Business Architecture Models

Developing a business architecture will require developing several enterprise architecture models. Each enterprise architecture model describes a fundamental structure or group of structures. Different models explain the enterprise in a different way. To effectively manage your business architecture, you will need to implement an enterprise architecture tool.

Taken together, the models describe the business architecture. In the complete enterprise architecture, these models will link to other models that describe the other enterprise architecture domains.

Business Model

The Business Model describes how value is captured. We will often use Strategyzer's Business Model Canvas to develop and document a business model.

The Business Model Canvas works well for one product or service. As a modelling technique, it struggles with complex business models. In fact, one of the strengths of the Business model canvas is identifying where the business model is becoming muddy.

The physical process of creating a business model artifact allows the architect to include the enterprise's strategic viewpoints into strategy development and business planning operations. The architect and the models he or she creates to bridge the gap between strategy and architecture in this scenario. This helps to enhance Enterprise Architecture's alignment with strategy, improve the overall quality of the architecture, and boost the architect's expertise and value to the business.

The TOGAF ADM's Phase B: Business Architecture can include business models as a critical input. The business model is very good at getting members of the leadership team to agree on new strategies or a new company direction. At an operational and organizational level, the Business Architecture is more successful at aligning the rest of the company on what has to be done (and how).

Operating Model

Many people confuse how they use an operating model with what an operating model is. An operating model describes how a business structures its core activities. The operating model shows the unique capabilities aligned with the enterprise's strategy, skilled leadership teams, or unique investment profiles.

The Operating model is an anchor for the enterprise. It is critical for the strategy's effectiveness and longevity.

We will often use a Kaplan Strategy Map to identify the changes or focus required in an operating model.

Value Chain

A value chain diagram is a high-level representation of an organization's activities to generate value. A classic Porter Value Chain diagram separates supporting activity from primary activity. Primary activity is sequences to show the hand-off of activity in a value chain. In a Porter diagram, we always put the supporting activity on the top - all supporting activity is a burden on the primary activity. The primary activity must produce enough customer value to pay for the supporting activities.

A value chain diagram is a high-level representation of an organization's interactions with the outside world. The value chain diagram, in contrast to the more formal functional decomposition diagram generated in Phase B, concentrates on presentational impact. The goal of this diagram is to swiftly onboard and align stakeholders for a specific change endeavor so that all participants are aware of the architectural engagement's high-level functional and organizational context. A common technique is to provide a simplified business process diagram and define the value components and adjustments required for each activity.

We can further break a Value Chain down into pillars or value streams.

Capability Model

Capability models are used to focus attention. A good process model is comprehensive. A good functional model is both comprehensive and organizationally aware. A good capability model is a subset of the activities and organization. We should focus the subset on the activities that must be improved or sustained to reach the desired outcome.

Capability-based planning focuses on the enterprise's strategic business capabilities' planning, engineering, and delivery. It is business-driven and -led, and it brings together all the activities from all areas of the business to attain the required capacity. Most, if not all, corporate business models are accommodated by capacity-based planning, which is especially beneficial in companies where a latent capability to adapt is required and we use the same resources for various capabilities. Business scenarios are frequently used to find and refine the demand for these competencies.

Capability-based planning is very important from an enterprise architecture standpoint. A capability stands in for everything required to perform some activity - people, process, technology. As a stand-in it provides a great tool for focusing improvement attention.

When we use a Business Model Canvas the capabilities in Key Resources and Activities and the customer channel leap off the page. When we use a Kaplan Strategy Map, everything placed on the map is a capability.

We use scores to explain improvements and changes in capability planning. See the Business Architecture Capability Assessment Guide.

Information Model

Under TOGAF, the business information model reflects the semantics of an organization's data, not a database design. It outlines the items that are important to an organization and about which it is likely to gather data (as entities), as well as linkages between pairs of those important things (as relationships). Because it avoids many of the system-level components, it is an easier model to interpret than a Logical Data Model. It encompasses all company information, not only digital information.

In most cases, each firm has only one Business Information Model, which describes all relevant data throughout the whole organization. We may use one or more diagrams to graphically represent all or part of the information model.

Business Architect's Definition of Value

Value-adding activity is:

• a customer will pay for it,
• it transforms (changes form, fit or function) a product or service,
• it is done the first time correctly.

All discussion of value-adding requires consideration of waste. We should consider every activity to be waste unless it:

• meets an explicit customer requirement
  cannot be shown to be performed more economically