business events that re related to customers data. What data services are involved? What applications need to be upgraded or replaced? I expect many package applications are being updated to ensure their compliance with GDPR. How do we ensure visibility of data to the customers, in the background of continual changes?
How do companies prove that they are being honest with customers data and especially how do they keep customers informed? If customer data increasingly has a value, then how will customers gain value from how companies use their data without their informed consent?

The Enterprise Architecture repository should already be able to answer all of these questions.
If not then why not? If not now, then when?

Companies without any credible Enterprise Architecture will be in a huge disadvantage and have to rapidly catch up. It’s never too late.
And once again, this is not simply about IT Architecture or just Data Architecture, it’s about the whole enterprise. The enterprise will include partners and suppliers as well. You will need to know what your contractors are doing with customers personal data.

In many organisations, the application architecture is only about so called Business Applications, that are approved and managed by the IT department. You also have to model the End User Computing (EUC) applications like those Excel spreadsheets, Access Databases, Sharepoint tables and Cloud databases (like Box, DropBox, Google Drive etc) that business users have created (unbeknown to IT) in order to do their job outside the main business applications. These EUC applications and databases must also be considered.

EA Governance and Compliance

Enterprise Architects, Business Architects, Risk Managers and Compliance Managers are in a strong position to assist the business to review their existing data flows and applications against the GDPR requirements.

See http://ec.europa.eu/justice/data-protection/reform/index_en.htm

Companies with an Enterprise Architecture capability will also normally have set up an EA Governance and Compliance capability. For GDPR, the Strategies, Goals, Objectives, Measures, Policies, Business Rules and Governance organisation structure need to all be reviewed and enhanced.
The Enterprise Architecture team should already be playing a key role in these EA governance bodies, the Architecture Governance Board of strategic changes and in ensuring compliance with policies, rules, patterns and standards in a Technical Design Authority.

Risk management and Audit processes also need to be reviewed and updated. Enterprise Architects are usually involved as key stakeholders for these. Are there adequate controls and monitoring of events? Is the data secure against hacking and accidental loss?

Enterprise Architecture Modelling

As per any enterprise architecture work, you need to identify the current and target architectures, identify gaps and change initiatives and then plan a roadmap of those changes. Heatmaps for GDPR related changes are an essential way to identify and prioritise GDPR changes needed.

After Enterprise Architecture changes for GDPR, then it is important to maintain continual operation, monitoring and reporting, so that the target Enterprise Architecture will need to include new end to end processes, roles and responsibilities for the business, to ensure continual compliance. Is data being captured with consent and a clear purpose, fully communicated to customers? ‘Security by Design’ is the new normal. This requires enterprise architects, compliance managers and C level executives to build compliance into the design of all current and future Enterprise Architecture models.

Enterprise Architecture models need at minimum, to review the following deliverables:

  • Data Catalogue
  • Data Model diagram
  • Process model
  • Process flow diagrams (Event-driven Value streams)
  • Application Service models (Catalogues and Diagrams)
  • Application model (Catalogues and Diagrams)
  • Application Integration/Flow diagrams
  • Data storage models (Databases, Data stores, Messages)
  • Data flow Diagrams
  • Infrastructure Service Catalogues
  • Infrastructure Component Catalogues
  • Infrastructure Diagrams

What are the key Changes for GDPR?

Compared to the current data protection framework under the Data Protection Act 1998, the GDPR will bring a number of important changes and enhancements including:

  • Increased accountability and greater level of responsibility within organisations to ensure that personal data is fully protected and processed according to the regulations
  • More data will be classified as customers personal data, not just in normal databases but also in EUC component and in Cloud data storage
  • New internal role of a Data Protection Officer
  • External Roles outside the company will also be regulated, such as contractors, partners and service providers
  • Eye-wateringly high cost of non-compliance
  • New requirements for notification of data losses through hacking and lack of compliance
  • Greater rights for customers to understand how their data is to be used, to give their informed consent, and to make future requests to change their consent
  • Risk Assessments
  • Privacy Impact Assessments

See also https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/

Benefits of GDPR

What are people expecting your company to do with their data? It’s about re-establishing your customers’ trust, and that you won’t change your mind and do something different or evil with their data. This trust will provide an increased business advantage for companies that get it right.

If a company cannot demonstrate that they are using Enterprise Architecture to achieve compliance with GDPR, then they are risking their reputation, which ultimate means less business and less profits.

With Digital Architecture, companies are designing their business with an Outside -In approach, designing their value proposition around what customers really want in their customer journeys.

GDPR is essentially designing the Outside-In approach for the protection of customers private data.

Enterprise Architecture perspectives

From an Enterprise Architecture perspective you need to ensure that:

  • Decision makers and C level executives are aware that the law is changing to the GDPR and time is running out to plan the changes
  • They use Enterprise Architecture to drive this as a strategic change, with new initiatives to be designed in the target Enterprise Architecture model and managed in the EA Roadmap
  • There is full knowledge of how information and data is managed, flows around the company and is changed by processes, services and applications
  • New business processes are created to handle customers new rights
  • Enterprise Architecture is used to managed and rapidly create an EA roadmap for strategic changes needed
  • A new meta model is designed to include customers consents, breach events and other change events
  • New business processes are created to handle data breaches and GDPR reporting requirements
  • Risks, issues and mitigations are well modelled
  • New Application Services are created
  • New package Applications are procured, which have updated support for GDPR data and processes

Conclusion

Yes, it’s a big strategic piece of work to do, with a May 2018 deadline that is getting ever closer, but luckily Enterprise Architecture is designed for managing just this kind of strategic change scenario.

So to avoid GDPR fines in 2018, start using Enterprise Architecture now, to plan and execute the strategic changes needed.

It makes sense!

How can you not already be using Enterprise Architecture?

Do some enterprise architects become masters at their discipline without hours of practice, or does it really take 10,000 hours?
Of course 10,000 hours is a long time. 5 hours per day for 10 years? Its not a fast process, and most people are always looking for short cuts.
Is 10,000 hours the average or the minimum?

Do enterprise architects need some innate talent, or can this discipline be learnt?
How long does that take? What do you need to learn?

“If you can’t explain enterprise architecture to a six year old, you don’t understand it yourself.” – as Einstein would have said.

What is Enterprise Architecture?

Enterprise Architecture (EA) is the process of understanding the business model, the enterprise vision and both the business and IT strategies and then enabling the effective execution of the resulting change initiatives.

Enterprise architecture does this by modelling the current state of the enterprise and defines a number of enterprise’s future target states, defines the dependencies, identifies the best investment initiatives, identifies the change initiatives and then plans the required business transformations in the future.

Business transformations includes defining holistic models and road maps of the change initiatives, covering all domains from a strategic, business, organisation, information, services, application, technology and infrastructure perspectives. Usually that also includes modelling the market environment (what the competitors are doing) and customers own architectures (customer’s own processes and customer journeys).

The goal of Enterprise Architecture is essentially to successfully manage the process from Strategy to Execution.
Strategy execution is generally an enterprise’s most challenging issue, especially with the current attention on digital or customer focused transformations.

What is an Enterprise Architect?

Too often the enterprise architect role is misinterpreted and misapplied. It is not another name for the IT architect or solution architect roles at a project development level. It is definitely not another name for a solution architect who has achieved a certain level of seniority.
A solution architect can’t call themselves an enterprise architect, without first attaining an expert level of understanding and knowledge of the business as well as of IT.

An Enterprise Architect is a senior management executive leadership role concerned with how an Enterprise works from a business perspective, planning the future of how an enterprise needs to be transformed and changed over time and how it need to operate in its future environment. Inevitably IT is a large part of that change but in itself doesn’t define what Enterprise Architecture is all about.

Becoming a master : Gaining Skills and experience

Ignorance brings chaos and not knowledge, and diligent study and learning is essential.

No matter where you start from, it is necessary to learn from others and apply what you have learnt. Finding the right mentor is important.

Enterprise Architecture is a broad discipline and skills and experience in programming and development will not make you an Enterprise architect.
You have to learn about how a business works in terms of its business strategy and business capabilities, how it delivers value to its customers with its Business Model and its value proposition. You have to understand what Business Capabilities an enterprise has and how those capabilities are realised in the future with a mapping to the staff, organisation structure, business processes, information/data needed (and flowing), enabling applications and the services they provide, as well as the underlying technology and infrastructure. Technology & infrastructure isn’t simply IT by the way, but can includes factories, physical facilities and machinery. Remember the Internet of things includes smart machines, Internet enabled cars, integrated factories etc, not just IT stuff.

What does an enterprise architect needs to know?

  • A clear understanding of what Enterprise Architecture is
  • Abstract thinking
  • Conceptualisation
  • Visualisation
  • Visioning
  • Discussing strategy and planning
  • Modelling the enterprise – to understand anything requires a mental model or an image of it.
  • Modelling the future change options and alternatives
  • Understanding Meta modelling and applying the important concepts
  • Understanding different stakeholders viewpoints
  • Identifying best practises
  • Understanding the enterprise architecture processes
  • Researching new topics
  • Following business and IT trends
  • Assessing opportunities
  • Critically evaluating information gathered from multiple sources
  • Evaluating investments
  • Evaluating future business and IT trends
  • Making recommendations
  • Analysing the architectures
  • Aligning business and IT
  • System thinking
  • Designing
  • Road-mapping and business transformation
  • Making decisions
  • Teaching and mentoring
  • Writing and communicating
  • Persuasion and influencing
  • Managing complexity
  • Managing performance
  • Providing value to the enterprise

Enterprise Architecture thinking and deliverables are often seen as purely to do with software delivery, solutions development, technology selection and specific implementation details. These are aspects of the work that is done, but only a fraction.

Its worth repeating that Enterprise Architecture covers changes to the whole business not only IT related changes.

What should an EA job specification look for?

  • 10 + years of experience of Enterprise Architecture including Business Architecture
  • An understanding between future strategy planning and running current operations and software development
  • Understanding how businesses work
  • An understanding the difference in scope and context between enterprise architecture and solution architecture
  • An understanding of stakeholder engagement, analysis and design.
  • A broad, enterprise-wide view of the enterprise and appreciation of strategy, business capabilities, business processes, services, information, data, enabling applications, technologies and infrastructure.
  • An understanding of governance, risks and compliance
  • A demonstrated ability to recognise structural issues within the enterprise, interdependencies, issues and challenges, influences, motivations
  • The ability to apply enterprise architectural principles to business problems
  • Experience using model-based representations that can be adjusted as required to collect, aggregate or disaggregate complex and multiple views about the enterprise
  • Extensive experience modelling using a variety of tools and techniques
  • Stakeholder analysis experience
  • Experience in establishing an enterprise architecture capability within the organisation.
  • Participating in strategy discussions and planning
  • Understanding evolutions and system dynamics
  • Balancing the requisite variety
  • Guiding the impact of strategy on business capabilities
  • Guiding business transformations
    Open minded and challenging group think

What are the habits of successful Enterprise Architects?

  • Use a business led Enterprise Architecture approach
  • Use business models to understand the business environment
  • Use business capability models to understand outcomes of value and planning of change with heat maps
  • Use strategy maps, Wardley maps and system dynamics models to understand  dependencies and evolution
  • Use information models to understand underlying data, information and knowledge
  • Use appropriate frameworks to apply consistent structure of key deliverables
  • Use appropriate EA tool to accelerate modelling and analysis of investments and options
  • Use appropriate approaches (Agile, Lean, Six Sigma, Iterative) at the right time (one size does not fit all)

Master Enterprise Architect

A master enterprise architect requires a unique blend of skills, which include keen awareness of the business, looking into the future, analysing trends, understanding the evolution of dependencies, dealing with various strategies, managing business transformations and change, dealing with stakeholders, understanding IT architectures.

Working closely with C level executives and senior management, master enterprise architects get into the detail of what makes a businesses successful by getting to the heart of their business strategies, goals and objectives, making better decisions and managing the complexity of strategy execution to enable the enterprise to gain maximum value from their investments in change.

How long does this all take? Roughly 10,000 hours, if not more…
Its worth reading the book ‘Outliers: The Story of Success’ by Malcolm Gladwell

 

Enterprise Architecture is much more than a list of components. Too often one sees diagrams in slide decks that are either simple lists, a layered view of domains, or a graphical hierarchy. And these are supposed to represent the ‘Architecture’?

These visualisations are good to use to inform on the scope and context, but they really only tell us half the story.

The various components (building blocks in TOGAF) will all have a large variety of connections between them to other components. It is these connections that in fact provide the value of an enterprise architecture model, and cement everything together.
An Enterprise Architecture model is a graph of connections. The information and knowledge created in the enterprise architecture model can be viewed from many perspectives and needs to satisfy many stakeholders. Everything is dependent on everything else, and everything is connected in multiple ways. Components never exist in isolation.

An enterprise architecture model is holistic and models the whole enterprise as a sum of the parts, from a variety of different perspectives and stakeholder viewpoints. All enterprises are essentially multi-dimensional, and the connections are the way we can understand all the dimensions.

The connection types can include connections such as:

  • Traceability
  • Impact
  • Association
  • Responsible
  • Affinity
  • Correlation
  • Dependency
  • Interaction
  • Cost
  • Accesses
  • Motivation
  • Evolution
  • Need
  • Enables
  • Assignment
  • Realisation
  • Uses
  • Requires

The name, definitions and set of all possible connection types will be specified in your favourite EA Framework/Meta Model (I.e. TOGAF, ArchiMate, FEAF, MODAF etc.). It’s more common to customise a meta model by adding new connections between existing components that it is to add new component types themselves

Using a well developed EA model, CxOs will be able to look at all the connections help to understand the way the enterprise works as a whole, as a holistic enterprise. The connection provide the cohesion in the model. CxOs can understand all the connections internally between business units, their business model, their business motivation model and externally with their customers and suppliers. And to gain an understanding of how the company fits within the market environment and compares with its competitors. The connections provide knowledge and dynamics.

To get the right answers you need to ask the right questions. The connections between components will provide the answers and support decision making.

Here are some questions that might be asked:

  • How are the Business Capabilities realised?
  • How do the Business Processes access Data and Information?
  • What Knowledge is available to my staff?
  • What Business Services are associated with my Value Proposition in my Business Model?
  • How does the Product Lifecycle change over time?
  • What are the dependencies between Business Capabilities?
  • How are my User Needs and Customer Journeys satisfied?
  • What components are expected to evolve in the future?
  • How do my Business Capabilities compare to those of my Competitors?
  • How does my enterprise compare to the Market Offerings?
  • When are the Capability Increments realised with Initiatives in the Roadmap?
  • Which Initiatives are planned as Programmes and Projects?
  • What Resources are assigned to each Initiative or Project?
  • What are the Risks associated with my potential Investments?
  • What are the dependencies in the Project?

More connections in an EA model will make that model richer and more useful. Connections provide the behaviour in a model.
Connections are not just static but are dynamic and may be changed far more often that the components they link. Modelling dynamic behaviour in an EA model is something that is often overlooked.

An Enterprise Architect is thus someone who makes vital use of “the fundamental interconnectedness of all things”, in order to understand complexity and to find the right answers for the whole enterprise; and who thereby becomes the master of changes, transformations and evolution of the enterprise over time.

Increased interconnectedness in an enterprise architecture model can stimulate innovation and the emergence of new ideas and possibilities.

Written by Adrian Campbell

A good analogy for an Enterprise Architecture capability is to think of it as the equivalence to an intelligence corps in the military.
Military Leaders and business decision makers will use this Strategic Intelligence capability to:

  • Know what their current capabilities are
  • Know the capabilities of the enemy (competitors) are
  • Understand and gain awareness of the market situation
  • Understand the nature of the environment (the market place)
  • Understand the chances of success (costs and revenue)
  • Help define their goals and objectives
  • Help plan their strategies and tactics
  • Help create plans of attack or defence (a roadmap for transformation ad change)
  • Help to make new plans as the situation changes (a plan is always the first casualty of war)

The military intelligence corps is responsible for gathering, analysing and disseminating intelligence and knowledge about the military situation.

Enterprise Architecture is a business capability that collects information about the whole enterprise and uses various modelling and analysis approaches to create knowledge about the enterprise, provide advice and guidance to CxOs and heads of business units, and provide intelligence in support of their strategic decisions.

Most enterprises maintain some kind of business intelligence capability to collect information and analyse it, but this is not enough. An enterprise architecture capability is also needed.

For a long time the high level decisions made by executives and senior managers have often purely been based on intuition, personal experience and anecdotes.
Often their experience is 20+ years old and no longer relevant. Unfortunately most CxOs didn’t ever learn about enterprise architecture in their MBA courses, or were never taught about it in the first place. This is woeful ignorance in todays fast moving and complex business environment. Don’t let other players on the golf course make your decisions for you.

Often CxOs and senior decision makers are simply copying the decisions made by their competitors, for better or worse. If one of their competitors is playing with Blockchain, so that must be a good strategy right? Right? Another silver bullet or a waste of money? Does your enterprise architecture capability give you a competitive weapon?

Companies that want to succeed should put their trust in real strategic Enterprise Architecture.

Q. How many CxOs does it take to change a light bulb?
A. None.
– They get their Enterprise Architects to enable the strategic change.

Connections between components in an enterprise architecture model are the basis for identifying, creating and providing knowledge, analysis and intelligence.
In other words, Enterprise Architecture creates the Situational Awareness model for the organisation. The battle map on which the strategies and tactics can be plotted.

Enterprise Architecture models include the strategy, business architecture, information/data architecture, application architecture, infrastructure architecture domains etc.
EA Models also includes a study of the  behaviour of their contacts, customers, competitors, vendors and suppliers, from both a strategic and tactical perspective. Both for the current state and future target state, or indeed multiple alternative future states based on alternative business scenarios. The target operating model is the same as the target enterprise architecture model.

The Enterprise Architecture capability provides valuable knowledge, intelligence and experience of the dynamic changes going on and not just as a static set of deliverables or inflexible process. When the strategic situation changes, then the Enterprise Architecture body of knowledge and intelligence needs to rapidly provide the answers. Keeping pace with today’s dynamic markets requires an Enterprise Architecture capability to enable and deliver a strong strategy and amplify it. A better way to change that light bulb.

Achieving a company’s full potential and stimulating creative needs, innovation and knowledge needs answers to lots of known and unknown questions.
Leaders focus on the most important decisions, answering questions such as:

  • What if a competitor does this?
  • What if the regulations change?
  • What can we do to help?
  • How to persuade the customer to buy more?
  • How to increase profits?
  • How to improve our service?
  • How to stay competitive in a changing market?
  • How can we innovate?

 

Achieving instant readiness with Enterprise Architecture is better than not being ready at all, or too late.
If you (the CEO) don’t act now to establish an Enterprise Architecture capability now then you will lose out on competitiveness and efficiency.

The most successful leaders in business already have a Strategic Enterprise Architecture capability established, providing the organisation with Intelligence and Knowledge.

Strategic Enterprise Architecture (Intelligence corp) capability includes the following sub-capabilities that enable the most successful leaders in business.

An Enterprise Architecture Capability:

  • Provides the ability to envision and visualise an ideal future state based and create a roadmap in order to realise it (situational awareness and winning the war)
  • Provides the ability to understand trends that present threats or opportunities for an organisation (countering the enemies threats)
  • Provides the ability to identify, analyse, integrate components and connections required to achieve a business strategy (organising your forces)
  • Enables and motivates people to work together to realise a strategic business transformation. (ensures success and keeps up morale)
  • Enables governance and compliance of strategic relationships with vendors and suppliers, including for cloud services (maintains direction and momentum)

..I love the smell of Enterprise Architecture in the morning. Smells like victory…

 

How often is an established Enterprise Architecture approach used to create a Target Operating Model?
If the answer is not often, then why not?
If the answer is yes all the time, then how should we go about creating one ?
Are traditional consultancy approaches to target operating models good enough?

What is an Operating Model?

The term Operating Model is a fuzzy one. What does it really mean? What is in an Operating Model?
It appears that often some consultants totally go out of their way to avoid mentioning Enterprise Architecture and instead focus solely on the term Operating Model.
This may well be a side effect of the misunderstanding of Enterprise Architecture as only concerned with IT Architecture. Or may be because those consultants want to invent new terminology to make their services sound unique?

Is a Target Operating Model just another name for the Target Enterprise Architecture?
And by Enterprise Architecture of course I don’t mean just the IT Architecture domains, but all the EA domains which now include:
  • Strategy & Motivation
  • Business Architecture
  • Information/Data Architecture
  • Application and Application Service Architecture
  • Technology & Infrastructure Architecture
  • Physical Architecture (I.e. Archimate 3 Physical Elements)
It seems to me that a target operating model is fundamentally just another name for the full target Enterprise Architecture model and in particular primarily represents the mapping between the Strategy and Business Architecture domains and the other EA domains.

Why do we need an Operating Model?

An Operating model at the very least represents the mapping between the strategic views and components, such as :
  • Business Model (BMC)
  • Business Motivation Model (BMM)
  • Wardley Model
  • Strategic Map/Balanced Score Card (SMBSC)
  • Business Capability Models
and the rest of the enterprise architecture models, views and components in the other remaining EA domains.
If we update the strategies then we will need to update how those strategies will be realised.
A strategic change / business transformation programme will be used to realise the new strategic changes and essentially change resulting operating model.
Many refer to a Target Operating Model in a simplistic fashion as consisting of People, Processes and Technology, but there is more to it than that.
According to POLISM, a definition that comes from Ashridge Business School, an operating model covers six component areas:
Processes
– The business processes that needs to be performed
Organisation and people
– The people and roles performing the processes and how they are grouped into organisation units
Locations, buildings and other assets
– The places where the work is done and the technology, infrastructure and physical equipment in those places needed to support the work
Information
– The Information, data and applications needed to support the work
Sourcing and partners
– External entities, people and organisations outside the enterprise also performing the work
Management
– the management processes for planning and managing the work
Missing from this list is an analysis and understanding of Customers, Risks, Assessments, Performance metrics and measures, and other influences.
A secondary question that I always ask myself is why don’t Business Masters (MBA) courses teach executives and management about Enterprise Architecture?
This may indeed be the source of the fuzziness and lack of preciseness of the term Target Operating Model?

Target Enterprise Architecture Model

For me a better approach is to use a complete Target Enterprise Architecture Model as the Target Operating Model.
The Target Enterprise Architecture Model will consist of a number of more specific models (viewpoints) grouped into a number of EA domains.
Each of the EA domains will typically address the needs of different stakeholders and
visualises their concerns. This is a bit like for the POLISM stakeholders above but in better detail.
Each of the specific models listed within an EA Domain below may well evolve and change over time independently. The specific models can be updated when necessary as the enterprise itself evolves and changes in reaction to changing business and customer environments.
There is traceability connection between each specific model, so creating or updating one model will inform and influence other models. The primary traceability connection are see in the diagram below.
As with any target enterprise architecture models, there can be a number of alternative future versions often aligned to different strategic themes,  business scenarios or intermediate transition architectures. There need not be a single view of the future.
The complete set of the following specific models makes up the whole target Enterprise Architecture model, grouped into the following EA Domains:

Strategic Architecture Domain

Business Model (BMC)
Wardley Model
Business Motivation Model (BMM)
Strategy Map / Balanced Score Card Model
Value Chain Model

Influences Domain

Influences model
Stakeholders model

Customer (Outside In) Domain

Business Value Network Model
Business Scenario Model
Customer Journey Model
Business Services  (value proposition) Model
Business Events Model
Business Service Flow Model

Risks Domain

Risks (RAID) Model
Assessment Model
Business Capability Domain
Business Capability Model
Capability Dependency Model
Component Business Model

Governance and Compliance Domain

Business Policy Model
Business Rules Model
Governance Model
Requirements Model

Organisation Domain

Business Context Model
Organisation Structure Model
Business Locations Model
Business Roles Model

Business Process Domain

Business Process Hierarchy Model
Business Process Flow (Value Streams) Model

Knowledge/ Information/ Data Domain

Knowledge Model
Business Information Flow Model
Business Information Object Model
Logical Data Object Model
Physical Message Model
Physical Data Storage Model

Applications Domain

Application Services Model
Application Landscape Model
Application Integration Model

Infrastructure Domain

Infrastructure Services Model
Infrastructure Model
Network Model
Physical Models

Roadmap Domain

Initiatives Model
EA Roadmap Model
Project Roadmap Model
Programmes and Project Portfolio Model
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Summary

In summary we should not be defining target operating models with yesterday’s approaches, but must instead use today’s better Enterprise Architecture techniques and models for defining the next Target Operating Model.
The models identified above are all fully defined and available in an Abacus model. Anyone who wants to follow this approach can contact me for more details.
Enterprise Architecture Models provide value by capturing knowledge about the business strategies, the current and target enterprise, understanding and identifying the gaps between current and target enterprise architectures, and then planning a roadmap of initiatives to close those gaps.
Often they seem only to be used as a repository of static detail such as landscape models, lists, hierarchical models etc. i.e. diagrams full on boxes. Many EA models don’t always model the connections between components that make up the model (diagrams with boxes and lines), let alone the dynamic nature of those connections.
Enterprise Architecture, and in particular the Strategy and Business Architecture domains, need to deal with dynamic complexity of an enterprise and not just the static complexity of a landscape model.
How often do you see an EA diagram showing various structural components (boxes) without any connections (the lines between them) ? And how often is there little or no indication of dynamic change? If we are using Enterprise Architecture or Business Architecture to support Business Transformation strategies, then how can we proceed without a way of modelling transformation or strategic change.
We need to recognise and accept that everything changes and to be able to visualise that change, and to analyse that change.
“Situation Normal, Everything must Change”  as Simon Wardley says!
Business and technology trends are relentlessly changing. Customers are gaining greater knowledge through on line searches and reading social media about an organisations value propositions. Customers are increasingly expecting a more nuanced and intimate relationship with their favourite products, through ‘likes’.
Competitors are the sharks that constantly swim around businesses looking for Blue Ocean Strategies (as developed by W. Chan Kim and Renée Mauborgne) in order to beat their competition, by creating new differentiations at lower cost and higher quality, and an uncontested market with unique value propositions. Who dares wins.
Real life business and real life decisions are complicated, complex and chaotic. Multiple strategic paths usually coexist, even if one would prefer everything to be simple. Alternatives exist. Evolution exists. Everything will change. Business strategies and business transformations are all about change.
So how should we model dynamic change within Enterprise and Business Architecture models?
A number of more dynamic EA diagram models can be used.

Wardley Maps

One approach that appears to be gaining traction recently is that of Wardley Maps (from Simon Wardley).
http://blog.gardeviance.org/2015/02/an-introduction-to-wardley-value-chain.html
Wardley Maps are used as a way of dealing with dynamic strategies through considering not only a Value Chain, dimension but also plotting the value and changes to activities and products that are needed to meet customer needs, simultaneously on an Evolution dimension. A Wardley Map illustrates the dependencies and evolution of various components over time, how the components support customer needs, and how they evolve from their Genesys, to being Custom Built, to a mature Product, to becoming a ubiquitous Commodity or Utility.

Scenario Analysis

Scenario Analysis is another technique for imagining future alternative scenarios. This technique was popularised by Shell.
http://www.shell.com/energy-and-innovation/the-energy-future/scenarios.html
This is in essence playing what if games. If a particular event occurs in the future, what would our business strategy need to be now and in the future? Events can be expected to continually evolve and change.
By developing possible visions of the future this allows an enterprise to explore less risky ways forward and make better strategic decisions in the event of that future event becoming a risk.
This is thinking ahead. “What if” questions are asked to consider dynamic events that may only be remote possibilities, and to test the limits of strategic planning.
Scenario Analysis help in understanding possibilities, events, risks, threats, constraints and uncertainties ahead. New perspective are deliberately used to examine the macro and micro level detail of what might possibly change. It doesn’t matter if the envisioned change never occurs, the value is in the planning ahead.

Business Capability models and Capability Based Planning

Business Capability models are becoming much more common these days for planning change.  A Business Capability is defined as the ability of an enterprise to do something.

A Business Capability identified from value based, business service based, outcome based and ‘Outside In’ based perspectives.

Business Capabilities are not another way of viewing the current organisation unit structure, the existing business functions, or the business processes.

Business Capabilities are instead realised by an aggregation of a subset of all the ‘Inside Out’ components, often simplified as people, processes, applications and technology.
http://pubs.opengroup.org/architecture/togaf9-doc/arch/Figures/32_dimensions.png

Business Capability Models provide value by for ensuring alignment to business strategies and for planning change (See the Open Group paper on Capability-based planning – The link between Strategy and Enterprise Architecture).
https://ingenia.wordpress.com/2013/06/16/business-capability-based-ea-roadmap/

Capability Model Dynamics

However the Capability Model Dynamics also need to be considered.
Business Capability Dependency models are used to map what business capabilities are dependent on other business capabilities.
This will create an understanding of the dynamics of the Business Capabilities. This view is similar to the constraint connections between components seen in a Wardley Map.
Business Capabilities will typically  be identified at various levels, perhaps based on the Garter Pace Layering approach. This means that some business capabilities will be connected with Systems of Innovation, others with Systems of Differentiation, and with Systems of Record. The word system is used here in a generic sense and not as a synonym for a software application.
A Capability Dependency model will show what Capabilities depend on other capabilities. For example a system of innovation capability will likely depend on a system of differentiation capability and also a system of record capabilities. Over time one expects a greater pace of change to the system of Innovation capabilities, less for the system of Differentiation and the System of Record capabilities will be the most resistant to change.
Each Business Capability will change over time and the connection between a Business Capability and a number of Capability increments over time will show how a capability can evolve or be changed over time. This is described in TOGAF9 (section 32. Capability-Based Planning) but I rarely see this being used in real EA models.
http://pubs.opengroup.org/architecture/togaf9-doc/arch/Figures/32_relationships.png

Capability Increment Dependencies

Capability Increments will also have dynamic dependencies between them. These dependencies are usually related to strategic changes to the business capability that will occur over a period of time. Its clear to see that the various connections, including evolution connections, between components in a Wardley map are similar to the Dependencies between a Business Capability and between Capability Increments.
In my opinion the two techniques are complementary and reinforce each other very nicely, especially when seeking to understand how capability and the components that realise them will change and evolve.
The dependencies between Business Capabilities and between Capability Increments can be used to inform the sequence of changes in an EA roadmap. I describe this in in an earlier post.
https://ingenia.wordpress.com/2013/06/16/business-capability-based-ea-roadmap/
Business Capabilities are also often associated with (influenced by) Customers and other Stakeholders, and their needs, so they can be useful for understanding the mapping between Customer needs and other components in a Wardley Map.

Enterprise Investment Analysis

From an analysis of gaps between current business capabilities and target business capabilities, it is possible to create a list of Enterprise Architecture Initiatives and investment opportunities. These EA initiatives will be analysed from a number of different quality perspectives including Risks, Profits, Costs, Threats, Viability. A number of these aspects can be explored while creating a Wardley Map  and from the Capability dependency Models.  They typically will change their characteristics during analysis, once they are analysed and understood.
Each initiative or investment opportunity can be analysed by the Business Architects and decisions made whether to play or pass. This approach is described by Chris Potts in his RecreEAtion trilogy of books.
http://www.dominicbarrow.com/writingrecreation.html
Each Investment initiatives or opportunities will be related dynamically to each other and will themselves be subject to evolution. Even after an Investment initiative is approved . approved and funded, and used to create a work package in a Project level Roadmap, it will still evolve within an Agile development or delivery project.
A log of Investment initiatives and opportunities, leading to Strategic Decisions from an investment case perspective, should be part of the dynamic Enterprise Architecture Model. When updating a Wardley map, these historical Strategic Decisions should be re-appraised.

Enterprise Architecture models for the Business Environment

A well as creating the usual EA models of the whole enterprise, I also like to create additional EA models from the Customers perspective (the Customer Architecture), from the Market perspective (the Market Architecture) and from a Competitors perspective (Competitors Architecture). It’s useful to consider these independently especially when planning for a Digital Strategy and when looking for a competitive advantage against competitors.
I was pleased to see a similar idea from the Wardley map perspective, as described by Simon Wardley in his blog as Overlapping Wardley maps in Chapter 7.
See http://blog.gardeviance.org/2016/09/finding-new-purpose.html
A Customer Wardley Map can show a customers own view of where their needs come from – I.e. from the Outside In perspective. https://2.bp.blogspot.com/-Fg3T1KGlaeM/V8stynPSUrI/AAAAAAAAKbs/TZzYmwBSLuAqOt7VTH9T8uP5NEVFNr1twCLcB/s1600/fig63.png
A Competition Wardley Map can be used to show the Gaps between an organisations own Wardley Maps – I.e. to support an analysis looking for Blue Ocean Strategies.
A Partners/ Suppliers Wardley Map can be used to understand the dependencies with the Business Capabilities of Suppliers and Partners – I.e. to inform a Supply Chain strategy or indeed a Cloud Strategy.
A Brand Architecture Wardley Map can be used to independently analyse how an enterprise’s Brand, Business Model and Value proposition are perceived by the online community.

Capability Analysis

Capabilities can be modelled into the future with various properties such as Value from future flexibility, Risks, Threats, Profit, Viability, Feasibility etc.
Dependencies between Capabilities can be connected to their multiple future versions to visualise their evolution and the choices possible. Often a future capability is only possible if another capability i.e. realised first, even if that one has little intrinsic value on its own, such as an infrastructure platform capability.

System Dynamics Models

The dynamics of a business can also be analysed using a System Dynamics Model or System Thinking Model. These represent the dynamic cause and effect loops as popularised by Peter Senge in his 5th Discipline book, or as generic dynamic dependency diagrams.
Loops can be added to identifying Increasing loops, Decreasing loops and Balancing loops.
An example of a System Dynamics/System Thinking Influence diagram can be seen at:
https://pivotalthinking.files.wordpress.com/2012/01/influence-diagram.png
and at
https://hbr.org/resources/images/article_assets/hbr/1101/R1101G_C_lg.gif

Business Architecture Model

My own Business Architecture approach combines many of these techniques together to gain an increased understanding of the dynamic nature of the Business Architecture.
I have created this as a meta model for use with the Abacus EA Management tool.
My wardley.abacus model already combines the Capability Modelling and Capability Dynamics approach together with Wardley Maps and other more familiar EA techniques.
If anyone is interested then send me a message.
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