IBM Global Business Services Actionable Business White Paper

Actionable 2 Actionable Business Architecture

Executive Summary become extremely critical. Experience from field practice in a Interviews from over a thousand CEOs in 2008 shows variety of industries, including government, suggests that the organizations are bombarded by change, and many are best way to achieve the above goals of business-IT convergence struggling to keep up1. CEOs view increasingly demanding is through Business Architecture. While all organizations have customers not as a threat, but as an opportunity to a representative business design, elaboration of a differentiate. They are moving aggressively toward global corresponding business architecture may not exist. business designs with deeply changing capabilities and Implementing such an architecture will create competitive increased flexibility. advantages for the organization and enable it to realize operational improvements and efficiencies. The gap between their capability to manage change and the challenge ahead is growing. CEOs expect fundamental change, This paper, as the first one in a series of whitepapers on but they seem uncertain about their organization’s ability to Business Architecture, provides a new perspective on this manage it. Business pressures are compounding as IT important subject as a confluence of strategy, operating and IT constraints are growing. models. It also poses and answers the question of what makes Business Architecture actionable, and discusses three specific The growing economic uncertainty and its widening impact perspectives: strategy and transformation (S&T), business also creates a need for businesses, government organizations process management (BPM) and service oriented architecture and non-profits to seek ways to accomplish their business (SOA). objectives more effectively and faster than ever before2. This deepens the need for an unprecedented alignment, or rather The time to start adopting this holistic Business Architecture convergence of IT solutions to business priorities. paradigm is now. Several organizations have started on various Subsequently, this offers the possibility to exploit the enabling journeys around business innovation and operational power of IT solutions in defining business strategies. efficiencies, supported by the confluence of strategy and transformation, BPM and SOA. Defining and adopting As business and technology become more intertwined, Actionable Business Architecture in concert with these development and deployment of successful IT systems that strategic initiatives will help organizations realize competitive address the needs of the business today and in the future advantage and revenue growth. IBM Global Business Services 3

1. Business Architecture – a new perspective Are businesses adapting their models to take advantage of smarter technologies and dynamic infrastructure capabilities?3 Even though information technology has become inseparable from the business itself such that the proverbial business and IT gap is itself a misnomer and considered as a thing of the past by some experts – have business models and IT models effectively reflected this? Have organizations adopted business architecture to break down the complex nature of an enterprise4 in order to achieve significant cost savings and business differentiation?

Unfortunately, in many instances, the response to these questions is no. This is primarily because Actionable Business Figure 1: Positioning of Business Architecture within an Enterprise. Architecture is a fairly new concept. An Actionable Business Architecture can be executed by enterprises to help realize direct and incremental business value. Current Business Strategy model Architecture approaches are not at a level for businesses to The strategy model includes the vision, mission, goals, policies implement and realize quick benefits needed in today’s and commitments the enterprise develops, commonly classified competitive environment. under business intent or motivation. In addition, the business strategy represents the way different stakeholders intervene in Business Architecture needs to be viewed not as a drain on the overall direction of the organization, such as customers, projects, but rather a significant cost saver, a critical enabler for employees, suppliers and partnerships. Finally, the strategy business differentiation and revenue generation. This is truer model includes value propositions from the enterprise to the in today’s business climate than ever before. Organizations are society (services and products), including revenue model and seeking out realistic approaches that enable them to develop a pricing strategy. strong and Actionable Business Architecture. Operating model The Business Architecture model In order to develop an integrated perspective of the operating Business Architecture defines and manages the valued model of the enterprise, many different views are typically relationships and interactions among the strategy, operating created. and IT models of a business. Business Architecture is, as reflected in Figure 1, at the intersection of these three models. Capabilities and competencies describe the boundaries of primary business functions and thus, are intimately connected to the pieces of the organization that perform those functions, as well as resources and skills that generate competitive 4 Actionable Business Architecture

advantage in support of the business strategy. Enterprise-wide enabled through IT systems, while the specifics of business results are generally impacted by business processes5. This view functions and capabilities are implemented and delivered in Business Architecture defines the set of interaction/ through IT systems. With the increasing adoption of service coordination and learning and transformation processes that orientation at a business level, establishing service oriented IT transcend functional and organizational boundaries. The and operations is also becoming more and more processes also describe which people, resources, business rules prevalent. and controls are involved. Therefore, Business Architecture, at its core, has elements and Performance is another critical view of business operations and connections to ensure that the strategic intent of the business is normally connected to other elements of the enterprise using is effectively executed – at the operational level through its aligned Key Performance Indicators (KPI). Hence the business processes, and supported and enabled by the various performance of core business processes measured against KPIs IT systems. has a direct impact on the way the enterprise reaches its financial targets and tactical goals. There are several other definitions of Business Architecture in the open literature available from open-standards Businesses typically just view their operating model primarily organizations, academia and industry analysts. Most of these through the business process perspective. However, by also definitions exhibit some strong commonalities and are viewing the operating model through a business consistent with the definition presented earlier. As an example, componentization perspective, additional insights can be The Object Management Group (OMG) presents Business gained. Business components facilitate the analysis of Architecture as a blueprint of the enterprise that provides a operations, including the way capabilities participate in common understanding of the organization and is used to align building tangible outcomes that are used in support of the strategic objectives and tactical demands6. For OMG, Business revenue model, or value propositions in the case of Architecture articulates the structure of an enterprise in terms government or non-profit organizations. This modularization of its capabilities, governance, business processes and assists in the architecting of dependencies across the enterprise information7. and between the business and its different ecosystems. In order to enumerate the various dimensions that represent IT model the Business Architecture of an enterprise, it is important to The information technology model, as described earlier, is understand what is contained within each of the strategy, intimately connected to the rest of the Business Architecture operating and IT models. Figure 2 shows some of the typical dimensions. The pervasive leverage of IT within all aspects of dimensions that compose a Business Architecture. the business and its operations makes it a critical part of Business Architecture. Process segments are automated and IBM Global Business Services 5

• Business services model outlining the business functions and outcomes • Enterprise information model for the business with the appropriate level of elaboration.

Any robust Business Architecture must have a prescriptive method to capture these artifacts in a consistent manner and ensure that an appropriate level of traceability exists for value retention.

An actionable architecture is essential and highly desired by businesses, since they are faced with increasing market pressures. Yet the ability to respond to the changing market demands is decreasing. Business Architecture is a critical enabler in an organization’s agility and for establishing market Figure 2: Key dimensions of the Enterprise impacting Business differentiation. Architecture. 2. Business Architecture Contexts Representation of Business Architecture will, therefore, include What makes Business Architecture actionable? artifacts that represent key entities described in each of these three models. While it is not the exact intent here to capture In order to have the an Actionable Business Architecture, as all of the artifacts, the following are considered critical: created from the conceptual model outlined in the previous section, the Business Architecture should be realized through • Business goals, mission and objectives prescriptive approaches guided by robust techniques. It should • Business definition and function matrix also be represented through a detailed set of rich artifacts. • Interactions and interrelationships with partners, vendors and Each of the three models, namely, strategy, operating and IT, other external entities should be realized and managed through the following • Business assets and other resources available to support respective contexts: business operations • Business operations, IT, standards and guidelines; as • The strategy model is best realized though a strategy and appropriate transformation context that explores the details of the business • Business process models with appropriate levels of elaboration strategy and captures the specifics through models and • Key performance and key agility indicators relative to the codified artifacts. various processes, activities and tasks 6 Actionable Business Architecture

• Business process management (BPM)8 is a well known context Figure 4 shows how Actionable Business Architecture provides and approach that addresses the operating model domain. an opportunity to analyze selected and critical aspects of • The IT model can be realized through a variety of contexts. strategy, operating and IT models through their respective and Service orientation as a concept is most applicable across all representative realization approaches. three of the models and hence service oriented architecture (SOA) is chosen as the context to discuss the realization of the Representing Actionable Business Architecture at the IT model. The overlap of SOA with the two contexts above intersection of these approaches is only the first step. There are clearly illustrates the extension and impact of SOA beyond several other factors that come into play: just the IT model. • Need to have appropriate coverage across the respective The intersections of the contexts yield Actionable Business domains Architecture (Figure 3) since it is codified through a rich set of • Need to be prescriptive and supported by methods and artifacts and with the corresponding prescriptive approaches. techniques that lead to a high degree of repeatability • Need to be cohesively integrated with the other approaches to avoid, if not eliminate, duplication, etc.

The sections that follow discuss, in detail, each of these perspectives in order to clarify Business Architecture from a realization perspective.

Figure 3: Actionable Business Architecture is the intersections of the contexts. Figure 4: Perspectives and Realization of Strategy, Operating and IT Models. IBM Global Business Services 7

Traditional Business Architecture approaches are not wholly actionable. Business Architecture The most traditional use of Business Architecture comes from realized at the focused intersections of S&T, BPM and SOA . Different EA frameworks have had will be realistic and actionable. This strategy extends the scope the construction of BA as a prerequisite for quite some time. of Business Architecture as typically defined, enhances the Therefore it is very important to present the relationship details developed by activities that are considered within scope, between Business Architecture developed as part of an EA and prescribes specific approaches for adoption and execution. initiative and the ‘Actionable Business Architecture’ described thus far. Actionable Business Architecture can and should be developed as part of every EA initiative, and at the same time Actionable At a conceptual level, the Business Architecture described and Business Architecture can be executed independently of EA. developed within the scope of enterprise architecture is the Actionable Business Architecture is an instantiation of Business same as what is characterized here as being at the intersections Architecture realized through the application of specific and of strategy, operating and IT models. However, as presented prescriptive approaches, techniques and tools. This critical earlier, the Business Architectures created by existing perspective between Actionable Business Architecture and EA is explored further in section 2.4 (Figure 5).

Figure 5: Relationship between EA and Actionable Business Architecture. 8 Actionable Business Architecture

An understanding of Business Architecture at a conceptual S&T is not only about the identification of organizational wide level is necessary but not sufficient for execution; however, differentiating capabilities, but also about unraveling the gaining a deeper understanding is essential for success. This is underlying processes that create and replenish such capabilities achieved through the development of Actionable Business dynamically. In understanding these mechanisms, there are Architecture from the practical perspectives of strategy and several factors to consider, including business processes, transformation, business process management and service positioning of the firm, resource aspects, and possible strategic oriented architecture. Complementing this is a contextual directions or paths. In particular, the business processes point of view offered through the EA perspective. involved are of a wide variety and nature. Their structure is not necessarily the result of pre-established patterns of interaction 2.1. Strategy and Transformation or common contracts across business units, thus complicating a Business managers associate the term “strategy” with a series of clear relationship between the organizational-wide capabilities concepts such as vision, goals, mission, tactics, and so on. and underlying processes. In this way S&T is closely linked to, Basically, strategy is about determining what drives competitive and will feed into, the business process management layer advantage in an organization and what makes business discussed in the next section. performance sustainable9. Strategy is about addressing two questions: where to compete (which products, client segments, Strategy and transformation perspectives distribution channels, geographies), and how to compete There are different perspectives in the business, economics and (which and how to differentiate). The term industrial organization literature to strategy and “transformation” means the set of changes necessary to transformation. The main ones could be highlighted as: accomplish a significant business goal in an organization. strategic conflict, attenuating competitive forces, resource- based perspectives and dynamic capabilities. In principle, these In simple words, strategy and transformation (S&T) are the four perspectives present competitive visions, but they should two sides of the same organizational concern. Strategy is about also be regarded as complementary. In other words, there is the identification of those distinct strategic business capabilities not a unique framework to approach strategy concerns and necessary to provide sustainable performance, while generate transformative interventions, and this divergence has transformation is the realization of the complex combination generated significantly opposing views across different schools of actions that need to occur in consonance throughout the of thought. organization to reach specific strategic objectives. Business Architecture, both in its present status and in its most As is widely-known, S&T have been central business concerns promising evolutional sense, offers an opportunity to break in enterprises for several decades, and together, they are the new ground and get more consistency in the practice of S&T. essence by which companies detect, evolve, adapt and respond The state-of-the-art in strategy and transformation includes to new challenges. Thus, S&T is perhaps the most important plenty of substantial technical and business contributions; topic in this whitepaper for which the target audience includes however, these approaches do not reveal consistent paths for CEOs, LOB executives, highly-ranked officers in governments linking differentiated capabilities to sustainable performance and other organization business leaders. and to render actionable transformation. IBM Global Business Services 9

Business Architecture comes to play an essential role in this Business componentization context because it brings the formalization, models, methods As mentioned above, one of the significant advantages that and tools necessary for organizations to understand and define Business Architecture brings to strategy and transformation strategy, and analyze and select transformational paths, which propositions is business componentization, both in the sense of are crucial in the present environment. More specifically: models and methods. Decomposing a difficult problem into smaller business domains as an aid to the identification of • Clear guidance on distinct capabilities: Business Architecture strategic priorities and transformation initiatives appears to be brings the opportunity to link more tightly strategy-driven an appealing approach to manage complexity of S&T. priorities to those actions needed to transform operations. In Therefore, the subject of componentization has boosted fact, Business Architecture methods offer the possibility to additional interest in the business and technical community identify distinct capabilities, evaluate their potential shortages recently. for attaining critical objectives, express business goals in terms of key performance and agility indicators, and link to-be states CEOs have expressed that one of their key issues is to make for selected capabilities to business processes that instrument their business models more flexible and to cope more necessary operational changes. effectively with the continuous changing environment. A “plug • Addressing componentization: Rigorous foundations from and play” paradigm, componentization is the perfect entry Business Architecture provide additional insights on strategy point to make business more flexible. and actionable paths for transformation. Among several different concepts used in Business Architecture, Optimizing strategy and transformation componentization of industries and business operations has Defining strategy and analyzing, plus selecting become a major modeling and methodology contribution transformational paths is a challenging exercise. S&T applied to S&T. This facilitates a transparent discussion on interventions in many cases are executed in a suboptimal differentiating capabilities, which again forms input for manner, not being able to handle the complexity of choices to strategy formulation. The explanation of the IBM be made in this process effectively. This can lead to significant componentization approach will be shown later in Section 3. shortfalls and lost business opportunities. Business Architecture • Supporting S&T implementation with specific software tools: can optimize the S&T process to gain significant value. The Business Architecture brings the value of making strategy following list summarizes these points: management and transformation outcomes more traceable through specialized Business Architecture software tools. • Feeding the definition of business intent, value proposition These tools provide essential support to the customization of and enterprise model: Business Architecture offers the reference business models and industry-specific best practices, possibility to identify distinct capabilities. On the one side this the documentation of company goals and performance targets, is crucial to linking strategy definition to effective core competences, business components, capabilities, business transformation. On the other side these distinct capabilities processes, main assets and commoditized resources. These BA can form input for the strategy definition process itself. In this tools are crucial in implementing S&T programs effectively. so-called ‘inside-out’ approach, the distinct capabilities of an 10 Actionable Business Architecture

organization form the true source of competitive advantage. Architecture tools can make the S&T process far more Building the strategy around distinct capabilities then forms efficient by introducing similar interpretations, actionable the core of strong sustainability, by feeding these into the formats and consistent semantics. definition of the business intent, value proposition and enterprise model. In summary, strategy and transformation interventions require • Structuring the S&T process to address complexity: understanding the ways an organization creates sustainable Complexity of large organizations, industry structure and competitive advantage through revenue generation and additional challenges brought by commoditized operations through production of tangible and intangible business pose enormous intellectual challenges to a management or outcomes in the form of services or physical products. consulting team. The depth and breadth of the knowledge Furthermore, they require (1) a deep understanding of business necessary to disentangle the complexity of a typical S&T operations and how firm-specific assets come to play as activity are paramount. Not using any well-structured, formal resources, which form the basis for identifying and leveraging architecture approach containing well-documented methods, the organization’s distinct capabilities, (2) a structured way of models and related best-practices in digital form can yield working in order to deal with all the complexity involved, and suboptimal outcomes, time delays, ambiguity and reinvention (3) an effective linkage between the business and IT elements. of related content. These S&T challenges are addressed better by using a holistic • Leveraging the Business – IT linkage: On the other hand, Business Architecture approach. given the significance of technology as a critical factor in organizations, lacking a Business Architecture concept to S&T 2.2. Business Process Management increases risk, resulting in misaligned or untraceable business Today, organizational leaders continue to face ever mounting expectations and strategic imperatives. A holistic approach to pressures to innovate strategy, operating and IT models. Yet S&T through the use of Business Architecture involves clear finding ways to enable continuous innovation individually methodological and model-centric touch points between within each model tends to remain a challenge that potentially strategic priorities, information technology and related IT involves significant efforts to identify new areas of achievable architecture. This will facilitate integrating the enabling change. But when looking at the problem from a broader power of IT solutions in the strategy formulation process by perspective, innovation will emerge where market insight and leveraging the IT Architecture. technological know-how intersect; effectively where a business • More efficient and repeatable S&T process: Lacking Business matches what the market needs with the technology that can Architecture software tools to support the S&T intervention make the innovation possible. brings the outcomes of rich and intensive activities to be documented in the form of word processors, spreadsheets or When BPM is viewed from beyond an operating model focus, presentations slides, leading to a very inefficient process of using the lens of Actionable Business Architecture, it expands which outcomes can not easily be re-used. Business the viewpoint of operational excellence past process automation and improvement. In parallel, it concentrates the discussions around process innovation and optimization by IBM Global Business Services 11

approaching the problem from a structured position that Business process challenges expects cost effective innovation opportunities as expressed in Specifically, executing BPM initiatives by leveraging the the strategy and IT Models. insights stored in an Actionable Business Architecture help provide the ability to link an organization’s key performance BPM is a discipline that combines software and expertise to indicators (KPIs) and key agility indicators (KAIs) to the help organizations drive innovation and manage change, to corresponding strategic business objectives and IT capabilities. enhance their competitiveness, and to create true At a more focused level, this type of usage also ensures that the differentiation through incremental and continuous business end-to-end business processes are aligned with core business process improvement. BPM allows organizations to govern components, strategic business objectives, process metrics and cross-functional business processes throughout their lifecycle, process-based performance goals. As an example, Table 1 rendering them both visible and actionable. Through BPM, exposes some of the prevalent BPM challenges that could be businesses are able to effectively manage change, sense more readily addressed using content in an Actionable Business opportunities, and accelerate business process improvements in Architecture. an incremental, continuous and closed-loop cycle, thereby achieving better financial results by way of value creation. Operational Examples: Challenges addressed using an Dimension Actionable Business Architecture Moreover, BPM helps organizations create agile, dynamic, and Process Business process improvement efforts are optimized operating and business process models today that Traceability traceable to strategic business goals will serve as the foundation for greater innovation in the Business Business processes align to an enterprise- future. This foundation provides a key value of BPM, centering Componentization wide logical model of modular business around business and IT collaboration. BPM provides a functions common framework around business processes, allowing the Process Agility Tooling is used to document, design and two parts of an organization to work closely together and to simulate business processes to expedite roll-out of change and business functions and keep this alignment flexible and continuous so that capabilities organizations can better adapt to changing needs. Summarily, Process Business process execution has key BPM synchronizes the otherwise divergent agendas of business Measurability performance indicators defined, shared and and IT by enabling and automating the collaboration between monitored business and information technology (IT) to help drive them Process Alignment Business processes are implemented as & Ownership composable services with shared capabilities towards a common goal of improving the business using well to improve business agility defined process governance structures. Organization Organization structure is aligned to business Structure processes with minimal duplication in job roles Actionable Business Architecture will help identify and bring across organizational units together functional capabilities and competencies needed by Resource Key business process assets that are common the selected business processes. In effect, the Business Management across business boundaries are identified and shared Architecture reveals the way that business process models relate to business component capabilities, firm-specific Table 1: Examples of Operational Dimensions and BPM Challenges. resources and assets, skills and organizational responsibilities; plus illuminate how these come to be realized and influenced by critical business performance goals. 12 Actionable Business Architecture

BPM and SOA Embarking on a BPM initiative in the context of Business With an enterprise-level view of BPM, organizations can Architecture guides organizations in focusing on the rethink or transform core business processes to leverage appropriate core values driving business processes. Assessing business strategy and SOA as a means to build agility and these processes from end-to-end, they typically span multiple flexibility into their business. Moreover, this approach provides business components across organizations, each with its own organizations with business process models that are aligned rules and management structures, and across disparate IT with strategic business objectives and underlying IT functions, systems that may not be designed to communicate and and the ability to design, build and run those solutions in a integrate. fashion that delivers bottom-line business value.

BPM Benefits from Business Architecture When employing the broader context and interactions of a • Better identify, prioritize and align business process Business Architecture, BPM becomes an even more powerful improvement initiatives and better link them to strategic enabler of business process optimization when combined with business objectives. service oriented architecture (SOA). BPM uses the services • Rationalize and avoid duplication or disconnection across defined by an SOA to implement dynamic business processes, related activities that might be taking place in different, and orchestrating and choreographing the services to define and frequently disconnected, process transformation projects implement the business processes. When used together, BPM across the enterprise. enabled by Smart SOA technologies, provides the improved • Better position and differentiate their businesses, make levels of flexibility and process optimization that accelerate smarter decisions, reduce overall business costs, and make innovation and enable organizations to embrace change rather their business models more responsive to changes in the than resist it. global marketplace. A key success factor of implementing BPM initiatives is to do so in the context of a broader Business In summary, when BPM is approached through the broader Architecture since this approach allows organizations to context of Business Architecture, it accelerates the delivery of achieve alignment between their business process initiatives realistic, innovative business process models with sustainable and their business objectives and strategic goals. differentiation through the integration of business and IT. It • Lower risk, cost and time to market for delivering business provides a clear and continuous path from strategy to process improvement projects. This is achieved by having a development to implementation. Ultimately, approaching comprehensive understanding of where the opportunities for BPM in the context of Business Architecture allows for a improvement reside in their BA, as well as which process reliable alignment of BPM initiatives with overall business improvements can have the most significant impact and return strategy and business optimization objectives. on investment. IBM Global Business Services 13

2.3. Service Oriented Architecture Holistic service orientation Business pressures are mounting as IT constraints are rising. SOA facilitates the building, deployment and integration of The most fundamental question is how do we build business these services independently of applications and the computing applications to support business change and agility? How do platforms on which they run. Achieving the benefits of SOA we take legacy systems that constrain business today and make requires active participation from the business along with IT to them assets for the business? Flexible business models have create business applications that are flexible and built for increasingly become a requirement for companies. The focus change. Service orientation is a powerful and flexible shifts to building much tighter linkages among strategic programming model – one that enables a new way of thinking objectives, core business processes and the applications that about and building software that creates new opportunities to support them – greater business flexibility requires more deliver value, increase competitive advantage, and extend the adaptability from operating models and IT enablement. The enterprise. demand for innovation and elasticity is higher than ever as companies seek to accelerate time-to-market for new products, Companies aiming at maximizing competitive advantage create new revenue sources and reduce costs. should adopt a new architecture that both:

IT structures frequently hamper business agility and flexibility • Powers a new approach to strategic and operational thinking so it is imperative to understand how to break down IT • Removes internal IT roadblocks barriers to flexibility and innovation. Three main dimensions of this problem can be characterized as follows: These goals can be achieved through a holistic service oriented approach. The first dimension of this approach is the adoption

• Heterogeneity of IT resources including software applications of a strategic architecture that takes full advantage of the new • Complexity of existing custom applications and their IT flexibility. This is accomplished by an Actionable Business interconnections, a factor that grows exponentially as new Architecture. The second, and intimately related dimension, is applications and connections are needed and added the implementation of a service oriented architecture which • Rigidity of hard-wired applications, which are tightly designed fully capitalizes on the confluence of strategy, operational and and constructed to address a specific business context. IT models. With a holistically designed and properly implemented SOA, a business can structure its IT resources to Service orientation is the answer to resolve the above support flexibility instead of inhibiting it. problems. It is a way of integrating your business as linked services and, more importantly, the outcomes that they bring. Maximizing service orientation It is a discipline that takes everyday business applications and By following this holistic approach, service orientation will be breaks them down into individual business functions and best achieved due to the value provided by Actionable Business processes, called services. In essence, when we talk about Architecture and thus, optimized designs and deployments of service orientation, we are certainly not talking about SOA-based business solutions will be obtained. For example, technology; we’re talking about a thought process and a Actionable Business Architecture provides the strategy model business philosophy. So, what is service oriented architecture that is linked to the operations model, which helps to identify (SOA)? It is quite simply the IT architectural style and and prioritize business functions and services to be provisioned. discipline that supports the service orientation thought process Services closely aligned to core business capabilities allow an and makes it a reality. 14 Actionable Business Architecture

enterprise to be more responsive to change, better serve their Given the enormous cost and competitive benefits that can be customers, improve collaborations with partners, and unleash realized by harnessing the power of service orientation, the the power of innovation or services which differentiate the excitement and expectation surrounding SOA is not surprising. business driving new market share. But for most companies seeking to defend and expand competitive advantage in the new business era, transitioning to Through the adoption of service orientation in the context of a service oriented architecture requires a fundamental shift10 Actionable Business Architecture, the core SOA services – not only in the way the company develops and manages IT become assets for the business and not just for the IT function. resources and infrastructure, but also in the way it thinks about In fact, this also uncovers an opportunity to improve business change, uncertainty, strategy and risk. Hence an Actionable and IT alignment and provides a strategic architectural Business Architecture will be a critical success factor for approach for improving business and IT collaboration. business agility.

Business stakeholders treat these services as assets which can be 2.4. Enterprise Architecture modularly used for supporting flexible enterprise models While it is true that in most industries EA11 has found requiring external collaboration and integration as well as acceptance as a vehicle to align business and IT12, the intense internal transformation. The consequence of making perception of many business leaders is that EA serves and this service portfolio a part of the Business Architecture is an resides only within the IT unit of the organization. This trend enhanced visibility of the portfolio as the main enablers of IT varies with the geography of the organization, the dynamics of flexibility for stakeholders to realize faster time-to-market of the industry or industry segment, and the degree of maturity of innovative business models. These services are realized in the the client operations. That perception has evolved over time as confluence of the operating and IT models making Business stakeholders began to realize that within the context of Architecture actionable through the adoption of SOA. business and IT alignment, an EA must explicitly include the business aspects of the enterprise as well as the underlying IT Several forces are driving businesses to become ever more support. agile, adaptable, responsive, resilient and profitable. There are technology and organizational roadblocks that impede this Incorporating BA as one of the domains that comprise EA is in forward motion and mire businesses in place. Adopting a direct support of a definition of EA as a discipline that defines holistic approach to SOA in the context of Actionable Business and maintains the architecture models, governance and Architecture can break down these barriers and enable a transition initiatives needed to effectively coordinate semi- competitively critical shift in strategic thinking. autonomous groups towards common business and/or IT goals. This definition highlights the strong relationship between EA and its outcome in supporting business goals and objectives; hence the need for better articulation of the business objectives, goals, and processes that can be best captured and articulated by BA as defined earlier. IBM Global Business Services 15

Others have also defined EA in similar terms all emphasizing However, considering BA as an integral part of EA doesn’t the value in achieving alignment of business and IT. For mean that BA must be used exclusively in the context of EA, or example, Gartner defined EA in several white papers as the for that matter, produced entirely within the EA discipline. As process that translates business vision and strategy into an example, BA can be used outside the scope of EA, if an effective enterprise change by creating, communicating and enterprise is embarked on a business process reengineering and improving the principles and models that describe the optimization as part of strategy and transformation initiative; enterprise’s future state and enable its evolution13. implementation and execution of business processes as part of BPM initiative; or as input to SOA adoption program. Though nearly all these definitions mentioned the business Nevertheless, it is important to keep in mind that EA will not aspect of EA, historically the lack of strong and formal be realized unless its activities include BA. representation of the business aspects in EA engagements rendered the goal of achieving better alignment between In conclusion, for any EA program to be effective, business and IT ineffective. Recognizing this deficiency and to development of BA artifacts should be included as an integral ensure proper inclusion and representation of the business, part of the program activities. In that sense, and with the most EA frameworks and methods currently in use consider understanding that BA can be used outside the scope of EA, we Business Architecture as an essential domain of Enterprise regard EA as an umbrella under which both Business Architecture14. Architecture as well as IT Architecture are integrated with continuous feedback between them to achieve the illusive The development of Business Architecture is a principal business and IT Alignment that has been sought for the past activity that needs to be undertaken by EA unless BA artifacts several decades. from the set defined in Section 1 have already been developed as part of other organizational initiatives, such as enterprise Conclusion planning, strategic business planning or business process Business Architecture has been used in different ways in re-engineering. In this case, these artifacts become part of the organizations for several years15. However, with the advent of resulting EA structure and become an essential input to the volumes of technological changes and innovations over the last development of the rest of the EA domains: information 20 years, Business Architecture has become challenged to systems architecture, technology architecture, and gap analysis consume and take advantage of these innovations in a fashion and transition planning. For example, target enterprise that positively affects the organization’s business model. The capabilities and the resources needed to support these Actionable Business Architecture paradigm is designed to take capabilities—business services, business users’ roles, business advantage of key aspects of a controlled set of these now processes, and locations where business is being conducted— mature innovations. It helps drive improvements to an are all artifacts of BA that are needed as input for identifying organization’s ability to execute its business model in a more the other aspects of EA. This includes both the functional and agile and efficient manner, which is even more important operational views of information systems and technology because of the increasingly inseparable linkage between architecture. business and IT. 16 Actionable Business Architecture

CEO expectations and goals around driving business objectives The time to start adopting this type of holistic but Actionable using business-IT convergence will, in turn, increase the Business Architecture paradigm is now. Many organizations critical need to manage the valued relationships and have started on their journeys around business model interactions among the intersecting elements of the strategy, innovation, SOA and BPM. Defining and adopting a Business operating and IT models. Streamlining Business Architecture Architecture in concert with these strategic initiatives will to prescriptively define, trace and manage more complex and expedite innovation efforts. Important to this approach is linked interactions, relationships and intersections between confirming that organizations have the needed methods, these core models is rapidly becoming an imperative for models, tools and metrics in place to drive proper alignment assuring ongoing competitiveness. This imperative is driven by between the initiatives and the Actionable Business the need to have a means to identify and address market Architecture managed value relationships. Actionable Business pressures, such as recent economic trends and downturns, in a Architecture, alongside an organization’s innovation strategy, more agile, efficient, business relevant and value enhancing allows for a more time and cost effective way to work. As the fashion. Having a Business Architecture that is aware of the Business Architecture grows and is adopted, it will provide the broader organizational key interdependencies provides the impetus to perform smarter work across the extended instrument to drive better business value across the whole enterprise. enterprise, instead of addressing model interactions and relationships in organizational silos.

The Actionable Business Architecture defined in this paper takes advantage of the key innovations in recent years around SOA, BPM and S&T approaches. These advances serve as the prime focal points for the business model to actively and pragmatically deliver a Business Architecture that is consistently actionable across the organization. This new Business Architecture perspective allows for realistically defining the key and complex relationships and value interactions that must react and respond in concert to changes in the internal and external business landscapes. It provides a framework to identify and manage where and how value is created amongst the models. IBM Global Business Services 17

References 10. See Powerful Enterprise Architecture Strategies and 1. Global CEO Study, “The Enterprise of the Future”, IBM Information Technology Strategies, http://kerrieholley. Corporation, 2008. sys-con.com/node/45100 2. Suzanne Duncan et al., “The Ying-Yang of Financial 11. John Zachman, “A Framework for Information Systems Disruption”, IBM Corporation, 2009. Architecture”, IBM Systems Journal, Vol. 26, No.3, 1987. 3. Faisal Hoque, “The Alignment Effect: How to get real 12. “FEA Consolidated Reference Model Document”, Executive business value out of technology”, Financial Times – Prentice Office of the President of the United States, October Hall, 2002. 2007. 4. Doug McDavid, “Business Architecture”, IBM Systems 13. Betsy Burton et al., “Enterprise Architecture Research Index: Journal, 1999. Enterprise Business Architecture”, Gartner, February 2009 and Betsy Burton et al., “Six Best Practices for Enterprise 5. APQC, Process Classification Framework (PCF) and Business Architecture”, Gartner, January 2009. Industry PCF, http://www.apqc.org, 2008. 14. TOGAF 9.0 Documentation, The Open Group [TOG], 6. Object Management Group [OMG], Business 2009. Architecture Work Group. “Business Architecture: Scenarios & Use Cases”, April 2008. http://bawg.omg.org/ 15. Jeff Scott, “Business Architecture’s time has come”, Forrester Report in Business Architecture Series, October 2008 7. The business capability is “what” the organization does, and Jeff Scott, “Choose From Five Basic Approaches To the business processes, are “how” the organization Business Architecture Based On Your Context And Goals”, executes its capabilities. Enterprise Architecture Professionals, Forrester, January 8. Roger Burlton, “Business Process Management”, SAMS 2009. Publishing, USA, 2001. 9. Michael E. Porter, “What is Strategy”, Harvard Business Review, November 1996. 18 Actionable Business Architecture

About the Authors Dr. Jorge Sanz is a manager in IBM Research, Almaden and is Ray Harishankar is the CTO of Global Solutions within IBM an IEEE Fellow. He has been professor and president in Global Business Services, is an IBM Fellow and is a member of engineering and business schools in the United States and the IBM Academy of Technology. His expertise focuses on internationally, held COO and cofounder positions in different solution architecture, SOA, business architecture and cloud start-ups, and led strategic alliances in Latin America, Europe computing. He is responsible for transforming innovative and and China. He focuses on strategy management, business leading edge technologies and approaches into business process transformation and related software assets for services differentiation for IBM and its clients. Ray can be reached at industries. Jorge can be reached at [email protected] [email protected] Edward Giesen leads the Business Strategy Practice across Kerrie Holley is the CTO for IBM’s Business Performance and Europe, Middle East and Africa, leads the global IBM SOA Centers of Excellence within IBM Global Business Component Business Modeling practice and is a Partner in Services, is an IBM Fellow and is a member of the IBM IBM Global Business Services. He has over fifteen years of Academy of Technology. His expertise focuses on software experience in advising senior clients and has published engineering, business architecture, IT architecture, IT extensively on the topic of business models. Edward can be Strategy, SOA and cutting-edge network centric distributed reached at [email protected] solutions. He is responsible for helping customers leverage SOA, BPM and collaboration for increased flexibility and S. Kevin Daley is a Senior Executive Solution Architect in IBM agility. Kerrie can be reached at [email protected] Global Business Services and is a member of Who’s Who Worldwide. He is a former c-level business executive with over Rob High is the Chief Architect for the SOA Foundation in thirty years of experience in business optimization, IBM Software Group, is an IBM Fellow, and is a member of performance engineering, information design, software the IBM Academy of Technology. His expertise focuses on platform implementation and innovative continuous process ensuring IBM’s software and services portfolio is improvement. Kevin can be reached at [email protected] architecturally grounded to enable for efficient SOA-based solutions. He is responsible for ensuring an open industry Dr. Mamdouh Ibrahim is the CTO of the IBM Enterprise architectural definition of the principles of business and IT Architecture and Technology Practice in IBM Global Business alignment enabled by SOA. Rob can be reached at highr@us. Services and is an IBM Distinguished Engineer. He has over ibm.com thirty five years of experience in both industry and academia specializing in innovative uses of technology to solve clients’ business problems. Mamdouh can be reached at mibrahim@ us.ibm.com IBM Global Business Services 19

Samuel Antoun is a Senior Executive Solution Architect in IBM Global Services. He has over seventeen years of experience in enterprise solution architecture including a focus on realizing BPM and SOA implementation, consulting services to c-level executives and converging business and IT needs to alleviate business challenges. Sam can be reached at [email protected].

Allison Botros leads the Component Business Modeling global program office and is a Principal Managing Consultant from the Strategy & Change Practice in IBM Global Business Services. She has over fifteen years of experience in strategic change concentrating on corporate strategy and focuses on business architecture, business model innovation and cloud computing strategies. Allison can be reached at allison.botros@ us.ibm.com

Sham Vaidya leads the Emerging Technology & Architecture (ET&A) area for IBM Global Business Services, is an IBM Distinguished Engineer and is a member of the IBM Academy of Technology. He has over twenty years of experience driving emerging technologies and architectures into client solutions and executing enterprise wide strategies for both clients and IBM. Sham can be reached at [email protected] © Copyright IBM Corporation 2009

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