Many companies are engaging in large transformation initiatives with the goal of not only modernizing their technology but also creating a more efficient workflow that is powered with better technology to tackle new challenges and growth.
In many of these cases, there is a clear need for a modernized technology architecture as the systems requiring modernization are antiquated. With a significant technology shift, the need for architectural guidance is clear, and as a result, many projects are staffed with various technology architects to ensure alignment with the established standards. Many organizations realize the need for enterprise-wide guidance and have created architecture groups or departments with the sole purpose of providing enterprise-level technology guidance. While this is all well and good, many organizations fall short when it comes to a similar architectural discipline on the business side.
This article argues for the importance of effective business architecture in organizations as a way to, among other things, optimize processes and create standards that enable business technology success.
What is Business Architecture?
Before deciding on whether valuable and limited resources and energy should be dedicated to creating business architecture, a few definitions are in order. Similar to any technology architecture, business architecture provides guidance and a general structure from which to operate.
The first step is to establish a vision for the business. This goes deeper than any strategic goals related to markets, profits or efficiencies, by defining the set of underlying tactical goals required to enable the higher-level goals. A goal of increasing profit by a certain percent annually doesn't provide enough guidance to create a comprehensive achievement plan.
A better approach might be to break this goal down into a percentage reduction in cost combined with a percentage increase in revenue. The point is that higher-level goals need to be broken down into levels of abstraction such that they are tactical enough to start creating actionable plans for and around.
Optimizing Processes
Once the vision has been established, and tactical plans have been created, the next step is to review the business processes. In many if not most cases, older systems have influenced the business processes. Over time many organizational methods have evolved to include steps—manual or otherwise—that work around technology limitations.
For example, the lack of a real-time lookup in a system may have resulted in a two-step overnight process – the traditional overnight batch process. Even modernizing portions of the platform might enable real-time lookups to make it a one-step instantaneous process. From there, further examination of the processes and an understanding of the various steps and business needs involved could help identify additional points for efficiency or even automation.
A key component of examining the processes is understanding and determining where the process pain points are, and how much time is spent on them. This provides the focus required to help eliminate the process pain points, allowing for a better experience for those using the system. Also, prioritizing and subsequently addressing the most inefficient aspects of a process can provide a better return on resource and financial investment.
One of the best practices of any business architecture is using observed evidence to ensure that the scope of any process improvements directly impacts the business in a positive way.
Establishing Standards
Standards and other best practices are also valuable sources to incorporate into any business technology solution where applicable. The first benefit is in not having to reinvent the wheel. There also may be many models or standards that can be leveraged that provide great process and technology options.
An even larger benefit is that the standards offer a point of comparison to the current processes. This allows organizations—and the business and technical resources that support them—to better understand the value of their current processes. It is possible that the existing standards are too generic and don't quite fit a new or existing niche market of the organization. Either way, process validation or invalidation occurs, thus adding data points to making better decisions in the near and long-term.
Adopting standards also help when implementing new solutions by making it to easier to implement the out-of-the-box features and functionality, if desired. Having a robust set of standards also means that IT does not spend its time on migrating ineffective or broken processes as part of upgrades and implementations, opening up scarce IT bandwidth. That added benefit allows business, and IT resources to focus on building and implementing value-added features, adding a competitive edge to the organization.
The difference lies in making a focused effort to take advantage of new features and functions, rather than just approaching them opportunistically as most organizations currently do.
Change Management
Many organizations struggle with change. That’s why a change management approach is an essential component of any business architecture. The change management impact of all of the business processes optimizations as a result of a new implementation can be daunting.
For better or worse, many organizations use the change management argument for keeping things the way they are, as handling and training on all that change can be a mammoth effort in its own right. That said, there is a counter-argument for that, however, and that is that there has to be a balance.
Organizations who avoid the pain of change often encounter additional implementation costs in keeping a product, feature or process working as it always has. This can, of course, increase the cost and complexity of changing when that day of reckoning finally occurs. Additionally, the cost of ownership in both implementing a custom feature or functionality—and maintaining that feature or functionality—needs to be balanced against the impact and cost of training the end users.
In many cases, a phased approach can be beneficial, but for most organizations, the bottom line is that sometimes change is inevitable.
All of this and more is why taking a more proactive approach to business architecture can help organizations not only improve their technology but also help them to modernize their business processes, thus maximizing the return in their investments in large transformation projects.